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2023 (8) TMI 820 - AT - Income TaxPenalty u/s. 271D and 271E - period of limitation - mandation to dispose/complete the proceedings within the limitation prescribed u/s. 275(1)(c) - HELD THAT:- We note that section 275 prescribes bar of limitation for imposing penalties. Sub-section (1) explains no order imposing a penalty under this chapter shall be passed. Clause (c) of sub-section (1) prescribes bar of limitation, “in any other case, 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”, which means, the Addl. CIT barred from initiating penalty proceedings after the expiry of the financial year in which assessment was completed. In the present case, the first para of the penalty order clearly shows the assessment was completed on 30-11-2007, thereby, the Addl. CIT cannot impose penalty after the financial year in which the assessment was completed i.e. the relevant financial year is F.Y. 2007 and end of such financial year is 31-03-2008, which means the Addl. CIT barred from imposing penalty after the end of financial year in which assessment was completed, i.e. admittedly after 31-03-2008. As it is evident from penalty order that the ACIT initiated penalty proceedings by issuing notice u/s. 274 r.w.s. 271D and 271E of the Act on 11-03-2010 and imposed penalty vide order dated 24-09-2010. It is clear from the above that the Addl. CIT initiated penalty proceedings on 11-03-2010 i.e. after the expiry of financial year in which the proceedings, in the course of which action for the imposition of penalty to be initiated, therefore, the very initiation is barred by limitation as the Addl. CIT did not initiate penalty proceedings in the course of assessment proceedings. Decided against revenue.
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