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TMI Blog2025 (1) TMI 1237X X X X Extracts X X X X X X X X Extracts X X X X ..... a bit inarticulately .
Reliance of Revenue on TAM TAM PEDDA GURUVA REDDY [2006 (7) TMI 141 - KARNATAKA HIGH COURT] does not come to his aid since the same has been rendered largely fact-specific. Thus the questions of law framed to be answered in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... aches…? ii) When are the penalty proceedings u/s 271-D of the Act said to have been initiated…?" (In a way, the second question is inbuilt in the first). Both the sides have made their elaborate submissions and pressed into service certain Rulings in support of their rival contentions. 6. Having heard the learned counsel for the parties and having perused the Appeal papers as also the written submissions, we decline indulgence in the matter, for the following reasons: 6.1 Both the sides in all fairness agreed that the period of limitation within which the proceedings u/s 271-C of the 1961 Act that are to be completed is covered u/s 275 (1) (c) and therefore, the same is reproduced: "275.Bar of limitation for imposing penalties - (i) 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." Learned Panel Counsel submitted that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nning; start, and to initiate as meaning - to commence." In Om Prakash Jaiswal v. D.K. Mittal & Anr.: (2000) 3 SCC 171, the Supreme Court had considered the meaning of the expression 'initiate any proceedings for contempt' by referring to the dictionary meaning of the said word. It is relevant to refer to paragraph 10 of the said decision, which is set out below: The expression--"initiate any proceedings for contempt" is not defined in the Act. Words and Phrases (Permanent Edition) defines "initiate" to mean - an introductory step or action, a first move; beginning; start, and "to initiate" as meaning to commence. Black's Law Dictionary (6th Edn.) defines "initiate" to mean commence; start; originate; introduce; inchoate. In section 20, the word "initiate" qualifies "any proceedings for contempt". It is not the initiation of just any proceedings; the proceedings initiated have to be proceedings for contempt." The expression 'action for imposition of penalty is initiated' must, thus, clearly refers to the date on which the first introductory step for such action is taken, it must necessarily me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion?...However, we are inclined to agree with the submission made on behalf of the petitioner i.e., the assessee, and the reason for that is quite simple. If we were to accept the respondent/revenue's stand, then it could end up [as it has in this case] in a situation, where the revenue could decide the date when it could trigger a SCN to fulfil, as a mere formality, the principles of natural justice, which are engrafted under Section 274 of the Act. Section 274 of the Act, inter alia, mandates that no order imposing a penalty under the Chapter i.e., Chapter XXI shall be made unless the assessee has been heard, or has been given a reasonable opportunity of being heard." This decision adopts the doctrine of delay & laches as contradistinguished from any specific limitation period for initiating the Penalty Proceedings. 6.4 After all, law of limitation, in whichever statutes it be enacted, is of repose & peace, vide Dallas C.J. in TOLSON v. KAYE [Br. & Bp.223], It cannot be treated as a matter of technicality. It is a matter of State Policy that the potential or possibility of dispute/litigation in matters like this should not be kept alive beyond a particular point of time. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of other external manifestations of purpose. That is what the judge must seek and effectuate, and he ought not to be led off the trail by rests that have overtones of subjective design." 6.6. Acceding to the contention of the Revenue Parliament has prescribed the limitation period for accomplishing penalty proceedings and that no such period is prescribed for initiating them and therefore they can be initiated at any time, would defeat the very purpose of such a prescription. One cannot justifiably assume that the Parliament intended unfettered discretion to initiate such a proceeding at any point of time, ie., even after a decade or more. There is, in a system founded on the Rule of Law, nothing like absolute or unfettered discretion. The basic principles in this regard are explained by Prof. Sir William Wade [Administrative Law (9th Edn.) in the chapter entitled "Abuse of discretion"] as under: "The common theme of all the authorities so far mentioned is that the notion of absolute or unfettered discretion is rejected. Statutory power conferred for public purposes is conferred as it were upon trust, not absolutely--that is to say, it can validly be used only in the right and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Revenue on the Coordinate Bench decision in COMMISSIONER OF INCOME TAX vs. TAM TAM PEDDA GURUVA REDDY (2006) 287 ITR 72 (Kar) does not come to his aid since the same has been rendered largely fact-specific. The other decision namely GRIHALAKSHMI VISION vs. ADDITIONAL COMMISSIONER OF INCOME TAX (2015) 379 ITR 100 (Ker) at para 10 observed as under: "Question to be considered is whether proceedings for levy of penalty, are initiated with the passing of the order of assessment by the Assessing Officer or whether such proceedings have commenced with the issuance of the notice issued by the Joint Commissioner. From statutory provision, it is clear that the competent authority to levy penalty being the Joint Commissioner. Therefore, only the Joint Commissioner can initiate proceedings for levy of penalty…" These observations arguably support the view of Revenue, is true. However, we respectfully disagree with the said view. That apart, a perusal of the said judgment does not show that there was any reference made by the ITO to the competent authority, unlike in the case at hand. Further the following observations in para 10 in D M Manasvi vs Commissioner of Income Tax (197 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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