RAMASAMIGOUNDER PALANIAMMAL,SALEM vs. ITO, WARD 1(6), SALEM

ITA 2058/CHNY/2026Status: DisposedITAT Chennai28 September 2026AY 2017-184 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the penalty order passed under Section 271D of the Income-tax Act, 1961, was indeed barred by limitation. The notice under Section 274 read with Section 271D was issued on 04.01.2021. As per Section 275(1)(c) of the Act, the penalty order should have been passed within six months from the end of the month in which the notice was issued. Therefore, the due date for passing the penalty order was 31.07.2021. However, the penalty order was passed on 28.03.2022, which is significantly beyond the prescribed time limit. The Tribunal, relying on the decision in Kodiambaid Subrahmanya Rai (supra), found the penalty order to be invalid in law and quashed it. Consequently, the additional grounds raised by the assessee were allowed, and the order of the Ld. CIT(A) was set aside. The other grounds raised in Form 36 became academic.

What were the facts?

The assessee, Ramasami Gounder Palaniammal, filed an appeal against the order dated 17.02.2026 passed by the NFAC, Delhi for Assessment Year 2018-19. The assessee sought to raise additional grounds of appeal concerning the limitation period for a penalty order passed under Section 271D of the Income-tax Act, 1961. The assessee contended that the notice under Section 274 read with Section 271D was issued on 04.01.2021, and the penalty order was passed on 28.03.2022, which is beyond the prescribed limitation period. The Revenue did not object to the admission of these additional grounds.

What were the issues?

1. Whether the penalty order passed under Section 271D of the Income-tax Act, 1961, is barred by limitation, as per Section 275(1)(c) of the Act? (Question of law) Assessee's Contentions: - The notice under Section 274 read with Section 271D was issued on 04.01.2021, and the penalty order was passed on 28.03.2022. - Section 275(1)(c) prescribes that a penalty order must be passed within six months from the end of the month in which the notice initiating penalty proceedings was issued. - The order is clearly beyond the limitation period and should be annulled. - Relied on the decision in Kodiambaid Subrahmanya Rai v. Addl. CIT (Central Range) reported in 2026 (7) TMI 686. Revenue's Contentions: - The Ld. DR relied on the order of the Ld. Addl. CIT(A).

Which sections of the Income-tax Act were involved?

Section 271D,Section 274,Section 275(1)(c)

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Before: Shri Inturi Rama Rao & Shri S.S. Viswanethra Ravi

Hearing: 29.07.2026Pronounced: 28.09.2026

PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:

This appeal filed by the assessee is directed against the order dated 17.02.2026 passed by the Ld. Commissioner of Income Tax (Appeal), NFAC, Delhi for the assessment year 2018-19. 2. Ld. AR, Mr. T. Vasudevan, Advocate, drew our attention to the petition for additional grounds of appeal and submits that the assessee failed to raise grounds on the issue of limitation in Form 36 and seek

The order continues below.

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