“Section 275(1)(c)”
The decision most relied on for Section 275(1)(c) is CIT v. Eli Lily & Co. (312 ITR 225), cited in 221 judgments on BharatTax.
Leading authorities on Section 275(1)(c)
Section 195 of the Income Tax Act, which mandates tax withholding on payments to non-residents, applies only to sums that are otherwise chargeable to tax under the Act. Tax withholding provisions are not charging provisions.
Penalty proceedings for defaults under Sections 269SS and 269T are independent of assessment proceedings; therefore, the limitation period under Section 275(1)(c) for imposing such penalties is not contingent on the completion of appellate quantum proceedings.
A penalty levied under Section 271(1)(c) is not sustainable if the notice issued under Section 274 fails to specifically mention whether the charge relates to concealment of income or furnishing inaccurate particulars of income. The Assessing Officer must specify the exact charge for the penalty to be valid.
Rule 27 of the ITAT Rules allows a respondent to defend a favourable order of the CIT(A) by raising grounds decided against them, even without filing an appeal or cross-objection. Such issues can be raised orally and for the first time before the Tribunal.
The date of initiation of penalty proceedings for the purpose of Section 275(1)(c) is when the Assessing Officer records a satisfaction or recommends penalty, not the later date when the Joint/Additional Commissioner of Income Tax issues the penalty notice.
The relevant date for determining the limitation period under Section 275(1)(c) for passing penalty orders under Sections 271D and 271E is the date of passing the assessment order.
For initiating penalty proceedings under Section 271D or 271E, the Assessing Officer must record satisfaction in the assessment order; non-recording of such satisfaction is fatal to the penalty.
The satisfaction of the Assessing Officer is not a prerequisite for the initiation of penalty proceedings. Penalty proceedings initiated by the Joint Commissioner of Income Tax are valid. The date of the show cause notice by the penalty imposing authority is relevant for computing limitation for imposing penalty under Section 271DA.
