2013 (7) TMI 478 - SC - Income Tax

Penalty u/s 271 - Period of limitation u/s 275(1)(a) for imposing penalty - Held that - Questions requires to be answered first by ITAT - Matter remanded back to the Tribunal - Orders of High Court and Tribunal set aside - Decided in favour of Revenue.

Summary

Issues:
1. Delay condonation and leave granted by the Supreme Court.
2. Interpretation of provisions of Section 275(1) of the Income Tax Act, 1961 by the Income Tax Appellate Tribunal.
3. Setting aside of judgments and orders by the High Court and Tribunal.
4. Remand of the matter back to the Tribunal for deciding questions of law.

Analysis:
1. The Supreme Court first addressed the issue of delay condonation and granted leave in the case. The Court noted specific questions raised by the Revenue regarding the interpretation of Section 275(1) of the Income Tax Act, 1961. The questions revolved around whether the Income Tax Appellate Tribunal failed to appreciate the period of limitation for penalty initiation and issuance.

2. The Court emphasized that these questions needed to be answered by the Tribunal in the first instance. Therefore, the Supreme Court set aside the judgments and orders passed by both the High Court and the Tribunal. The matter was remanded back to the Tribunal for a fresh consideration. The Court directed the Tribunal to decide the questions of law after providing an opportunity of hearing to both parties involved in the case.

3. By disposing of the Civil Appeal in this manner, the Supreme Court ensured that the specific legal issues concerning the interpretation of Section 275(1) of the Income Tax Act, 1961 would be addressed by the competent authority, i.e., the Income Tax Appellate Tribunal. This decision aimed to uphold the principles of justice and fairness by allowing the Tribunal to reconsider the matter based on the legal questions raised by the Revenue.