2020 (1) TMI 826 - HC - Income Tax

Penalty u/s 271(1)(D) - impugned penalty order barred by limitation u/s 275 or not? - HELD THAT - Since the question of limitation may go to the root of the matter and whether the penalty order in question can be sustained or not would depend upon it being within the limitation or not as prescribed under Section 275 of the Act, the learned Tribunal could have examined the said contention raised by the Assessee, as noted by it in para 4 of its order and discussing the relevant facts and case laws, it could have pronounced upon the issue as to whether the penalty order under Section 271-D of the Act passed by the Assessing Authority on 31.03.1995 was within limitation or not. But the learned Tribunal has not admitted the said plea of the Assessee. Therefore, we remit back the matter to the learned Tribunal and request the learned Tribunal to decide the said question after hearing both parties once again. Therefore, the appeal of the Assessee is disposed of, without answering the substantial questions of law raised before us and we remand the case back to the learned Tribunal on the limited issue of deciding the question of limitation as raised by the Assessee.

Summary

Issues:
1. Whether the penalty order passed under Section 271-D of the Income Tax Act is barred by limitation as prescribed under Section 275 of the Act?

Analysis:

Issue 1:
The primary issue in this case revolves around the question of whether the penalty order under Section 271-D of the Income Tax Act is barred by limitation as per Section 275 of the Act. The Assessee challenged the order dated 29.08.2005 passed by the Income Tax Appellate Tribunal for the Assessment Year 1991-92. The Tribunal, in its order, acknowledged the contentions raised by the Assessee regarding the bar of limitation. However, the Tribunal declined to entertain this plea as it required an investigation into facts and the Assessee had not filed any Cross-objections. The Assessee argued that the Tribunal should have considered the plea based on the dates of the notice and order, which were available on record. On the other hand, the Revenue contended that the Tribunal did not address the limitation issue as the Assessee had not filed Cross-objections. The High Court, after hearing both parties, concluded that the question of limitation is crucial to the case's outcome and remitted the matter back to the Tribunal for a fresh decision on this specific issue.

Conclusion:
The High Court's judgment focuses on the significant issue of whether the penalty order under Section 271-D of the Income Tax Act is time-barred as per Section 275. The Court emphasized the importance of examining this question, even in the absence of Cross-objections, as it could impact the validity of the penalty order. By remitting the case back to the Tribunal for a detailed consideration of the limitation issue, the High Court ensured a fair and thorough examination of this critical aspect of the case.