9911796707
TMI Blog2025 (1) TMI 1496X X X X Extracts X X X X X X X X Extracts X X X X ..... uted on 20.12.2017 and at the material time was engaged in a business of acting as real estate brokers. It is stated that the petitioner had acted for various real estate companies including Gaursons Group of Companies (hereafter the Gaursons Group). 3. On 02.03.2022, a search was conducted under Section 132 of the Income Tax Act, 1961 (hereafter the Act) in the premises of the entities comprising the Gaursons Group and other related persons. Simultaneously, a search was also conducted in the premises of the petitioner as well as in the premises of its constituted partners. 4. The petitioner filed his return for the relevant assessment year (AY) 2022-23 after the search was conducted. The said return was taken up for scrutiny and the proceedings culminated in an assessment order dated 28.03.2024. The net profit of the assessee was determined at Rs. 22,29,92,302/- against a returned income of Rs. 9,77,91,650/-. In addition, the Assessing Officer (AO) also decided that the penalty proceedings be initiated in respect of the cash allegedly received by the petitioner. 5. Paragraph 14.17, 14.18 and 14.19 of the assessment order are relevant and are set out below: "14.17 Further, I a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovided for the kind reference. Further, relevant part of seized material that has been relied upon in the case of the assessee is being provided in the soft copy in a pendrive. 4. Since the amount of cash received is more than Rs. 2,00,000/- in respect of transaction relating to one event, therefore, information is being shared with your office for initiation of penalty u/s 269ST r.w.s 271DA in the above case. 5. Submitted for necessary action at your end. Yours faithfully, Sd/- (Mohit Garg) Dy. Commissioner of Income Tax, Central Circle-15, New Delhi" 7. Respondent no.3 did not take any immediate steps on receipt of the said reference. However, on 09.09.2024 the concerned authority issued a notice under Section 274 read with Section 271DA of the Act calling upon the petitioner to show cause why penalty not be imposed under Section 271DA of the Act. Additionally, the petitioner was also called upon to appear before the concerned officer personally or through duly authorized representative, on 19.09.2024. 8. The said show cause notice was followed by another notice dated 27.09.2024 once again calling upon the petitioner to appear before the concerned officer personall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke a beginning of: perform or facilitate the first actions, steps, or stages of:" 17. The Words and Phrases (Permanent Edition) defines 'initiate' to mean: "an introductory step or action, a first move; beginning; start, and to initiate as meaning - to commence." 18. In Om Prakash Jaiswal v. D.K. Mittal & Anr.: (2000) 3 SCC 171, the Supreme Court had considered the meaning of the expression 'initiate any proceedings for contempt' by referring to the dictionary meaning of the said word. It is relevant to refer to paragraph 10 of the said decision, which is set out below: "10. The expression-"initiate any proceedings for contempt" is not defined in the Act. Words and Phrases (Permanent Edition) defines "initiate" to mean - an introductory step or action, a first move; beginning; start, and "to initiate" as meaning to commence. Black's Law Dictionary (6th Edn.) defines "initiate" to mean commence; start; originate; introduce; inchoate. In section 20, the word "initiate" qualifies "any proceedings for contempt". It is not the initiation of just any proceedings; the proceedings initiated have to be proceedings for contempt." 19. The expression 'action for imposition of pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 1 of the said section shall be imposed by the Joint Commissioner. 19. It is based on the language of sub-section 2 of section 271E that Mr. Kumar argues that the AO could not have triggered the penalty proceedings and hence, the limitation would commence, as prescribed, only from the date when the JCIT issued the notice. 20. Therefore, based on this line of argument, Mr. Kumar says that the limitation in this case expired only on 31.12.2011, and since the penalty order was passed on 30.12.2011, it was within the prescribed period of limitation, as being the latter of the two dates, as indicated in Section 275 (1) (c) of the Act. 21. In our view, this argument, if accepted, would lead to absurdity, the reason being that once the appellant/revenue decides to trigger penalty proceedings against the respondent/assessee, it is incumbent upon them to keep an eye on the limitation period prescribed under Section 275 (1)(c) of the Act. 22. If the limitation period is connected to when the concerned officer issues notice, then the appellant/revenue can extend the period of limitation, way beyond the timeline prescribed in Section 275 (1)(c). 23. We are clearly of the view th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... completed; or (b) six months from the end of the month in which action for imposition of penalty is initiated, whichever expires later. 17. Undoubtedly in the present case, the proceedings during the course of which decision for that proceedings for levy of penalty under Section 269ST of the Act should be initiated, had taken place during the financial year 2023-24 as it is reflected in the assessment order dated 28.03.2024. However, the assessment order clearly reflects that the penalty proceedings are being initiated separately. The order records that "separate reference is being sent to the office of Addl. CIT-Central Range-04, Delhi for initiation of penalty proceedings U/s 269ST of the IT Act, 1961". The AO has done so by making a reference on 08.04.2024. Thus, clearly the period of six months is required to be reckoned from the date of the reference, that is, from 08.04.2024 as that is the period which expires later than the end of the financial year in which the proceedings, during the course of which the decision was taken to initiate the penalty proceedings, were completed. 18. Having stated the above, there is merit in the petitioner's contention that the date of init ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
