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TMI Blog2023 (3) TMI 369X X X X Extracts X X X X X X X X Extracts X X X X ..... f being heard. In this case,the initial return qua the AY in issue i.e., AY 2007-08 was filed on 31.03.2007, and the revised return was filed on 31.03.2009. The scrutiny assessment under Section 143(3), concerning AY 2007-08, was framed on 28.10.2011. Despite the fact that the issue concerning limitation got flagged as far back as on 09.09.2013, and then again in an internal communication dated 11.07.2014, no steps were taken for the issuance of a SCN. The SCN was issued only on 09.11.2017. Delay in issuing the impugned SCN dated 09.11.2017 was inexcusable. There is no explanation, whatsoever, available on the record, as to why the SCN under Section 274 of the Act was not issued in 2013-14, if not earlier. As a matter of fact, there is no explanation, even with regard to the period falling between the time when the scrutiny assessment was framed [i.e., on 28.10.2011] and the communication dated 09.09.2013. Period for commencement of limitation prescribed in terms of the second limb of clause (c) of sub-section (1) of Section 275 of the Act would commence either from 2013 or 2014, there is a period of unexplained substantial delay, as the SCN, concededly, was issued only on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be necessary to adjudicate the issue raised in the present petition. 6. On 31.10.2007, the petitioner had filed its return for Assessment Year (AY) 2007-08. In the said return, the petitioner declared, initially, its taxable income as Rs.47,39,42,143/-. 6.1 However, on 31.03.2009, the petitioner filed a revised return, and pegged its taxable income at Rs.47,14,28,736/-. Pertinently, the petitioner in the revised return added back certain expenses, amounting to Rs.84,62,03,987/- by way of abundant caution, having regard to the provisions of Section 40(a)(ia) of the Act. 7. In the succeeding AY i.e., AY 2008-09, the petitioner, while filing its return, claimed the very same expense which it had added back as deduction, as the said amount had actually been expended. Thus, Rs.84,62,03,987/-, which had been added back in AY 2007-08 was claimed as deduction in AY 2008-09. The return for AY 2008-09 was filed on 30.09.2008. The petitioner, as per the record, declared in this AY, a loss amounting to Rs.21,00,37,579/-. 8. The record shows, that the petitioner s return for AY 2007-08 was subjected to scrutiny, and an assessment order under Section 143(3) of the Act was framed on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed order was followed by a second SCN dated 27.06.2018, which as alluded to hereinabove, has also been assailed. It is in this backdrop, that the petitioner has approached the Court, once again, by way of the instant writ petition. 12. Counsel for both sides have advanced their submissions in the matter. 13. In support of the petitioner s case, Mr Sachit Jolly, learned counsel has argued, that the issuance of the impugned SCN i.e., 09.11.2017 [which forms the foundation of the impugned order dated 14.06.2018] was woefully delayed. 13.1 Mr Jolly points out, that the said SCN was issued nine years after the end of the AY in issue, and ten years from the date of the relevant FY. 13.2 Mr Jolly further submits, that once the respondent/revenue had taken, in principle, a decision to initiate penalty proceedings, the issuance of the SCN, as mandated under Section 274 of the Act, could not have been delayed interminably, as was the approach adopted by the respondent/revenue in this case. The argument advanced is, that there are several provisions in the Act, where although a limitation period is prescribed for completion of proceedings, nothing is stated as to when the proceedi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (1) No order imposing a penalty under this Chapter shall be passed- (a) xxx xxx xxx (b) xxx xxx xxx (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 penalty has been initiated, are completed, or six months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later [Emphasis is ours] 17. As would be evident, the aforementioned provision has two limbs. The first limb concerns fixation of period of limitation when penalty is sought to be imposed as fallout of action taken in another proceeding. On the other hand, the second limb of clause (c) of Sub-section (1) of Section 275 of the Act fixes the period of limitation, where initiation of action of imposition of penalty is taken on a stand-alone basis i.e., not as a consequence of action taken in another proceeding. 17.1 For the second limb, the legislature has provided a limitation of six months from the end of the month in which action for imposition of penalty is initiated. 17.2 It is apparent, that while a timeframe has been provided for the conclusi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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