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TMI Blog2015 (10) TMI 1281X X X X Extracts X X X X X X X X Extracts X X X X ..... By the impugned order the ITAT affirmed the order of the Commissioner of Income Tax ['CIT (A)'] quashing the penalty imposed on the Assessee, JKD Capital and Finlease Limited, under Section 271-E of the Act by an order dated 20th March 2012 of the Additional Commissioner of Income Tax ['Additional CIT']. 3. While finalising the assessment order dated 28th December 2007 the Assessing Officer ['AO'] in the concluding paragraph issued a direction to initiate proceedings against the Assessee under Sections 271 (1) (c) and 271-E of the Act. Admittedly, under Section 271-E (2) of the Act, any penalty under Section 271-E (1) can only be imposed by the Joint Commissioner of Income Tax ['Joint CIT']. Consequently, the AO referred the matter to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o could have done so. Therefore, for the purpose of limitation under Section 275 (1) (c), the relevant date should be the date on which notice in relation to the penalty proceedings were issued. In the present case, as the Additional CIT issued notice to the Assessee on 12th March 2012, the order of the Additional CIT passed on 20th March, 2012 was within limitation. 8. We are unable to agree with the above submission of learned Standing counsel for the Revenue. Section 275 (1) (c) reads as under: 275. (1) No order imposing a penalty under this Chapter shall be passed (a).... (b)..... (c) in any other case, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner of Income-Tax v. Hissaria Bros. (2007) 291 ITR 244(Raj) in the following terms: "The expression other relevant thing used in s. 275(1)(a) and cl. (b) of Sub-s. (1) of S. 275 is significantly missing from cl. (c) of s. 275(1) to make out this distinction very clear. We are, therefore, of the opinion that since penalty proceedings for default in not having transactions through the bank as required under ss. 269SS and 269T are not related to the assessment proceeding but are independent of it, therefore, the completion of appellate proceedings arising out of the assessment proceedings or the other proceedings during which the penalty proceedings under ss. 271D and 271E may have been initiated has no relevance for sustaining or not su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The Additional CIT ought to have been conscious of the limitation under Section 275 (1) (c), i.e., that no order of penalty could have been passed under Section 271-E after the expiry of the financial year in which the quantum proceedings were completed or beyond six months after the month in which they were initiated, whichever was later. In a case where the proceedings stood initiated with the order passed by the AO, by delaying the issuance of the notice under Section 271-E beyond 30th June 2008, the Additional CIT defeated the very object of Section 275 (1) (c). 12. In that view of the matter, the order of the CIT (A) which has been affirmed by the impugned order of the ITAT does not suffer from any legal infirmity. 13. No substantial ..... X X X X Extracts X X X X X X X X Extracts X X X X
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