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2019 (8) TMI 499 - AT - Income TaxPenalty u/s. 271E - repayment of loan given in cash in violation of provision of Sec.269-T - period of limitation - HELD THAT:- There is no dispute that the period of limitation is required to be examined in the light of the provisions of Section 275(1)(c). The issue in the present case is as to, what is the starting point of time u/s.275(1)(c) in the present case. As far as applicability of the first part of sec.275(1)(c) is concerned, the same is with regard to “after the 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.” In the present case, at the level of the AO, the quantum proceedings was completed on 24.3.2016. Going by this date, the penalty order could not have been passed later than 30.9.2016. Considering that the subject matter of the quantum proceedings was the non-compliance with Section 269T, there was no need for the appeal against the said order in the quantum proceedings to be disposed of before the penalty proceedings could be initiated. In other words, the initiation of penalty proceedings did not hinge on the completion of the appellate quantum proceedings. Therefore, it is futile to contend that the date of initiation of proceedings is the date on which the JCIT receives intimation from the AO or the date on which the JCIT issues show cause notice to the Assessee u/s.271-E . In that view of the matter, we hold that the AO having initiated the penalty proceedings on 24.3.2016, the last date by which the penalty order could have been passed is 30th September 2016. Thus, later of the two dates is 30th September, 2016 in the present case. With the AO having initiated the penalty proceedings in his order of assessment dated 24.3.2016, the last date by which the penalty order could have been passed is 30th September, 2016. The penalty order was passed only on 27.1.2017. Therefore the same is barred by time. The order imposing penalty is therefore held to be bad in law and is hereby cancelled. Since the order is held to be bad and cancelled on the ground of limitation, we are not going into the existence of reasonable cause which will exonerate the Assessee from imposition of penalty u/s.273B
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