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2022 (10) TMI 608 - ITAT MUMBAIPenalty proceedings u/s 271D and 271E - Period of limitation - transaction between sister concern - As submitted notice under section 274 read with section 271D of the Act stating that assessee has violated provisions of section 269SS of the Act therefore, from this date the action for imposition of penalty were initiated - HELD THAT:- Hon'ble Delhi High Court in case of Pr. Commissioner of Income-tax Vs. Mahesh Wood Products (P.) Ltd.[2017 (5) TMI 433 - DELHI HIGH COURT] has held that limitation for levy of penalty under section 271D and 271E of the Act would begin to run from the date on which The learned Assessing Officer wrote a letter to the Addl Commissioner income-tax recommending issue of show cause notice for initiating penalty proceedings. Hon'ble Delhi High Court following its own decision in Pr. CIT vs. JKD and finlease Ltd [2015 (10) TMI 1281 - DELHI HIGH COURT] has held that the orders passed under section 271D and 271E of the Act would be barred by limitation if they were passed beyond six months from the end of the month in which the learned Assessing Officer informed the learned Addl. CIT about the offence and to show cause the notice under section 274 of the Act. Apparently in this case, the first notice was issued on 15.12.2013 and second notice was issued on 16.01.2014 are identical. Therefore, from the date of notice dated 15.12.2013, the penalty order should have been passed on or before 30th June 2004 but were passed on 30th July 2014. Therefore, both the orders of the penalty are barred by limitation. In this case, ld. Adjudicating authority once again issued the same notice for the same offence being show cause notice for levy of penalty u/s 271D and 271E of the act on 16/1/2014. Claim of revenue is that the last notice [ second notice] issued by the ld. Adjudicating authority should be considered for computing outer time limit for passing penalty orders. If the subsequent notices issued by the ld. Adjudicating authorities on 16/01/2014 are taken for computing time limit, the ld. Adjudicating authority would always be in a positing extend the above time limit for issuing a fresh notice for the same offence and it would not be in consonance of letter and spirit of the law. Therefore, same is rejected. Thus owing the decision of JKD Fin lease services limited [SUPRA] we hold that both the penalty orders passed on 30/7/2014 are barred by limitation of time and therefore quashed. Appeal of assessee allowed.
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