9911796707
TMI Blog2025 (1) TMI 1496X X X X Extracts X X X X X X X X Extracts X X X X ..... urse of which the decision was taken to initiate the penalty proceedings, were completed. There is merit in the petitioner's contention that the date of initiation of the penalty proceedings cannot be extended arbitrarily and indefinitely. Clearly in cases where there is an inordinate delay in initiation of the proceedings, it would be necessary to examine whether the period of limitation would stand extended on account of such delay. As settled law that in cases where no limitation period is mentioned for acts to be done, the same are required to be done within a reasonable period. See State of Punjab & Ors. vs. Bhatinda District Cooperative Milk Producers Union Ltd. [2007 (10) TMI 300 - SUPREME COURT] Thus, in cases where the initiation of the penalty proceedings are inordinately and inexplicably delayed beyond a reasonable period, the said issue may rise for consideration. In the present case no such issue arises for consideration of this court as the penalty proceedings were initiated within a period of eleven days of the culmination of the assessment proceedings whereas the decision to make a reference for initiation of the penalty proceedings was taken. We are unable to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings U/s 271AAB (1A) (b) of the IT Act, 1961, is being initiated separately on the above issue for undisclosed income. 14.18 Further, I am satisfied that this is a fit case for initiation of penalty proceedings u/s 271AAD (1) (ii) of the Act, and hence, penalty proceedings u/s 271AAD (1) (i) & (ii) of the Act are being initiated separately in this case for false entry as well as omission of entry in the books of accounts which is relevant for computation of total income of the assessee. 14.19 Further, separate reference is being sent to the office of Addl. CIT-Central Range-04, Delhi for initiation of penalty proceedings U/s 269ST of the IT Act, 1961, in this case on the issue of cash receipts by the assessee." 6. Accordingly, the AO made a reference to the Additional Commissioner of Income Tax on 08.04.2024 for initiation of penalty proceedings under Section 269ST of the Act, read with 271DA of the Act. A copy of the said reference letter dated was handed over to the court during the course of proceedings by the learned counsel for the Revenue. The same is set out below. "OFFICE OF THE DY. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-15, NEW DELHI Room No. 245, ARA C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty under Section 271DA of the Act not be passed. 9. Thereafter, on 17.10.2024, the concerned authority passed the impugned order. 10. The limited question which falls for consideration of this court is whether the impugned order is beyond the period of limitation as prescribed in 275 (1) (c) of the Act. The said provision is set out below: 275. Bar of Limitation for imposing penalties. - (1) No order imposing a penalty under this Chapter shall be passed- (a) *** (b) *** (c) in any other case, after the expiry of 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. 11. In our view, the controversy sought to be raised is no longer res integra and is squarely covered by the decisions of this court in Principal Commissioner of Income Tax v. JKD Capital & Finlease Ltd.: 2015 SCC OnLine Del 14476 and Commissioner of Income Tax (TDS)-2 Delhi v. Turner General Entertainment Networks India Pvt. Ltd: 2024 SCC OnLine Del 7760. The said question is also covered in the petit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uctory step for such action is taken, it must necessarily mean the start of such action. It must mean the commencement of action for imposition of penalty. As noted above, the AO had found that it was the admitted case that the assessee had defaulted in deduction of TDS, which it was obliged to do. It had, accordingly, made a reference to the learned JCIT. This was obviously for the purposes of imposition of penalty. The reference, thus, clearly marked the first step for initiation of action for imposition of penalty. The Show Cause Notice issued subsequently was to provide the assessee an opportunity to show cause why penalty not be imposed. 20. In the given context, this was in the beginning of the action for imposition of penalty. The same had commenced earlier with the AO determining that there was a cause for such imposition." 13. The learned counsel appearing for the petitioner submits that the date for initiation of penalty must be considered as the date on which the assessment order was passed. He submits that the decision to initiate the proceedings under Section 269ST of the Act has been taken by the AO at the time of passing of the assessment order and the same is als ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f limitation, as prescribed under Section 275 (1)(c) of the Act. 23. We are clearly of the view that the notice issued by the JCIT on 13.06.2011 could not have extended the period of limitation, as prescribed under Section 275 (1) (c) of the Act. 24. In this case, what is required to be brought to the forefront is that the AO had taken prior approval of the ACIT, who is equal in rank to the JCIT, before triggering the penalty proceedings. Thus, although the decision to initiate penalty proceedings is found embedded in the assessment order dated 31.12.2010 and approval to frame the assessment order was given prior to the said date, the notice was issued only on 13.06.2011. 25. Even though this may be an additional factor in this particular case, our reasons for holding the limitation period as prescribed under Section 275 (1) (c) of the Act had expired latest by 30.06.2011, is not confined only to this aspect of the matter. The appellant/revenue, as noticed above, cannot extend the period of limitation by deciding at its whim and fancy when the notice has to be issued. The notice under Section 274 should have been issued before the period of limitation, as discussed above." 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Clearly in cases where there is an inordinate delay in initiation of the proceedings, it would be necessary to examine whether the period of limitation would stand extended on account of such delay. It is settled law that in cases where no limitation period is mentioned for acts to be done, the same are required to be done within a reasonable period. (See State of Punjab & Ors. vs. Bhatinda District Cooperative Milk Producers Union Ltd.: (2007) 11 SCC 363). 19. Thus, in cases where the initiation of the penalty proceedings are inordinately and inexplicably delayed beyond a reasonable period, the said issue may rise for consideration. However, in the present case no such issue arises for consideration of this court as the penalty proceedings were initiated within a period of eleven days of the culmination of the assessment proceedings whereas the decision to make a reference for initiation of the penalty proceedings was taken. We are unable to accept that this period can be termed as unreasonable. 20. In view of the above, we do not find any merit in the present petition. The same is accordingly dismissed. 21. The petitioner has also filed an appeal against the impugned order. W ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
