TMI Blog1995 (7) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... ushila Devi is the wife of assessee's brother and Smt. Ganga Devi is the assessee's wife. Similarly, it was noticed that Smt. Sushila Devi was repaid Rs. 1,500 every month in cash aggregating to Rs. 18,000. Both these acts, namely, receiving of loans in cash and repayment thereof in cash were alleged to be in violation of the provisions of s. 269SS and 269T respectively. He, therefore, initiated penalty proceedings under ss. 271D and 271E. Several explanations were given and pleas made by the assessee, but the Assessing Officer remained unsatisfied and accordingly imposed a penalty of Rs., 19,870 under s. 271D and Rs. 18,000 under s. 271E. 3. Before the learned CIT(A) also, several pleas were made by the assessee. The levy of penalty was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. We, however, need not go into the aspect as to whether, even under the unamended provisions, the penalties were barred by limitation or not. Since the amended provisions of s. 275 are applicable, it needs to be examined as to whether under these provisions the penalties were time-barred or not. In order to determine the issue, the plea of the learned counsel that cl. (c) is applicable and not cl. (a) shall have to be examined first. Sec. 275(1)(a) reads as follows: "(1) No order imposing a penalty under this chapter shall be passed (a) In a case where the relevant assessment or other order is the subject-matter of an appeal to the Dy. CIT(A) or the CIT(A) under s. 246 or an appeal to the Appellate Tribunal under s. 253, aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k and avoiding hardship to assessee. Under the section as substituted, the time limit for making an order imposing a penalty under the provisions of Chapter XXI of the IT Act will, ordinarily, be two years from the end of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed. However, in a case where the relevant assessment or other order is the subject-matter of an appeal to the AAC or an appeal by the ITO to the Tribunal, the time-limit for completing the penalty proceedings will be either the two year period as stated above or a period of six months from the end of the month in which the order of the AAC or, as the case may be, of the Tribunal is received by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he 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." 10. From the above clause, it will be seen that the later part, that is, commencing from the words "or six months", envisages and takes care of the limitation period in those cases where penalty proceedings can be initiated independent of the assessment proceedings. The earlier part of cl. (c) is meant for those penalty proceedings which are initiated in the course of assessment or any other proceedings. Under both the situations it is contemplated that there wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 275(1). It was in the context of the old law as then prevailing that a view was taken that the penalty proceedings can be initiated only during the course of assessment proceedings and not thereafter. One of the decisions which persuaded the Ahmedabad Bench of the Tribunal to accept this contention was the decision of the Delhi High Court in Rajinder Kumar Somani's case. At this stage, it would be necessary also to refer to the argument of the learned senior Departmental Representative to the effect that the changed position of law, more particularly that contained in s. 275 does not preclude the Revenue authorities from initiating penalty proceedings even after completion of assessment proceedings or independently of the assessment procee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ins and, therefore, the view accepted by the Hon'ble Delhi High Court cannot operate in the case before us. Since the period of limitation prescribed in the present case commences from the end of the month in which action for imposition of penalty is initiated, reference to the assessment proceedings is totally unnecessary and, therefore, there cannot be any implicit bar to the initiation of penalty proceedings after the completion of the assessment proceedings or independently of them." 11. Applying the above provisions of law to the facts of the present case, it is observed and undisputed that penalty proceedings were initiated on 25th June, 1992. The period of limitation shall be six months from the end of the month in which penalty pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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