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Facts
The assessee filed appeals against orders confirming penalties imposed under Section 271(1)(c) for multiple assessment years. There were delays in filing these appeals, which the Tribunal condoned. The penalty proceedings were initiated following a revised assessment, and the penalty orders were passed after the expiry of the six-month limitation period prescribed.
Held
The Tribunal held that the penalty orders were passed beyond the six-month limitation period prescribed under Section 275(1)(c) of the Income-tax Act. As per the settled legal position, penalty orders passed after this period are invalid. Therefore, the penalty orders are bad in law and liable to be quashed.
Key Issues
Whether the penalty orders passed under Section 271(1)(c) are barred by limitation under Section 275(1)(c) of the Income-tax Act, 1961.
Sections Cited
271(1)(c), 274, 148, 144, 264, 275(1)(c)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO & SHRI SONJOY SARMA
Christudanam Yassaya..……………..…...………………..…..….……….Appellant Bathel KP 17A Maruthoor, Vattappara P.O., Thiruvananthapuram, Kerala – 695028. [PAN:ACMPY4412C] vs. ITO, Ward-1(1), Thiruvananthapuram……….…..….....................……........……...…..…..Respondent Appearances by: Shri K M V Pandalai, Adv, appeared on behalf of the assessee. Smt. Leena Lal, Snr AR, appeared on behalf of the Revenue. Date of concluding the hearing: June10, 2025 Date of pronouncing the order: August 06, 2025 ORDER Per Sonjoy Sarma, Judicial Member: These appeals have been filed by the assessee against separate orders passed by the learned CIT(A), all dated 18.04.2024 / 01.03.2024, respectively confirming the imposition of penalty under Section 271(1)(c) of the Income-tax Act, 1961 (hereinafter referred to as “the Act”) for the respective assessment years. Since the issues involved in all these appeals are common except for the difference in assessment years, we take (A.Y. 2012–13) as the lead case. The findings in this appeal shall apply mutatis mutandis to other appeals.
In these appeals, there were delays in filing ranging from 242 days to 290 days. The assessee filed condonation petitions explaining the reasons for such delays. After examining the submissions and being satisfied with the justifications provided, we condone the delay and admit the appeals for adjudication on merits.
Brief Facts of the Case are that for the (A.Y. 2012–13), notice under Section 148 was issued to the assessee and assessment was completed under Section 144 on 30.12.2018, due to non-submission of supporting documents. The assessee filed a revision petition under Section 264, and the Pr. CIT, Trivandrum, vide order dated 26.08.2019, directed the AO to re-examine the assessment.
Subsequently, a fresh assessment under Section 144 r.w.s. 264 was passed on 29.11.2019, determining the total income at Rs. 15,73,016. Simultaneously, penalty proceedings under Section 271(1)(c) were initiated, and notice under Section 274 r.w.s. 271(1)(c) was issued on 29.11.2019. The assessee filed a written reply. However, the AO imposed a penalty of Rs. 3,33,630 by order dated 27.09.2021, which was upheld by the CIT(A).
Dissatisfied with the above order assessee is in appeal before this tribunal at the time of hearing ld AR contended that the penalty order dated 27.09.2021 is barred by limitation under Section 275(1)(c) of the Act. Since the penalty notice was issued on 29.11.2019, the order was required to be passed within six months, i.e., on or before 31.05.2020. Passing the order beyond this date renders it invalid in law. Therefore penalty order is bad in liable to be quashed
On the other hand the learned DR supported the orders of the lower authorities and submitted that the penalty was rightly levied.
We have heard the rival contentions and perused the material available on record. It is an undisputed fact that in the present case notice under Section 274 r.w.s. 271(1)(c) was issued on 29.11.2019 and penalty order was passed on 27.09.2021, i.e., well beyond the six-month period prescribed under Section 275(1)(c). As per the settled legal position, where no appeal is filed against the quantum order, the penalty must be levied within six months from the end of the month in which the penalty proceedings were initiated. In the present case, the last date for passing the penalty order was 31.05.2020. There are several judgments of Hon’ble High Court, it has been held that penalty orders passed beyond the limitation period prescribed under Section 275(1)(c) are invalid. Thus, in the present case of the assessee the penalty order passed on 27.09.2021 is barred by limitation and deserves to be quashed.
ITA No. 148/Coch/2025, and except for the difference in the assessment years. Therefore, the findings and conclusion arrived at in shall mutatis mutandis apply to these appeals as well. Accordingly, all the three appeals are allowed.
Accordingly, we hold that the penalty orders passed under Section 271(1)(c) in the following appeals are barred by limitation and are hereby quashed:
ITA No. 146/Coch/2025 (A.Y. 2012–13) (A.Y. 2013–14) ITA No. 148/Coch/2025 (A.Y. 2014–15)
In the result, all four appeals are allowed.
6th August, 2025