|CORAM:||G. C. Gupta (VP), T. S. Kapoor (AM)|
|CATCH WORDS:||limitation period, penalty|
|DATE:||June 10, 2015 (Date of pronouncement)|
|DATE:||June 30, 2015 (Date of publication)|
|FILE:||Click here to download the file in pdf format|
|S. 275(1)(a): Law on time limit for passing penalty order u/s 271(1)(c) explained. Challenge by assessee to validity of penalty order entertained in Dept's appeal despite lack of C. O. /cross-appeal by assessee|
On a combined reading of Section 275(1)(a) along with its proviso it becomes clear that main section 275(1)(a) talks of a period of six months from the date on which the order is received by commissioner and main section also talks of orders passed by commissioner appeals as well as by tribunal talk whereas the proviso which is applicable from 01.06.2003 talks about orders passed by Commissioner Appeals only and here, the period of limitation for passing penalty order is one year from the date Commissioner receives Tribunal order. We find that in the present case quantum proceedings travelled up to Hon’ble ITAT and therefore, main section 275(1)(a) will be applicable wherein the period of limitation has been mentioned as six months from the end of financial year in which order is received by Commissioner. The proviso to section 275(1)(a) will not be applicable. Proviso talks about orders passed by Commissioner (Appeals) only. Admittedly, the quantum order in the present case was received on or before 11.05.2007 as noted in reply to RTI application and therefore, penalty order should have been passed on or before 30th Nov., 2007 whereas, the penalty order has been passed on 10.01.2008 which is beyond the limitation period of six months. In view of above, as the penalty order has not been passed within six months from the end of month in which order was received by Commissioner, the penalty order passed by A.O. is bad in law and is therefore, quashed.