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TMI Blog2023 (11) TMI 1283X X X X Extracts X X X X X X X X Extracts X X X X ..... IT. Admittedly, the Ld. AO had made reference to Ld. JCIT on 25/03/2017 for initiating penalty proceedings in the instant appeals. Six months from the end of the month in which the action for imposition of penalty is initiated expired on 30/09/2017. Accordingly, the penalty order framed on 29/11/2017 would become barred by limitation as per provisions of section 275(1)(c) We have no hesitation to conclude that the penalty orders framed for both the assessment years are barred by limitation and, hence, liable to be quashed. - Shri M. Balaganesh, Accountant Member And Ms. Astha Chandra, Judicial Member For the Assessee : Sh. Salil Kapoor, Advocate. For the Department : Sh. Anuj Garg, Sr. DR. ORDER PER M. BALAGANESH, AM: Both the appeals filed by Assessee arises out of the common orders of the Learned Commissioner of Income Tax (Appeals)-IV, New Delhi, [hereinafter referred to as Ld. CIT(A) ] in Appeal No. CIT(A)-IV/KNP/10246 10247/DCIT-CC/DDN/2018-19 dated 31/07/2019 against the penalty orders passed by Joint Commissioner of Income Tax, Central Range, Meerut (hereinafter referred to as the Ld. AO ) u/s 271D of the Income Tax Act, 1961 (hereinafter referred to as the Act ) on 29/11/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 246A, and the Commissioner (Appeals) passes the order on or after the 1st day of June, 2003 disposing of such appeal, an order imposing penalty shall be passed before the expiry of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed, or within one year from the end of the financial year in which the order of the Commissioner (Appeals) is received by the Chief Commissioner or Commissioner, whichever is later;] (b) in a case where the relevant assessment or other order is the subject-matter of revision under section 263 21 [or section 264], after the expiry of six months from the end of the month in which such order of revision is passed; (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.] 4. The assessee s case herein falls u/s 275(1)(c) of the Act wherein penalty order should be passed on or before 30/09/2017 i.e. 6 months from the end of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the date of issuance of the Show Cause Notice ('SCN') that would be the relevant starting point. Accordingly he submits that the date of issuance of the SCN by the ACIT being 28 August, 2012, limitation would expire on 28 February, 2013. Therefore, the penalty orders having been passed on 26 February, 2013 would not barred by limitation. He also sought to distinguish the decision of this Court in PCIT-5 v. JKD Capital Finlease Ltd. (supra) by stating that in the said case, the gap between the intimation send by the AO recommending initiation of penalty proceedings and the action taken by the ACIT was nearly five years, whereas in the present case, it was slightly over one month. ** ** ** 9. However, this question came up for consideration in PCIT v. JKD Capital Finlease Ltd. (supra). The date on which the AO recommended the initiation of penalty proceedings was taken to be the relevant date as far as section 275(1)(c) was concerned. There was no explanation for the delay of nearly five years in the ACIT 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 275(1)(c) reads as under: 275. (1) No order imposing a penalty under this Chapter shall be passed (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. 8. In terms of the above provision, there are two distinct periods of limitation for passing a penalty order, and one that expires later will apply. One is the end of the financial year in which the quantum proceedings are completed in the first instance. In the present case, at the level of the Assessing Officer, the quantum proceedings was completed on December 28, 2007. Going by this date, the penalty order could not have been passed later than March 31, 2008. The second possible date is the expiry of six months from the month in which the penalty proceedings were initiated. With the Assessing Officer having initiated the penalty proceedings in December 2007, the last date by which the penalty order could have been passed is June 30, 2008. The later of the two dates is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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