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TMI Blog2022 (11) TMI 1038X X X X Extracts X X X X X X X X Extracts X X X X ..... appeals, the ITAT was correct in law in deleting the penalty imposed by the Additional Commissioner of Income Tax, u/s 271D on the ground that the penalty order(s) dated 29th September, 2009, was passed beyond the time period prescribed by Section 275(1)(c) the same having been passed after the lapse of six months from the end of the month in which the penalty proceedings were initiated by the AO. - Decided against revenue. - ITA 577/2018 ITA 580/2018, ITA 583/2018 - - - Dated:- 17-11-2022 - HON'BLE MR. JUSTICE MANMOHAN AND HON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA Appellant Through: Mr. Kunal Sharma, Senior Standing Counsel for Revenue. Mr. Sanjay Kumar, Senior Standing Counsel for Revenue. Respondent Through: Mr. Rajiv Saxena, Ms. Sumayla Saxena and Mr. Shyam Sunder, Advocates. J U D G M E N T MANMEET PRITAM SINGH ARORA, J: 1. By way of the present appeals, Revenue has assailed the common judgment and order of the Income Tax Appellate Tribunal ( ITAT ) dated 24 th October, 2017, in ITA Nos. 3178/Del/2010, 3150/Del/2010 and 3171/Del/2010 for the Assessment Year ( AY ) 2006-07. This Court while admitting these appeals on 15th May, 2018 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts of the said case, held the same to be barred by limitation by reckoning the date of initiation of penalty to be the date of making reference by the AO to the prescribed authority. However, in the present case, the reference to the prescribed authority and issuance of SCN, both were carried out in the month of March, 2009, and therefore the limitation would ve expired on 30 th September, 2009. He states in the present case the penalty orders were passed on 29th September, 2009, thus, within the limitation period. 2.6. He lastly, states that the ITAT erred in holding that the AO had initiated the penalty proceedings in the assessment order itself and therefore, the limitation period is to be reckoned from the end of the month of December, 2008, since the action for imposition of penalty was initiated vide the assessment order(s) itself. He states that the ITAT failed to appreciate that since the AO is not the prescribed authority under Section 271D of the Act, the AO s satisfaction with respect to initiation of penalty proceedings is not relevant and the role of the AO was limited to bringing the fact of the violation of Section 269SS of the Act, to the knowledge of the prescr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Mehta and Sons, Ltd. v. The Century Spinning and Manufacturing Co., Ltd., AIR 1962 SC 1314 , to contend that if the question was practically covered by the decision of the highest Court or if the general principles to be applied in determining the questions of law are well settled and the only question was of applying the settled principles to the facts of the case it would not be a substantial question of law. He, therefore, states that there is no substantial question of law to be determined in the present appeals. 4. We have heard the learned counsel for the parties. The brief facts in these appeals are as under: - 4.1. ITA No. 577/2018 The said Respondent, Assessee, is engaged in the business of carrying out land development work and had filed its Return of Income ( ROI ) on 31st March, 2007, declaring a loss of Rs. 56,022/-. The Assessee s case was selected for scrutiny through CASS and Notice(s) were issued under Section 143(2) and 142(1) of the Act, on 20th February, 2008, and 10th March, 2008, respectively. During the Assessment proceedings, the AO observed that the Assessee had received cash aggregating to Rs. 5,43,66,000/- from three companies. The AO in light o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the Assessee(s) raised a legal ground with respect to limitation and prayed that the ITAT should first determine the said legal ground. The impugned order records that the Revenue agreed to the said request of the Assessee(s) and therefore, the legal issue of limitation was determined in the first instance. The ITAT after taking note of the admitted facts concluded that since the penalty proceedings were initiated in the assessment order(s) itself, therefore, the limitation period will begin to run from end of the month of December, 2008 and not from March, 2009, that is the date on which the SCNs under Section 271D of the Act were issued. The ITAT in concluding as above, followed the judgment of this Court in JKD Capital and Finlease Ltd. (supra) and Mahesh Wood Products Pvt. Ltd. (supra). 7. The relevant admitted facts for determining the controversy in the present appeals are: a. The quantum proceedings with respect to the three Assessee(s) were completed in December, 2008 and the penalty proceedings against the Assessee(s), inter alia under Section 271D of the Act for violating the provision of Section 269SS of the Act, had been initiated by the AO at the time of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... initiation of penalty proceedings has been settled by the predecessor bench of this Court in its decision of JKD Capital and Finlease Ltd. (supra) which reads as under: - 2 While finalising the assessment order dated December 28, 2007 the Assessing Officer ( the AO ) in the concluding paragraph issued a direction to initiate proceedings against the assessee under sections 271(1)(c) and 271E of the Act. Admittedly, under section 271E(2) of the Act, any penalty under section 271E(1)can only be imposed by the Joint Commissioner of Income-tax ( the Joint CIT ).Consequently, the Assessing Officer referred the matter to the Additional Commissioner of Income-tax. 3. A perusal of the order dated March 20, 2012, of the Additional Commissioner of Income-tax shows that a show-cause notice initiating penalty proceedings under section 271E was issued to the assessee on March 12, 2012, requiring it to explain as to why penalty should not be levied on it under section 271E on account of violation or the provisions of section 269T of the Act. With the assessee having failed to furnish the required information, the Additional Commissioner of Income-tax proceeded to confirm the penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y proceedings were initiated by the AO in the assessment order(s) itself. Illustratively, the direction contained in the assessment order dated 17 th December, 2008, pertaining to ITA No. 577/2018, Rishikesh Buildcon Pvt. Ltd. may be referred to, which reads as under:- Initiate penalty proceedings u/s, 271(1)(c) for concealment of income 27l(1)(b) for non-compliance of statutory notices, 271 D for violating the provisions of Section 269 SS as discussed above. 12. The predecessor bench of this Court in the aforesaid judgments has held that where the AO has initiated the penalty proceedings in his/her assessment order, the said date is to be taken as the relevant date as far as the Section 275(1)(c) of the Act is concerned. In these cases, the quantum proceedings were completed by the AO on 17th/18th December, 2008, and the AO initiated the penalty proceedings in December, 2008, thus, the last date by which the penalty order could have been passed is 30th June, 2009. The six months from the end of the month from which action of imposition of penalty was initiated would expire on 30th June, 2009. However, in this case, admittedly, the penalty order(s) were passed on 2 ..... 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