2019 (1) TMI 790 - AT - Income Tax

Levy of penalty u/s 272A(2)(e) - delay of 509 days in filing the return of income for the assessment year under consideration - period of limitation for issuing notice - Held that - Ignorance of law is not an excuse. A mistake committed by the assessee cannot be a reasonable cause for committing another mistake. The penalty proceedings under section 272A(2)(e) of the Act is a separate proceeding from assessment of income and the determination of income has no bearing with the quantum of penalty as long as the assessee is required to file its return of income under section 139(4A). Once the assessee is liable to file the return of income under the provisions of the Act and it fails to do so, then the provisions of section 272A(2)(e) of the Act automatically arises. The penalty levied under section 272A(2)(e) of the Act was rightly confirmed by the ld. CIT(A). Thus, the ground raised by the assessee stands dismissed. Penalty proceedings initiated by service of notice under section 272A(2)(e) r.w.s. 274 of the Act on 08.12.2015 and the penalty was levied vide order dated 02.03.2016, which is well within six month period provided and thus, clause (c) to section 275(1) of the Act also not applicable. Similarly, sub-sections 1(a) and 2 to section 275 of the Act also not applicable. Thus, the issue raised in the written submission by the assessee that the penalty proceeding is barred by limitation has no merits. In the appellate order, the ld. CIT(A) has considered all the grounds raised by the assessee and dismissed the appeal filed by the assessee since there was no merit in the grounds raised by the assessee. Thus, we find no reason to interfere with the order passed by the ld. CIT(A). - Decided against assessee.

Summary

Issues:
1. Penalty under section 272A(2)(e) of the Income Tax Act, 1961 for delayed filing of income tax return.
2. Validity of penalty proceedings initiated beyond the time limit specified under section 275 of the Act.

Analysis:
1. The appeal was against the penalty levied under section 272A(2)(e) of the Income Tax Act for delayed filing of income tax return. The assessee had filed the return for the assessment year 2010-11 after a delay of 509 days. The penalty was imposed by the Assessing Officer and confirmed by the ld. CIT(A). The appellant argued that the delay was due to the belated filing of returns for the earlier two assessment years. However, the ld. CIT(A) held that each assessment year is treated as a separate entity under the Income Tax Act. The appellant's argument that the delay in the previous year caused the delay in the subsequent year was not considered a valid reason for interference with the penalty order. The Tribunal upheld the penalty, stating that ignorance of the law is not an excuse, and a mistake in one year cannot justify a mistake in another. The penalty under section 272A(2)(e) was deemed rightly confirmed by the ld. CIT(A), and the appeal was dismissed.

2. The assessee contended that the penalty proceedings were initiated beyond the time limit specified under section 275 of the Act. However, the Tribunal found that the provisions of section 275(1) did not apply to the case at hand. The clauses related to appealable assessments and orders under section 263 were deemed inapplicable. The time limit specified under section 275(1)(c) was not breached in this case, as the penalty proceedings were initiated and concluded within the stipulated period. The Tribunal concluded that the penalty proceedings were not barred by limitation as claimed by the assessee. The ld. CIT(A) had already dismissed the appeal considering all grounds raised by the assessee, finding no merit in them. Consequently, the Tribunal upheld the order passed by the ld. CIT(A) and dismissed the appeal filed by the assessee.