9911796707
TMI Blog2025 (1) TMI 908X X X X Extracts X X X X X X X X Extracts X X X X ..... inafter referred as 'Ld. AO') under section 271C of the Income Tax Act, 1961 [hereinafter referred to as "the Act"] for the Assessment Year 2010- 11. 2. Brief facts of case are that the assessment for F.Y. 2009-10 was completed under section 143(3) of the Act at a loss of Rs. 41,70,19,670/- on 20.03.2013 and penalty proceedings were initiated under section 271C(1)(a) of the Act for non compliance of provisions of section 192(1) of the Act. Show-cause notice dated 01.03.2016 was issued. Later on, show-cause notice was also sent on 15.06.2016. In response to notices, no one attended the proceedings. A final show-cause notice with final opportunity was issued on 04.07.2016. No one attended the proceedings. Penalty order dated 14.07.2016 was p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Penalty @10% was levied. Learned CIT(A) set aside the penalty order. No liability of assessee of TDS deduction on the additions made by the learned AO in order under section 143(3) of the Act. Five additions made by the AO i.e. payment to relatives of directors Rs. 7.80 lakhs, unreasonable payments to director Rs. 33.10 lakh, Rs. 4 crores on capital asset issue, Rs. 36.66 crores on agriculture land sale and Rs. 6.5 lakhs u/s 35D of the Act. It is not clear as to why the penalty has been levied. Penalty order dated 14.07.2016 was time barred as per section 275(1)(c) of the Act. Assessment proceedings were completed on 20.03.2013 [i.e. order under section 143(3)] and in the same order penalty proceedings were also initiated. Learned AO intim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Mahesh Wood Products (P.) Limited's case (supra) provides "However, this question came up for consideration in JKD Capital & Finlease Ltd. (supra). The date on which the AO recommended the initiation of penalty proceedings was taken to be the relevant date as far as Section 275(1)(c) was concerned. There was no explanation for the delay of nearly five years in the ACIT acting on the said recommendation. The Court held that the starting point would be the 'initiation' of penalty proceedings. Given the scheme of Section 275(1)(c) it would be the date on which the AO wrote a letter to the ACIT recommending the issuance of the SCN. While it is true that the ACIT had the discretion whether or not to issue the SCN, if he did decide to iss ..... X X X X Extracts X X X X X X X X Extracts X X X X
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