TMI Blog2016 (5) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 30th April, 2015 would not be influenced by any observation or finding given in his order dated 8th December, 2014 but he will decide the appeal afresh uninfluenced by any observation/finding in his order dated 8th December, 2014 Levy of penalty imposed u/s 271C - period of limitation - Held that:- As per clause (c) of Section 275(1), the penalty proceedings were initiated in the course of order u/s 201(1) and 201(1A) dated 27th June, 2008 and the relevant financial year would expire on 31st March, 2009. Six months from the end of the month in which penalty proceedings were initiated would expire on 31st December, 2008. Therefore, the competent authority could have imposed the penalty before the expiry of 31st March, 2009. However, the penalty order has been passed on 2nd March, 2010 which is clearly barred by limitation. We, therefore, respectfully following the decision of Hon'ble Jurisdictional High Court in the case of JKD Capital & Finlease Ltd. (2015 (10) TMI 1281 - DELHI HIGH COURT ) hold that the penalty order passed u/s 271C was barred by limitation - ITA Nos. 1897/Del/2012, 1978/Del/2012 & 1979/Del/2012, ITA Nos.827/Del/2015, 828/Del/2015 & 829/Del/2015 - - - Date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re, unless those observations are set aside, they will prejudice the case of the assessee while disposing of the assessee s appeal against the subsequent order u/s 154. 6. We have considered the rival submissions and have perused the material placed before us. The sequence of events is that the Assessing Officer passed order u/s 201(1)/201(1A) for FY 2005-06, 2006-07 and 2007-08 i.e., relevant to assessment years 2006-07, 2007-08 and 2008-09. The assessee filed the application u/s 154 for all the three years which was rejected by the Assessing Officer vide order dated 30th March, 2013. The assessee has filed the appeals before learned CIT(A) in all these three years and the same were dismissed by him vide order dated 8th December, 2014. The assessee has filed appeals before the ITAT which are listed above for disposal vide ITA Nos.827/Del/2015, 828/Del/2015 829/Del/2015. In the meanwhile, the assessee filed subsequent application u/s 154 and the Assessing Officer, vide his order dated 30th April, 2015, rectified the order passed u/s 201(1)/201(1A) dated 26th June, 2008. As per assessee s contention, in this order u/s 154, the Assessing Officer only partially accepted the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,99,016/- 2007-08 ₹ 94,49,969/- 2008-09 ₹ 35,172/- 9. At the time of hearing before us, it is contended by the learned counsel that the penalty order passed by the Assessing Officer is barred by limitation. Since the facts and the date of order for all the three years are common, we shall consider the order for assessment year 2006-07 which would be applicable to all the three years. He pointed out that the Assessing Officer passed the order u/s 201(1A) on 20th June, 2008 during which, penalty proceedings u/s 271C were initiated. However, penalty order was passed on 2nd March, 2010 which is barred by limitation as per Section 275(1)(c). In support of his contention, he relied upon the following decisions:- (i) CIT Vs. Dinesh Jain ITA No.751/2014, order dated 27th April, 2015 (Delhi High Court). (ii) ITO Vs. Dinesh Jain [2014] 34 ITR (Trib) 709 (Delhi). (iii) Pr. Commissioner of Income Tax-5 Vs. JKD Capital Finlease Ltd. ITA No.780/2015, order dated 13th October, 2015 (Delhi High Court). 10. Learned DR, on the other hand, stated that the relevant date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 264], after the expiry of six months from the end of the month in which such order of revision is passed; (c) 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, or six months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later.]. 12. Admittedly, in the case of the assessee, clause (c) of sub-section (1) would be applicable because the relevant order u/s 201(1)/201(1A) was not the subject matter of appeal to the CIT(A) and similarly, the same was not the subject matter of revision u/s 263. As per clause (c) of sub-section (1), the penalty order cannot be passed after the (i) expiry of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed and (ii) six months from the end of the month in which action for imposition of penalty is initiated whichever period expires later. Therefore, the crucial date would be the date of the initiation of penalty proceedings. In the order u/s 201(1) and 201(1A) dated 27 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 39;ble Jurisdictional High Court held as under:- 11. In fact, when the AO recommended the initiation of penalty proceedings the AO appeared to be conscious of the fact that he did not have the power to issue notice as far as the penalty proceedings under section 271-E was concerned. He, therefore, referred the matter concerning penalty proceedings under Section 271-E to the Additional CIT. For some reason, the Additional CIT did not issue a show cause notice to the assessee under Section 271-E(1) till 20th March 2012. There is no explanation whatsoever for the delay of nearly five years after the assessment order in the Additional CIT issuing notice under Section 271-E of the Act. The Additional CIT ought to have been conscious of the limitation under Section 275(1)(c), i.e., that no order of penalty could have been passed under Section 271-E after the expiry of the financial year in which the quantum proceedings were completed or beyond six months after the month in which they were initiated, whichever was later. In a case where the proceedings stood initiated with the order passed by the AO, by delaying the issuance of the notice under Section 271-E beyond 30th June 2008, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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