Interpreting 'Initiation' of Penalty Action u/s 275(1)(c): Period of Limitation

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... stion was whether the penalty proceedings u/s 271C of the Income Tax Act were barred by the period of limitation. Specifically, the issue was when the penalty proceedings were initiated - on the date the Assessing Officer made a reference to the Joint Commissioner of Income Tax (JCIT) or on the later date when the JCIT issued a show cause notice to the assessee. Arguments Presented The assessee co .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... cause notice is issued later. The Court examined the ordinary meaning of the word 'initiate' from dictionaries and previous judgments. It concluded that 'initiate' means to make the first introductory step or commence an action. Applying this to the facts, the Court held that the Assessing Officer's reference to the JCIT on 25.09.2014 was the first step initiating the penalty p .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X

..... roceedings after identifying a default. The ruling clarifies the interpretation of the phrase 'action for imposition of penalty is initiated' in Section 275(1)(c) . It endorses a broad purposive interpretation rather than a narrow technical one. This evolution of doctrine protects assessees from open-ended limitation periods and ensures certainty in tax proceedings. Full Text : 2024 (11) T .....

X X   X X   Extracts   X X   X X

→ Full Text of the Document

X X   X X   Extracts   X X   X X