Section 275(1)(a) of the Act does not nullify the availability to the AO of the period of limitation of six months from the end of the month when the order of the ITAT is received by the Assessing Officer

CIT vs. Mohair Investment & Trading Co (Delhi High Court)-  From a plain reading of the relevant Sections it is clear that the period of six months provided for imposition of penalty under Section 275(1)(a) starts running after the successive appeals from an assessment order has been finally decided by the CIT(A) or the ITAT as the case may be whichever period expires later. The proviso to section 275(1)(a) has only had the effect of extending the period of imposing penalty from six months to one year within the receipt of the order of the Commissioner after 1^st June, 2003.The proviso thus carves out an exception from the main Section inasmuch as in cases where no appeal is filed before the ITAT the Assessing Officer must impose penalty within a period of one year to be reckoned from the date of receipt of the order by the Commissioner. To read this provision as suggested by the Counsel for the Assessee would obliterate the main provision itself. In this behalf it is necessary to remember that a proviso is merely a subsidiary to main Section and must be construed in the light of the Section itself. It has to be construed harmoniously with the main provision. This conclusion is fortified by the decision of the learned Judge in Rayala Corporation (supra), where it was held that in case where an appeal is pending before the Tribunal the limitation period for levy of penalty can only be as provided for under Section 275(1)(a), i.e., six months from the end of the month in which the order of the Tribunal is received by the Commissioner. Insofar as the submission with regard to the Section being read in consonance with Section 275(1A) is concerned, we are of the opinion that the latter Section which was introduced later on does not dilute or in any manner render nugatory the main provision, which can only be read to mean that the limitation period for levy of penalty, only in the case of order of the Tribunal, to be as provided under the main Section and not otherwise.

Thus we are of the view that the proviso to Section 275(1)(a) of the Act does not nullify the availability to the Assessing Officer of the period of limitation of six months from the end of the month when the order of the ITAT is received by the Assessing Officer. In the present case the order of the ITAT was rendered on 1 1th August, 2008 and the order passed by the Assessing Officer levying penalty was passed on 2 6th February, 2009, i.e., within a period of six months from the order of the ITAT.

The substantial question of law as framed is therefore decided in favour of the Revenue and against the Assessee.