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| DATE: | September 2, 2012 (Date of publication) |
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| Click here to download the judgement (wander_271_1_c_penalty_quantum_appeal.pdf) |
If Quantum Appeal admitted by Court, s. 271(1)(c) penalty proceedings may be kept in abeyance till the decision of the High Court on the merits
The assessee’s quantum appeal against the Tribunal’s order was admitted by the High Court. In the s. 271(1)(c) penalty proceedings, the Tribunal, instead of deciding the issue whether the assessee was liable to penalty, restored the issue to the AO with a direction to decide the issue of levy of penalty after the decision of the High Court in the quantum appeal. The department challenged the Tribunal’s order on the ground that it had no jurisdiction to issue such an order as it would in effect extend the time limit prescribed in s. 275 for passing the penalty order (6 months from the end of the month in which the Tribunal’s order is received by the CIT). HELD by the High Court dismissing the appeal:
The assessee’s quantum appeal has been admitted by the High Court. If the assessee succeeds in the quantum proceedings, it would not even be necessary to consider the s. 271(1)(c) penalty proceedings and so no prejudice has been caused to the department qua the penalty proceedings. The department’s apprehension that the penalty proceedings may be barred by limitation u/s 275(1A) is not well founded. In any event, the apprehension is set at rest by directing that in the event the proceedings are held to be barred by limitation, this appeal shall stand revived automatically and without further orders of the Court.
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