| Question And Answer | |
|---|---|
| Subject: | CIRCULAR OF CBDT ON LOW TAX EFFECT AND EXCEPTIONS. APPLICABILITY ON PENALTY U/S 271(1)(C) OF RS.600000 |
| Category: | Income-Tax |
| Querist: | ANKUR AGRAWAL |
| Answered by: | Advocate Shashi Ashok Bekal |
| Tags: | Penalty -Monetary limit - Circular -Limitation |
| Date: | September 6, 2021 |
Additions were made in the Assessment order on account of discrepancies found in stock in trade ,cash in hand etc. The same was confirmed by CIT(A) and also by ITAT
Penalty u/s 271(1)(C) of Rs.600000 was levied by A.O.
The same was deleted by CIT(A) on the legal ground that the penalty was passed after 6 months from the date of ITAT order.
The department has filed appeal against the order of CIT (A) deleting the aforesaid penalty on 2 grounds:
1.The order of ITAT was received in the office of CIT after 3 months from the date of ITAT order and penalty order was passed within 6 months from the date of receipt in CIT office and therefore levy of penalty is not justified.
2. The case of assessee is covered under exceptions as per para 10(a) of the circular No.03/2018 dated 11/07/2018 of CBDT and further amendments thereto on 20/08/2018.
Ans : As per Para 10(a) of the CBDT Circular No. 03 of 2018 dated July 11, 2018 [2018] 405 ITR (St.) 29, where adverse judgements relating to the Constitutional validity of the provisions of the Act or Rule is under challenge, then there is no monetary limit on the revenue for filing an appeal.
In the given case, the Departmental appeal is on the interpretation of section 275 of the Income-tax Act, 1961. The same cannot be construed to an issue relating to Constitutional validity. Therefore, the Revenue’s appeal will be covered by the pecuniary jurisdiction as determined by the Circular, and may not survive.