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TMI Blog2023 (1) TMI 721X X X X Extracts X X X X X X X X Extracts X X X X ..... vs. Mahesh Woods Products (P) Ltd. [ 2017 (5) TMI 433 - DELHI HIGH COURT] and PCIT vs. Rishikesh Buildcon Pvt. Ltd. [ 2022 (11) TMI 1038 - DELHI HIGH COURT] when the date of initiation for the purposes of Section 275 is 27.03.2019 and, therefore, order ought to have been passed within six months i.e. by 30.09.2019, whereas order has been passed on 31.10.2019. Hence, beyond limitation. Thus we hold that the penalty levied in this case deserves to be deleted. Hence, we set aside the orders of the authorities below and delete the penalty. - Decided in favour of assessee. - I.T.A No. 3018/Del/2022 Stay Appl. No.413/Del/2022 - - - Dated:- 17-1-2023 - SHRI SHAMIM YAHYA , ACCOUNTANT MEMBER AND MS. ASTHA CHANDRA , JUDICIAL MEMBER For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted after almost 14 years from the end of the financial year which cannot be considered reasonable time period for initiating proceedings as held by various judicial authorities. 2.1.1 That apart, the penalty proceedings have been initiated on the basis of the assessment completed under section 143(3) of the Act on 17.12.2008. It is submitted that the Ld. AO had knowledge of the disallowance made by the AO under section 40(a)(i) since prior to 17.12.2008, and therefore, the penalty proceedings are barred by limitation. 2.2 That on the facts and in the circumstances of the case and in law, the penalty order passed by the Ld. AO is barred by limitation in terms of the second limb of the section 275(1)(c) of the Act since the penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... back in the next year without claiming deduction in the present year is revenue neutral and, therefore, no penalty ought to be levied. 2.6 That on the facts and circumstances of the case and in law, the Ld. CIT(A) erred in confirming penalty levied by the Ld. AO u/s 271C of the Act, on the suo-moto disallowances of the year-end provisions made by the Appellant company u/s 40(a)(i) of the Act without appreciating that there was reasonable cause for the said failure as per the provisions of Sec 273B of the Act. That the above grounds are independent and without prejudice to each other. The Appellant craves leave to add, amend, alter, delete, rescind, forgo or withdraw any of the above grounds of appeal either before or during th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... full taxes on the income earned on their own ... 4. However, learned CIT(A) was not convinced. He confirmed the levy of penalty. Against this order assessee is in appeal before us. 5. We have heard both the parties and perused the record before us. 6. Learned Counsel of the assessee contended that penalty proceedings in this case has been initiated belatedly and much after reasonable period of 4/6 years. As a matter of fact learned Counsel submitted that penalty proceedings have been initiated 14 years after the assessment year concerned. He submitted that the proceedings are time barred. He further submitted that penalty proceeding is barred by limitation under section 275 of the Act. He further referred to several case laws in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that assessee deserves to succeed on both counts. Firstly, penalty proceedings have been initiated after 14 years and the same is belated and beyond reasonable limitation period of time and this proposition is supported by the decision of the Hon ble Jurisdictional High Court in the case of CIT Vs. NHK Japan Broadcasting 172 Taxman 230 and Bharti Airtel vs. UOI 291 CTR 254. In this regard, we may refer to the decision in NHK Japan Broadcasting (supra) as under:- 21. We are not inclined to disturb the time-limit of four years prescribed by the Tribunal and are of the view that in terms of the decision of the Supreme Court in Bhatinda District Co-op. Mil (P.) Union Ltd.'s case (supra) action must be initiated by the competent authori ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... acting on the said recommendation. The Court held that the starting point would be the 'initiation' of penalty proceedings. Given the scheme of Section 275(1)(c) it would be the date on which the AD wrote a letter to the ACIT recommending the issuance of the SCN. While it is true that the ACIT had the discretion whether or not to issue the SCN, if he did decide to issue a SCN, the limitation would begin to run from the date of letter of the AD recommending 'initiation' of the penalty proceedings. 10. In the present case, the limitation in terms of Section 275 (1) (iii) of the Act began to run on 23rd July, 2012 and the last date for passing the penalty orders was 31st January, 2013. Therefore, the penalty orders issued ..... X X X X Extracts X X X X X X X X Extracts X X X X
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