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2022 (1) TMI 1202 - AT - Income TaxPenalty u/s. 271(1)(c) - Bar of limitation for imposing penalties - HELD THAT:- Proviso in section 275(1)(a) of the Act was inserted in the statute by the Finance Act 2003 w.e.f. 01.06.2003, meaning thereby, the same would be applicable for all penalties levied on or after 01.06.2003. In the instant case, the order of ld. CIT(A) in quantum proceedings was passed on 19.01.2010 and hence the maximum time limit for passing the penalty order would expire by 31.3.2011 in normal course and by 31.03.2012 in abnormal course of delay in receipt of order of ld. CIT(A) by the ld. AO. Hence either way, the penalty order passed on 30.08.2012 would be squarely barred by limitation. Decisions relied supra by the ld. DR are factually distinguishable as they were rendered for the Asst Years 2001-02 and 2000-01. Admittedly the law prevailing for the Asst Years 2000-01 and 2001-02 for levy of penalty would be governed by section 275(1)(a) of the Act, where the ld. AO could keep the penalty proceedings in abeyance till the order of tribunal was received. But due to insertion of proviso with effect from 01.06.2003, the ld. AO would be entitled to keep the penalty proceedings in abeyance only till the disposal of the first appeal by the ld. CIT(A). Hence the reliance placed on the decisions by the ld DR would not advance the case of the revenue. Accordingly, as rightly pointed out by the ld. AR before us, the time limit for passing the penalty order would expire by 31.03.2011 i.e one year from the end of the financial year in which the order of ld. CIT(A) is passed is received by the ld. Administrative Commissioner having jurisdiction over the assessee - we hold that the penalty order passed by the ld. AO on 30.08.2012 is squarely barred by limitation in view of proviso to section 275(1)(a) of the Act. Hence levy of penalty is hereby cancelled. - Decided in favour of assessee.
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