2016 (5) TMI 1137 - AT - Income Tax

Penalty under Sections 271D and 271E - period of limitation - Held that - The impugned orders levying the penalties under Sections 271D and 271E of the Act are barred by limitation because the penalty order should have been passed not later than 30.06.2012, however, in the present case, the penalty orders were passed by the ld. Addl. Commissioner of Income Tax, Central Range-2, New Delhi on 15.06.2013 - Decided in favour of assessee

Summary

Issues involved:
- Deletion of penalties under Sections 271D and 271E of the Income Tax Act, 1961
- Interpretation of limitation under Rule 27 of Income Tax (AT) Rules, 1963

Detailed Analysis:
1. Deletion of Penalties:
The appeals were against orders deleting penalties of ?1,71,94,800/- each imposed under Sections 271D and 271E of the Income Tax Act, 1961. The CIT(A) had dismissed the appellant's claim regarding limitation under Section 275(1)(c) of the Act. However, during the hearing, the appellant raised the issue of limitation under Rule 27 of Income Tax (AT) Rules, 1963. The Tribunal held that the appellant was entitled to raise this ground. The CIT(A) had previously held that the penalties were not barred by limitation, but the appellant contested this decision.

2. Interpretation of Limitation:
The Tribunal examined the relevant dates in the case and cited Section 275(1)(c) which sets the limitation for passing penalty orders. The appellant argued that the penalty order was barred by limitation as per the provisions of Section 275(1)(c). The Tribunal referred to a similar case adjudicated by the ITAT Delhi bench 'F' and the Delhi High Court's judgment in another case. The High Court's judgment emphasized the importance of adhering to the limitation period for passing penalty orders. The Tribunal, following the precedent, held that the penalty orders in the present case were indeed barred by limitation as they were passed after the prescribed deadline of 30.06.2012. Consequently, the appeals of the department were dismissed based on the limitation issue.

In conclusion, the Tribunal's judgment focused on the deletion of penalties under Sections 271D and 271E of the Income Tax Act, 1961, and the interpretation of the limitation under Rule 27 of Income Tax (AT) Rules, 1963. The decision highlighted the importance of adhering to the statutory limitation period for passing penalty orders, as outlined in Section 275(1)(c). The Tribunal's ruling was influenced by previous judgments and legal interpretations, ultimately leading to the dismissal of the department's appeals due to the penalties being deemed barred by limitation.