2014 (4) TMI 627

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..... ed by the assessee is directed against the order dated 9.12.2011 passed by the ld CIT(A)-30 Mumbai and it relates to the AY 2001-02. The assessee is questioning the validity of the penalty order passed u/s 271B of the Act. 2 The ld counsel for the assessee submitted that the penalty order passed by the AO u/s 271B of the Act is barred by limitation. He submitted that the AO issued notices two tim .....

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..... second notice i.e. 9.2.2004, the penalty order should have been passed on or before 31.8.2004. Since penalty order has been passed by the AO only in 2006, the ld AR submitted that it is barred by limitation. 3. On the contrary, the ld DR placed strong reliance on the order passed by the ld CIT(A). 4. We have heard the rival contention and carefully perused the records. In the instant case, the f .....

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..... uantum proceedings was passed on 8.3.2005, the penalty proceedings get revived after the receipt of appellate order of Ld CIT(A) in quantum proceedings. Accordingly, he has upheld the penalty order passed by the AO. 5. The limitation for imposing penalty is prescribed u/s 275 of the Act. Clause (a) and Clause (c) of sec. 275(1) of the Act which reads as under: 275(1) No order imposing a penalty u .....

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..... been initiated, are completed, or six months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later. In our considered view, the penalty proceeding u/s 271B is not arising out of assessment proceedings and it can be initiated independent of assessment proceedings. Hence, in our view, the applicable provision is only clause (c) of sec. 275 .....

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..... f the order of Ld CIT(A) passed in the quantukm proceedings. 5. Accordingly, we find merit in the contention of the assessee that it is barred by limitation. Accordingly, we set aside the order of the ld CIT(A) and direct the AO to delete the penalty order passed u/s 271B of the Act. 6 In the result, the appeal of the assesses is allowed. Order pronounced in the open court on 28th Feb 2014.
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