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TMI Blog2023 (12) TMI 1329X X X X Extracts X X X X X X X X Extracts X X X X ..... 272A(2)(e) of the Act is not within reasonable time. As considering Hon ble Delhi High Court in the case of JKD Capital Finlease Ltd. [ 2015 (10) TMI 1281 - DELHI HIGH COURT ] we are of the opinion that penalty order has not been passed within reasonable time. Accordingly, we quash the penalty order on this reason. Decided in favour of assessee. - SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SMT. MADHUMITA ROY, JUDICIAL MEMBER For the Appellant : Smt. Suman Lumkar, A.R. For the Respondent : Shri Nischal B., D.R. ORDER PER CHANDRA POOJARI, ACCOUNTANT MEMBER: This appeal by assessee is directed against order of NFAC passed u/s 250 of the Income-tax Act,1961 ['the Act' for short] for the assessment year 2014-15 dated 30.9.2023. The assessee has raised following grounds: 1. The learned Commissioner of Income tax(Appeals), NFAC. Delhi has erred in Confirming the levy of penalty u/s 272A(2)(e) of the Act in the case of the appellant as levied by the JCIT. The orders as passed/confirmed being void ab initio, without Jurisdiction and are liable to be quashed. 2.1 In any case, the learned CIT(A) has erred in not appreciating the fact that the initiation- of penalty proceedings and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22, which is time barred. For this purpose, she relied on the order of the Tribunal in the case of Amit Sabharwal in ITA No.886/Del/2018 dated 14.5.2019. In the present case, as per clause (c) of section 275(1) of the Act, the penalty proceedings u/s 272A(2)(e) of the Act have been initiated vide notice dated 21.12.2020. According to ld. A.R., the time limit to pass penalty order is 6 months from the end of month in which penalty proceedings were initiated would expire on 30.6.2021. She, therefore submitted that, competent authority could have imposed penalty before 30.6.2021. However, the penalty order in the present case has been passed on 5.3.2022, which is clearly barred by limitation. 3.1 On the other hand, ld. D.R. submitted that in the normal circumstances the above argument of the assessee s counsel holds good. However, in the present case, the penalty proceedings though initiated on 21.12.2020, the time limit to complete the penalty proceedings will lapse on 30.6.2021. However, this period is Covid period. Penalty order could not able to be passed and the period of limitation has been suspended by Hon ble Supreme Court in Miscellaneous Application No.21 of 2022 and in Misc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 71B initiated 34 months after the completion of assessment was held to be invalid. He accordingly submitted that since, in the instant case, the penalty proceedings have been initiated after a period of more than four years, therefore, the penalty so levied by the Assessing Officer and upheld by the CIT(A) is not justified. She also relied on the decision of the Hon'ble Delhi High Court in the case of CIT vs. NHK Japan Corporation reported in 305 ITR 132. 3.3 In the present case also, the assessee has filed return of income for the assessment year 2014-15 on 31.3.2017. There was no regular assessment and the return of income has been accepted as it is. In our opinion, copy of the return of income itself serve as an assessment order for all practical purposes. So the penalty proceedings has been initiated vide notice dated 21.12.2020, which is approximately after lapse of 45 months. Therefore, the penalty order passed by ld. AO u/s 272A(2)(e) of the Act is not within reasonable time. 3.4 Further, the Hon ble Delhi High Court in the case of PCIT Vs. JKD Capital Finlease Ltd. in ITA No.780 of 2015 vide judgement dated 13.10.2015, held as under: 8. We are unable to agree with the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment proceedings or the other proceedings during which the penalty proceedings under ss. 27ID and 27IE may have been initiated has no relevance for sustaining or not sustaining the penalty proceedings and, therefore, cl. (a) of sub-s. (1) of s. 275 cannot be attracted to such proceedings. If that were not so cl. (c) of s. 275(1) would be redundant because otherwise as a matter of fact ever/penalty proceeding is usually initiated when during some proceedings such default is noticed, though the final fact finding in this proceeding may not have any bearing on the issues relating to establishing default e.g. penalty for not deducting tax at source while making payment to employees, or contractor, or for that matter not making payment through cheque or demand draft where it is so required to be made. Either of the contingencies does not affect the computation of taxable income and levy of correct tax on chargeable income; if cl. (a) was to be invoked, no necessity of cl. (c) would arise. (emphasis supplied) 11. In fact, when the AO recommended the initiation of penalty proceedings the AO appeared to be conscious of the fact that he did not have the power to issue notice as far as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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