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TMI Blog2017 (10) TMI 1617X X X X Extracts X X X X X X X X Extracts X X X X ..... re us, the penalty proceedings were initiated in the assessment orders itself and, therefore, the limitation period will begin to run from December 2008 itself and not from March 2009 when the penalty notices were issued. Respectfully following the ratio laid down by JKD CAPITAL FINLEASE LTD. [ 2015 (10) TMI 1281 - DELHI HIGH COURT] , MAHESH WOOD PRODUCTS PVT. LTD., [ 2017 (5) TMI 433 - DELHI HIGH COURT] we have no hesitation in holding that all the three penalty orders were barred by limitation and were void ab initio. Accordingly, without going into the merits of the cases, we dismiss all the three appeals of the Department as the penalty orders itself were void ab initio being barred by limitation. Decided in favour of assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , after considering the replies of the assessee, penalty of Rs. 3,90,61,000 was imposed vide order dated 29/09/2009. Aggrieved, the assessee approached the Ld. CIT (Appeals) who deleted the penalty on merits. Now the Department has approached the ITAT and has challenged the deletion of penalty by the Ld. CIT (Appeals). 2.2 ITA No. 3178/Del/2010 Rishikesh Buildcon (P) Ltd This company is also engaged in the work of carrying out land development. During the course of assessment proceedings, the AO observed that the assessee had received cash aggregating to Rs. 5,43,66,000/- from three companies. The AO proceeded to hold that there was a violation of section 269SS of the Act as the company had received cash in excess of Rs. 20,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f penalty by the Ld. CIT (Appeals). 3. At the outset, the Ld. Authorised Representative for the assessee sought to raise a legal ground and submitted that the adjudication of the legal ground goes to the very root of the matter. It was prayed that the Bench should first hear both the parties on the legal ground being raised. The Ld. CIT DR had no objection to the request of the Ld. AR. Therefore, we permit the Ld. AR to argue on the legal ground. The Ld. AR submitted that all the three orders of the AO imposing penalty under section 271D of the Act were barred by limitation. It was submitted that as per the provisions of section 275 of the Act, there were two distinct periods of limitation for passing the penalty order, one which is w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peals) by holding that the penalty order was passed beyond the period of limitation. The deletion was upheld by the ITAT and on the Department approaching the Hon ble High Court of Delhi, the Hon ble High Court refused to interfere with the adjudication of the ITAT wherein the ITAT had confirmed the order of the Ld. CIT (Appeals) by referring to a judgment of the Hon ble Delhi High Court in the case of CIT versus Worldwide Township Projects Ltd reported in 269 CTR 444. The Ld. Authorised Representative also placed reliance on another decision of the Hon ble Delhi High Court in the case of Principal Commissioner of Income Tax versus Mahesh Food Products Private Limited reported in 394 ITR 312 for the proposition that as per the scheme of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty orders were passed on 29/09/2009. Thus, the only question that remains to be adjudicated is as to whether the limitation period has to be calculated from the date on which the penalty proceedings were first initiated, that is the date of the assessment order or from the date on which the show cause notices under section 271D were issued, that is March 2009. The Hon ble Delhi High Court in the case of JKD Capital and Finlease Ltd (supra) had held that the starting point would be the initiation of penalty proceedings. In that case the AO had written a letter to the ACIT recommending the issuance of show cause notice. The Hon ble Delhi High Court noted that while it was true that the ACIT had the discretion whether or not to issue the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich the show cause notice was issued. In the present appeals before us, the penalty proceedings were initiated in the assessment orders itself and, therefore, the limitation period will begin to run from December 2008 itself and not from March 2009 when the penalty notices were issued. Therefore, respectfully following the ratio laid down by the Hon ble Delhi High Court in the above mentioned cases we have no hesitation in holding that all the three penalty orders were barred by limitation and were void ab initio. Accordingly, without going into the merits of the cases, we dismiss all the three appeals of the Department as the penalty orders itself were void ab initio being barred by limitation. 6. In the final result all the three ap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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