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2019 (8) TMI 1068 - HC - Income TaxPenalty u/s 271(1) (c) - bar of limitation for imposing penalties - service to CIT (Judicial) - HELD THAT - If an officer of the Department is allowed to choose a date on which a copy of the order which has to be given effect to or acted upon is sent to the officer concerned, it will defeat the very purpose for which the legislature has stipulated definite time limits in various provisions of the Act for the authorities to perform their statutory tasks in a time bound manner. In other words, the mandatory period of limitation u/s 275 (1) (a) cannot be sought to be defeated by delaying the dispatch of the relevant order of the ITAT to the concerned jurisdictional CIT. What is relevant is when the CIT (Judicial) representing the Department before the ITAT received the order, which in any event is generally made available in the public domain soon after the order is pronounced. This is purport of the decision of the Full Bench of this Court in CIT v. Odeon Builders Private Limited (FB) 2017 (3) TMI 1266 - DELHI HIGH COURT , the ratio decidendi of which will apply to the case on hand as well since the language of Section 260 A (1) and Section 275 (1) (a) is identical. The impugned orders of penalty dated 26th April 2018 were issued far beyond the six-month period of limitation in terms of Section 275 (1) (a) of the Act and were, therefore, invalid. On the date that the said orders were issued, i.e. 26th April, 2018 they were without jurisdiction. Maintainability of writ petitions - HELD THAT - This Court negatives the objection of the Respondents to the maintainability of the present writ petitions. In CIT v. Chhabil Das Agrawal 2013 (8) TMI 458 - SUPREME COURT , the Supreme Court took note of the fact that normally the existence of an alternative remedy should discourage writ petitions under Article 226 of the Constitution being entertained. However, as explained by the Supreme Court in Whirlpool Corporation v. Registrar of Trademarks 1998 (10) TMI 510 - SUPREME COURT there are exceptions to this rule one of which is that the order under challenge is itself without jurisdiction. In the present case the impugned orders are, for the reasons explained, clearly without jurisdiction. - Decided in favour of assessee.
Issues Involved:
1. Validity of penalty orders under Section 271(1)(c) of the Income Tax Act, 1961. 2. Limitation period for imposing penalties under Section 275(1)(a) of the Income Tax Act, 1961. 3. Maintainability of writ petitions despite the existence of an alternative statutory remedy. Issue-wise Detailed Analysis: 1. Validity of Penalty Orders under Section 271(1)(c) of the Income Tax Act, 1961: The penalty orders dated 26th April 2018, passed by the Deputy Commissioner of Income Tax, Circle 1 (3) (1), International Taxation, New Delhi, were challenged by the petitioner. The penalty was levied at 100% of the tax sought to be evaded. The petitioner argued that the penalty orders were time-barred under Section 275(1)(a) of the Act, as they were not passed within six months of the receipt of the ITAT order by the Revenue. The court examined the timeline of events, including the issuance of show cause notices (SCNs) and the dates when the ITAT orders were received by various officers. 2. Limitation Period for Imposing Penalties under Section 275(1)(a) of the Income Tax Act, 1961: The court scrutinized Section 275(1) of the Act, which stipulates that no order imposing a penalty shall be passed after the expiry of six months from the end of the month in which the order of the ITAT is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, whichever period expires later. The court noted that the ITAT order dated 27th January 2017 was received by the CIT (Judicial) on 17th April 2017, as confirmed by the Central Public Information Officer (CPIO) of the ITAT. The court rejected the Revenue's claim that the limitation period began only when the jurisdictional CIT received the order on 1st November 2017. The court emphasized that the limitation period starts when the order is received by any of the designated officers, not necessarily the jurisdictional CIT. 3. Maintainability of Writ Petitions Despite the Existence of an Alternative Statutory Remedy: The Revenue contended that the petitioners had an efficacious statutory remedy available against the impugned penalty orders, referencing the Supreme Court decision in CIT v. Chhabil Dass Agarwal. However, the court noted that exceptions to this rule exist, particularly when the order under challenge is without jurisdiction. The court found that the impugned penalty orders were issued beyond the six-month limitation period and were thus without jurisdiction. Consequently, the court held that the writ petitions were maintainable. Conclusion: The court concluded that the impugned penalty orders dated 26th April 2018 were issued far beyond the six-month period of limitation as per Section 275(1)(a) of the Act and were therefore invalid. The court set aside the penalty orders and dismissed the pending applications. The court also highlighted the mandatory nature of the limitation period for imposing penalties, emphasizing that it cannot be circumvented by delaying the dispatch of the ITAT order to the concerned jurisdictional CIT.
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