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TMI Blog2023 (5) TMI 697X X X X Extracts X X X X X X X X Extracts X X X X ..... ould have to be reckoned from 01.02.2020 that would end to 31.07.2020. Therefore, penalty order passed on 16.12.2020 is barred by limitation and therefore, the same is quashed. Appeal of the assessee is allowed. - ITA No. 160/JP/2023 - - - Dated:- 10-5-2023 - Shri Sandeep Gosain, JM And Shri Rathod Kamlesh Jayantbhai, AM For the Assessee : Sh. P. C. Parwal (CA) For the Revenue : Smt Monisha Chaudhary (Addl. CIT) ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM This appeal is filed by assessee and is arising out of the order of the National Faceless Appeal Centre, Delhi dated 01/03/2023 [here in after (NFAC)/ ld. CIT(A) ] for assessment year 2014-15 which in turn arise from the order dated 16.12.2020 passed under section 271C of the Income Tax Act, by Addl. CIT, Range TDS, Udaipur. 2. In this appeal, the assessee has raised following grounds: - 1. The ld. CIT(A), NFAC has erred on facts and in law in upholding the penalty order passed by Add. CIT, Range-TDS, Udaipur ignoring the penalty proceedings initiated after 7 years of the transaction is illegal bad in law. 2. The Ld. CIT(A), NFAC has erred on facts and in confirming the levy of penalty of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fixing the date of hearing on 06.03.2020 and intimated the assessee about objection raised by revenue audit party on TDS default on purchase consideration of property purchase of Rs. 57,94,000/- by the assessee during F.Y 2013-14, but neither submitted any written reply nor presented himself in the office of the Addl. CIT for determining TDS default and to pass the order u/s 201(1)/201(1A) of the I.T. Act, 1961, the case was forwarded to the ITO (TDS), Ajmer vide letter No. 1337 dated 12.03.2020. Later, the ITO(TDS), Ajmer referred vide letter no. 229 dated 02.11.2020 that order u/s 201(1)/201(1A) of the I.T. Act, 1961 was passed on 28.10.2020. The copy of same was endorsed to the office of undersigned for initiating penalty proceedings u/s 271C of the I.T. Act, 1961. It was reported that deductor has not deducted tax at source u/s 194IA of the I.T. Act, 1961 on immovable property worth Rs. 57,94,000/- at the time of purchase of property from Sh. Indrajeet S/o Sh. Girdhari Lal resident of Dholabhata, Ajmer on 05.08.2013. The deductor assessee was treated as assessee in default as per provisions of section 201(1) of the Act, 1961 for not deducting of TDS amount of Rs. 57,940/- on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , I find that words used therein are * If any person fails to... (a)..... (b)... then, such person shall be liable to pay, by way of penalty.... . The words in section 271C are shall be liable to pay, which means there is no discretion given to any authority under the Act for not levying penalty. The only exception is by way proving reasonable cause u/s 273B. As discussed in the appeal earlier decided, the assessee has attempted to prove reasonable cause by stating that the government authorities were not aware and that the provisions and that section 1941A has been introduced only two months before date of transaction. I am not inclined to agree with the assessee on this count as ignorance of law is no excuse and the ignorance by any authority or any other person does not dilute the obligation cast on the assessee to deduct TDS. Based on the discussion above, I am of the view that the assessee has not able to demonstrate reasonable cause u/s 273B and I therefore uphold the levy of penalty of Rs.57,940. 7. In the result, both appeals are dismissed. 5. As the assessee did not received relief in respect of levy of penalty u/s. 271C he has preferred this appeal before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2013. The show cause notice for levying penalty u/s 271C was issued on 21.01.2020. The notice so issued is after 6 years of the transaction entered by the assessee. It is a settled law that where the statue does not provide any time limitation for issue of notice, such notice should be issued within a reasonable time. Hon ble Supreme Court in case of State of Punjab Vs. Bhatinda District Cooperative Milk Producers Union Limited (2007) 11 SCC 363 at para 17 18 of its order held as under:- 17. It is trite that if no period of limitation has been prescribed, statutory authority must exercise its jurisdiction within a reasonable period. What, however, shall be the reasonable period would depend upon the nature of the statute, rights and liabilities thereunder and other relevant factors. 18. Revisional jurisdiction, in our opinion, should ordinarily be exercised within a period of three years having regard to the purport in terms of the said Act. In any event, the same should not exceed the period of five years. The view of the High Court, thus, cannot be said to be unreasonable. Reasonable period, keeping in view the discussions made hereinbefore, must be found out from the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hough no limitation was provided in Income-tax Act. Threat of initiating penalty proceeding could not be allowed to hang over head of assessee for an unreasonable period of time. There should be an end to proceeding, that also within a reasonable period. Penalty proceeding initiated by AO after expiry of almost six years was barred by limitation. Hence, penalty order passed ignoring that penalty proceeding is initiated after 6 years of the transaction is illegal bad in law. 2. Section 271C provides that if any person fails to deduct the whole or any part of the tax as required under the provisions of Chapter XVII-B, then such person shall be liable to pay, by way of penalty, a sum equal to the amount of tax which such person failed to deduct. Section 273B provides that no penalty shall be imposable on the person or the assessee for any failure referred to in section 271C if he proves that there was reasonable cause for the said failure. Section 194-IA which casts an obligation on the buyer of immovable property to deduct TDS @ 1% where the purchase consideration exceeds Rs.50 lakhs was introduced by FA, 2013 w.e.f. 01.06.2013. The assessee entered into the transaction for p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be contrary to common sense and reason if it were so. Scrutton, L.J. also once said : It is impossible to know all the statutory law, and not very possible to know all the common law. But it was Lord Atkin who, as in so many other spheres, put the point in its proper context when he said in Evans vs. Bartlam (1937) AC 473 : ....... the fact is that there is not and never has been a presumption that every one knows the law. There is the rule that ignorance of the law does not excuse, a maxim of very different scope and application. It is, therefore, not possible to presume, in the absence of any material placed before the Court, that the appellant had full knowledge of its right to exemption so as to warrant an inference that the appellant waived such right by addressing the letter dt. 25th June, 1970. We. accordingly, reject the plea of waiver raised on behalf of the State Government. 3. The Addl. CIT-TDS initiated penalty proceedings u/s 271C vide notice dt. 21.01.2020. Penalty u/s 271C is independent of assessment proceedings and thus the limitation for levy of penalty u/s 271C would be governed by clause (c) of section 275(1). This clause provides that no order impos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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