2011 (7) TMI 1355 - AT - Income Tax

Summary

Issues involved: Appeal against penalty imposed u/s 271(1)(c) and u/s 41(1) of the Income Tax Act, 1961. Additional ground filed regarding limitation of penalty order.

Penalty u/s 271(1)(c): The appellant challenged the penalty imposed u/s 271(1)(c) for alleged concealment of income. An additional ground was raised regarding the limitation of the penalty order. The appellant contended that the penalty order was passed beyond the limitation period specified in section 275(1)(a) proviso of the Act. The penalty order was passed on 28.7.09, which was beyond the deadline of 31.3.2005 as per the proviso. The Tribunal admitted the additional ground and held that the penalty order was indeed barred by limitation as per the proviso.

Penalty u/s 41(1): The appellant also challenged the penalty imposed u/s 41(1) for alleged cessation of statutory liability. However, the Tribunal did not delve into the merits of this issue as the penalty order was already cancelled due to being barred by limitation. The Tribunal did not find it necessary to address the original grounds raised by the appellant on this issue.

Additional Ground on Limitation: The appellant raised an additional ground regarding the limitation of the penalty order. The Tribunal allowed this ground as it was crucial to the appeal. The appellant argued that the penalty order was passed beyond the deadline specified in section 275(1)(a) proviso of the Act. The Tribunal agreed with the appellant's contention and held that the penalty order was indeed beyond the limitation period, leading to its cancellation.

Conclusion: The Tribunal allowed the appeal filed by the appellant as the penalty order was cancelled due to being barred by limitation. The Tribunal did not address the original grounds raised by the appellant on the merits of the penalties imposed. The penalty order was deemed void ab initio due to being passed beyond the limitation period specified in the Act.