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Income Tax Appellate Tribunal, DELHI BENCH: ‘G’ NEW DELHI
Before: SHRI SAKTIJIT DEY & DR. B.R.R. KUMAR
This is an appeal by the Revenue against order dated 11.10.2017 of learned Commissioner of Income Tax (Appeals)-24, New Delhi, deleting penalty imposed under section 271(1)(c) of the Income-tax Act, 1961 (for short ‘the Act’) for an amount of Rs.69,97,034/-pertaining to assessment year 2008-09.
Briefly the facts are, the assessee is a resident company.
Assessment in case of the assessee was completed under section 143(3) of the Act vide order dated 31.12.2010 assessing the income of Rs.26,06,69,904/-. Against the assessment order so passed, assessee preferred appeal before learned Commissioner (Appeals). While disposing of the appeal, learned Commissioner (Appeals) granted partial relief to the assessee by allowing expenditure of Rs.2,48,640/- being payment made to Mrs. Natasha Kohli. Further, learned Commissioner (Appeals) also deleted the addition of Rs.2,03,36,927/-, being the commission on sale. However, while deciding Revenue’s appeal, the Tribunal restored both the additions.
After giving effect to the order of the Tribunal, the Assessing Officer initiated proceeding for imposition of penalty under section 271(1)(c) of the Act based on the additions restored by the Tribunal, and ultimately levied penalty of Rs.69,97,034/-. The assessee challenged the imposition of penalty, inter alia, on the ground that the penalty order passed by the Assessing Officer is barred by limitation. While examining the issue in appeal, learned Commissioner (Appeals) found that the basis of imposition of penalty is, the order passed by the Tribunal restoring the additions deleted by the first appellate authority. He further found that the order passed by the Tribunal on 16.10.2015 was received by the concerned Commissioner of Income Tax on 11.12.2015. Thus, according to him, in terms of section 275(1)(a) of the Act, the Assessing Officer had six months’ time from the end of the month in which the Tribunal’s order was received by learned Commissioner of Income Tax to pass an order imposing penalty. Whereas, the Assessing Officer has passed the order on 29.09.2016. Thus, he held that the penalty order passed is barred by limitation. Of course, on merits also, he decided the issue in favour of the assessee by holding that penalty cannot be imposed on a debatable issue.
We have considered rival submissions and perused the materials on record. There is no dispute to the fact that the additions, based on which, the Assessing Officer initiated proceeding for imposition of penalty under section 271(1)(c) of the Act and ultimately imposed penalty were as a result of order dated 16.10.2015 passed by the Tribunal restoring couple of additions deleted by learned Commissioner (Appeals). It is also a fact on record that the order passed by the Tribunal was received by the concerned Commissioner of Income Tax on 11.12.2015. As
per section 275(1)(a) of the Act, in a case, where the assessment order is subject matter of appeal proceeding, no order imposing penalty can be passed after expiry of the financial year in which the proceeding, in course of which action of the proceeding was initiated, are completed, or six months from the end of the month in which the order of the appellate authority was received by the Commissioner of Income Tax, whichever period expires later. In the facts of the present appeal, the order imposing penalty obviously has been passed beyond the period prescribed under section 275(1)(a) of the Act. The aforesaid factual position could not be controverted by learned Departmental Representative. In view of the aforesaid, we do not find any reason to interfere with the decision of learned Commissioner (Appeals) in deleting the penalty.
In the result, the appeal is dismissed.
Order pronounced in the open court on 16th March, 2022