TMI Blog2023 (8) TMI 387X X X X Extracts X X X X X X X X Extracts X X X X ..... islative gap in the provision works to the disadvantage of the assessee, as often, the AO takes his own sweet time in making a proposal for the initiation of penalty proceedings. In this case, as noticed above, more than 11 years have passed since the time the assessment order was passed, and if the date of filing of the return is taken into account, there is a yawning 14 years of time gap. A careful perusal of the second limb would show that the legislature has provided a limitation of six months, from the end of the month in which the action for imposition of penalty is initiated. Even according to revenue the first limb of Section 275(1)(c) is not applicable. Therefore if the dates and events, (which obtain in the matter and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eptions. ITA 408/2023 2. This appeal concerns Assessment Year (AY) 2005-06. 3. Via this appeal, the appellant/revenue seeks to assail the order of the Income Tax Appellate Tribunal [in short, Tribunal ] dated 17.01.2023. 4. The broad facts, which are required to be noticed in order to adjudicate the instant appeal, are the following: 4.1 On 30.10.2004, the respondent/assessee had filed its return of income (ROI), declaring a loss amounting to Rs. 439,67,64,096/-. 4.2 The respondent/assessee s case was selected for scrutiny, and ultimately, an order dated 17.12.2008 was passed under Section 143(3) of the Income Tax Act, 1961 [in short, Act ]. 4.3 The Assessing Officer (AO) scaled down the loss declared by the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, apart from anything else, the issue raised in the present appeal stands covered by the judgment of a coordinate Bench of this court rendered in Clix Capital Services Pvt. Ltd. vs. DCIT, 2023/DHC/001703 1 . 9. The sum of the ratio of the said decision is that penalty ought to be levied within a reasonable timeframe. This attains criticality, as Section 275(1)(c) of the Act does not fix a date for the commencement of the period of limitation. This legislative gap in the provision works to the disadvantage of the assessee, as often, the AO takes his own sweet time in making a proposal for the initiation of penalty proceedings. 9.1 In this case, as noticed above, more than 11 years have passed since the time the assessment order wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner (Appeals) under section 246 or section 246A and the Commissioner (Appeals) passes the order on or after the 1st day of June, 2003 disposing of such appeal, an order imposing penalty shall be passed before the expiry of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed, or within one year from the end of the financial year in which the order of the Commissioner (Appeals) is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, whichever is later; (b) in a case where the relevant assessment or other order is the subject matter of revision under section 263 or section 264, after the expiry of si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ope to the AO to trigger the penalty proceedings at the date of his choosing, as is palpably evident in this case. 15.2 The word used in the provision is initiated which according to us, is an act which would get triggered on the date when the proposal is made. This rationale ties in with our view, as noted hereinabove, that penalty proceedings should be initiated within a reasonable period. 16. We are, thus, not in agreement with the submission made by Mr Rai. 17. Accordingly, the appeal is closed, since no substantial question of law arises for consideration. ---------------------- Notes: 1. 17.2 It is apparent, that while a timeframe has been provided for the conclusion of penalty proceedings on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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