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2014 (3) TMI 1201 - ITAT JAIPURPenalty u/s 271(1)(c) - Defective notice u/s 274 - manadation of obtaining prior approval - As per assessee AO has not obtained requisite prior approval of the Joint Commissioner before passing any order imposing penalty under Chapter XXI - HELD THAT:- In this case, the A.O. was mandatorily required to obtain prior approval for imposing penalty from the JCIT, but it has not been obtained from the JCIT. Therefore, the impugned penalty has been imposed in violation of the mandatory requirement of the Act. We cannot borrow the argument of the ld. D.R. that it does not matter if the prior approval has been obtained from the JCIT because approval has been obtained from the Additional CIT. The Hon'ble Apex Court while deciding the case of Brij Mohan [1979 (8) TMI 2 - SUPREME COURT] has held that the competence of jurisdiction of authority to initiate penalty proceedings could be governed only by law which was in force on the date of initiation of such proceedings. In this regard, the decision of the Hon'ble Apex Court in the case of Varkey Chacko [1993 (8) TMI 1 - SUPREME COURT] is also relevant. It does not make any difference if the assessee takes any legal issue in appeal before the Appellate Tribunal. Be that as it may, in this case, penalty has been imposed without obtaining prior approval of the JCIT, therefore, this penalty order is not a legal order in the eyes of law and is null and void. Therefore, we quash the penalty order in question. We have also satisfied ourselves that the provisions of sections 292B and 292BB would not cure the jurisdictional defect. However, the A.O. is at liberty to initiate penalty proceedings as per section 274 of the Act, but further subject to the limitation provisions of section 275 of the Act. We may clarify that the A.O. cannot calculate limitation from the date of this order but has to calculate it from the order of the Appellate Tribunal dated 19.10.2006. From that order, the imposition of penalty would have been barred. We allow this legal ground of the assessee’s appeal.
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