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2013 (11) TMI 174 - ITAT DELHIPeriod of limitation for passing the penalty order u/s 275(1)(a) of the Income Tax Act Held that:- A plain reading of this section shows that under section 275(1)(a), the requirement of the main section is that, when an assessment order is a subject matter of appeal before the Commissioner (Appeals), then the penalty order should be passed, within a period of six months from the end of the month in which the order of the Commissioner (Appeals) is received by the Chief Commissioner / Commissioner. The proviso to this section was inserted w.e.f. 1-06-2003, to expand this time period of six months to one year, in cases wherein the Commissioner (Appeals) passes an order on/after 1st June 2003 and no appeal is filed before the tribunal. The proviso does not deal with cases where the appeals are pending before the ITAT under section 253 of the Act. That limb of section 275(1)(a), which fixes the time limit of six months from the date of receipt of order of the ITAT by the Commissioner / Chief Commissioner, for passing an order of penalty is not disturbed in any manner by the insertion of the proviso as interpreted by the Honble Madras High Court in the case of Rayala Corpn. (P.) Ltd [2006 (4) TMI 96 - MADRAS High Court]. The facts of the present appeal in hand are that the assessment order was passed on 31.03.2003. The Commissioner of Income Tax(A) passed order on 31.03.2004 and ITAT passed order deciding the cross appeals in quantum proceedings on 8.8.2008 and finally, the penalty order was passed on 18.3.2009. As per provisions of Section 275(1)(a) of the Act, the crucial date is the date of receipt of the order of ITAT by the Chief Commissioner, Commissioner or the Assessing Officer because the same would decide the basis of calculation of limitation because for calculation of limitation, the month of receipt and its subsequent six months period is relevant Penalty order not barred by limitation. There is no dispute in this case that the petitioner has filed an appeal before the Tribunal and the same is pending. In such a case, the limitation period for the levy of penalty will be as provided for under s. 275(1)(a), i.e., six months from the end of the month in which the order of the Tribunal is received by the Chief CIT - Accordingly, this Court is of the view that the proviso to s. 275 (1)(a) of the Act, does not nullify the availability to the third respondent of the period of limitation of six months from the end of the month when the order of the Tribunal, Chennai, is received by the third respondent herein In view of the discussion, it has been held that penalty order was passed within the prescribed period of limitation Decided against the Assessee. Assessing Officer has recorded his satisfaction as required by the statute for initiation of penalty proceedings - Penalty proceedings in regard to the additions made pertaining to interest on SDF loan Held that:- Assessing Officer has made multiple additions by making disallowances and after conclusion of every issue and addition, he has specifically mentioned his satisfaction about initiation of penalty proceedings related to that issue and at the end of the order - But at the same time, in assessment order pertaining to the interest on SDF loan, there is nothing to show that the Assessing Officer has recorded his satisfaction as required by the statute for initiation of penalty proceedings Thus, relying upon the judgments in the cases Madhushree Gupta [2009 (7) TMI 38 - DELHI HIGH COURT ; Global Green Company Limited [2012 (10) TMI 120 - ITAT, DELHI], Budge Budge Co.Ltd [2005 (11) TMI 185 - ITAT CALCUTTA-E], in the present case, it is held that Assessing Officer has not recorded his satisfaction for initiation of penalty proceedings in regard to the additions made pertaining to interest on SDF loan at the end of relevant part of the order. Accordingly, the impugned order imposing penalty can not be sustained Decided in favor of Assessee.
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