ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL-2, RAIPUR, NAWA RAIPUR vs. HARSHIT SINGHANIA BUILDCON, RAIPUR

ITA 560/RPR/2026Status: DisposedITAT Raipur14 October 2026AY 2022-2336 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(Appeals) was not justified in quashing the penalty order on the grounds of limitation. The Tribunal, referring to the decision of the Hon'ble Supreme Court in Armour Security (India) Ltd., clarified that "initiation of proceedings" occurs when the competent authority manifests its decision to proceed by issuing the statutory notice. The Tribunal found that the AO recorded satisfaction in the assessment order dated 31.03.2024, proposed penalty proceedings to the Joint CIT/Addl. CIT on 22.04.2024, the Joint CIT/Addl. CIT issued the penalty notice on 01.05.2024, and levied the penalty on 23.11.2024. These actions were considered well within reasonable time and in accordance with the law. The Tribunal distinguished the case laws relied upon by the assessee, particularly JKD Capital & Finlease Ltd. and M/s. Adma Solutions Pvt. Ltd., stating they were distinguishable on facts. The Tribunal applied the ratio laid down in JCIT Vs. Ganesh Agrawal and others (Karnataka High Court). Consequently, the finding of the Ld. CIT(A) that the penalty order was barred by limitation was reversed. The impugned order of the CIT(A) was set aside, and the case was remitted back to the Ld. CIT(A) for adjudicating all other grounds raised in Form-35, excluding the issue of limitation.

What were the facts?

The Revenue appealed an order of the CIT(Appeals) for Assessment Year 2022-23. The assessee, Harshit Singhania Buildcon, a real estate developer, filed its return declaring an income of Rs. 88,29,550/-. A search operation on January 6, 2023, led to the seizure of documents allegedly showing cash receipts of Rs. 1,11,85,299/- from sale of units, which the Assessing Officer (AO) treated as unexplained money under Section 69A and a violation of Section 269SS. The AO initiated penalty proceedings under Section 271D. The Additional CIT levied a penalty of Rs. 1,11,85,299/-. The CIT(Appeals) quashed the penalty order, holding it barred by limitation under Section 275(1)(c). The Revenue is challenging this decision.

What were the issues?

1. Whether the penalty order under Section 271D, levying a penalty of Rs. 1,11,85,299/-, was barred by limitation as prescribed under Section 275(1)(c) of the Income Tax Act, 1961. Assessee's Contention (as per CIT(A)'s order): The penalty order is barred by limitation as it was passed beyond the period prescribed under Section 275(1)(c). The assessee relied on judicial precedents like PCIT vs. Rishikesh Buildcon Pvt. Ltd. (Delhi High Court), PUT (CENTRAL -II), Delhi Vs Thapar Homes. Limited (Delhi High Court), and CIT, Udaipur vs. Shri Jitendra Singh Rathore (Rajasthan High Court), arguing that the date of recording satisfaction in the assessment order should be considered the date of initiation of penalty proceedings. Revenue's Contention (implied by the appeal and Tribunal's decision): The penalty order was passed within the prescribed time limits. The Revenue likely argued that the initiation of penalty proceedings should be reckoned from a later date, such as the issuance of the show-cause notice or the reference to the competent authority, or that the CIT(A) erred in applying the cited precedents.

Which sections of the Income-tax Act were involved?

Section 132,Section 69A,Section 269SS,Section 271D,Section 274,Section 275(1)(c),Section 143(3),Section 250(4),Section 250(6)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RAIPUR BENCH “DB”, RAIPUR

Before: SHRI PARTHA SARATHI CHAUDHURY & SHRI AVDHESH KUMAR MISHRA

For Appellant: Shri Veekaas S Sharma, CA
For Respondent: Shri Rituparna Namdeo, CIT-DR
Hearing: 17.09.2026Pronounced: 14.10.2026

PER PARTHA SARATHI CHAUDHURY, JM:

The present appeal preferred by the Revenue emanates from the order of the Ld.CIT(Appeals), Raipur-3, dated 16.04.2026 for the assessment year 2022-23 as per the grounds of appeal on record.

2.

Brief facts in this case are as follows: “The brief facts of the case are that the assessee is a partnership firm engaged in the business of real estate de

The order continues below.

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