2023 (9) TMI 610 - AT - Income Tax

Penalty u/s. 271(1)(b) - period of limitation - failure on his part to comply with the notice issued u/s. 148 - time period contemplated in clause (a) of subsection (1) to Section 275 - HELD THAT - As the limitation for imposing penalty u/s 271(1)(b) as per the time period contemplated in clause (a) of subsection (1) to Section 275, i.e six months from the end of the month in which appellate order was received ITAT order dated 17,12,2014, expired on 31.07.2015, therefore, the order dated 27.07.2015 imposing the aforesaid penalty was well within the limitation period. We, thus, in terms of our aforesaid observations are unable to concur with the solitary contention advanced by the Ld. AR, i.e the penalty imposed by the A.O under Section 271(1)(b) was barred by limitation, and uphold the view taken by the lower authorities. Thus, the grounds of appeal raised by the assessee are dismissed.

Summary

Issues Involved:
1. Legality and justification of penalty imposed u/s 271(1)(b).
2. Non-provision of opportunity of being heard before imposing penalty.
3. Penalty order being barred by limitation.

Summary:

1. Legality and Justification of Penalty Imposed u/s 271(1)(b):
The assessee, engaged in manufacturing and trading of iron and steel, failed to file income returns, prompting the A.O. to initiate proceedings u/s 147 and issue a notice u/s 148. Due to non-compliance with multiple notices, the A.O. framed the assessment u/s 144 r.w.s. 147 and assessed income at Rs. 5,62,910/-, initiating penalty proceedings u/s 271(1)(b). The A.O. imposed a penalty of Rs. 70,000/- for seven defaults, which was scaled down to Rs. 60,000/- by the CIT(Appeals). The CIT(Appeals) upheld the penalty for non-compliance with six notices during the assessment proceedings.

2. Non-Provision of Opportunity of Being Heard:
The appellant contended that the penalty was imposed without serving a show-cause notice, as the address in the Income Tax records was outdated. The CIT(Appeals) dismissed this contention, stating that the show-cause notices were issued to the last known address and that the appellant failed to update the address with the A.O. The CIT(Appeals) emphasized that the appellant cannot benefit from his failure to update the address and dismissed the ground of appeal.

3. Penalty Order Being Barred by Limitation:
The appellant argued that the penalty order was barred by limitation as per Section 275(1)(c). The CIT(Appeals) and the Tribunal concluded that the penalty proceedings initiated in the assessment order were governed by Section 275(1)(a), which provides a time limit of six months from the end of the month in which the appellate order was received. Since the ITAT order was received on 20.01.2015 and the penalty order was passed on 27.07.2015, it was within the limitation period. The Tribunal upheld the view of the lower authorities, dismissing the contention that the penalty was barred by limitation.

Conclusion:
The Tribunal dismissed all the appeals, upholding the penalties imposed by the A.O. and confirmed by the CIT(Appeals) for the assessment years 1993-94, 1994-95, and 1995-96. The penalties were found to be legally justified, properly served, and within the limitation period as per Section 275(1)(a).