TMI Blog2014 (3) TMI 573X X X X Extracts X X X X X X X X Extracts X X X X ..... has been made – there is no reason to interfere with the order of the CIT(A) deleting penalty – Relying upon COMMISSIONER OF INCOME TAX Versus AERO TRADERS (P) LTD. [2010 (1) TMI 32 - DELHI HIGH COURT] - every addition will not automatically attract penalty – thus, penalty is not leviable on estimated income. - Decided against the revenue. Bar of limitation of time u/s 275 of the Act – Time-barred penalty orders – Held that:- The ITAT had passed the order on 26/03/2009 while the AO has given effect to the ITAT’s order on 31/12/2010 and the penalty order is passed on 29/06/2011 i.e. within six months from the date of the order giving effect to the ITAT’s order - the date of receipt of ITAT’s order by CCIT or CIT is not on record – thus, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the assessment years. The assessee preferred appeals before the CIT(A) and thereafter before the ITAT and all the additions were deleted except one of the additions made in respect of difference in cost of construction for all the assessment years. The addition was, however, partly confirmed by the ITAT. 4. In the meantime, the AO had initiated penalty proceedings u/s 271(1)(c) of the Act by issuance of a notice u/s 274 read with section 271(1)(c) on 31/12/2010. The assessee furnished his reply on 17/06/2011 stating that for levy of penalty there should be income assessed and further such income should be held to be concealed income or should be held that the assessee furnished inaccurate particulars of such income. The AO after con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of any material found and seized during the course of search. Thus, penalty for all the assessment years has been deleted. 7. Aggrieved by the relief given by the CIT(A), the revenue is in appeal before us while the assessee is in cross objections against the order of CIT(A) in not considering the assessee s objections about limitation period in passing the orders. 8. As the issue of limitation goes to the root of the matter, we deem it fit and proper to dispose of the cross objections first. The assessee has filed a synopsis of the sequence of events following the date of search on 07/10/2004. The said synopsis is reproduced hereunder: Date Description 07/10/2004 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T(A) is dated 13/03/2008 and the AO initiated penalty proceedings by issuance of show cause notice in February, 2009 and the assessee filed his explanation on 16/03/2009. He submitted that pursuant to the said notice, no penalty order has been passed and, therefore, it is deemed to have been dropped. According to the learned counsel for the assessee, penalty was initiated on the offering of additional income in the return filed subsequent to search and also on the additions made on account of difference in the cost of construction. He submitted that consequent to the order of CIT(A) in the quantum proceedings, penalty proceedings u/s 271(1)(c) on account of offering of additional income should have been passed within 6 months from the date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... een made. Therefore, we do not see any reason to interfere with the order of the CIT(A) deleting penalty. As held by the Courts in a Catena of cases, every addition will not automatically attract penalty and further as held by the Hon ble Delhi High Court in the case of CIT Vs. Aero Traders (P) Ltd., 322 ITR 316, penalty is not leviable on estimated income. 9.2 With regard to period of limitation in passing the penalty order pursuant to ITAT orders, we find that it is to be considered sub-section (1A) of section 275. According to the said provision, the AO ought to have levied penalty within the six months from the date of receipt of order of ITAT by the CCIT or CIT. As seen from the synopsis of dates, the ITAT had passed the order on 26 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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