DCIT Vs Jugal Kishore Garg alias Jugal Kishore Derewala (ITAT Jaipur)
271D/271E Penalties Time-Barred -No Penalty Once Limitation Expires — Department’s Four Appeals Fail in One Stroke
Revenue filed four appeals challenging CIT(A)’s orders deleting penalties imposed u/s 271D & 271E for alleged violations of 269SS & 269T for AYs 2012-13 & 2016-17.
CIT(A) annulled all penalty orders solely on the ground that they were barred by limitation, having been passed on 23.12.2024 whereas the relevant assessments were completed on 29.03.2024. Applying the binding precedent of Hon’ble Rajasthan High Court in Hissaria Brothers (291 ITR 244), upheld by Hon’ble Supreme Court (386 ITR 719), CIT(A) held that penalty proceedings u/s 271D & 271E are independent of assessment proceedings & the limitation prescribed u/s 275(1)(c) applies.
Tribunal noted that, in Hissaria Brothers, it was categorically held that penalty for violation of 269SS/269T is not linked to assessment but is governed by the general six-month limitation u/s 275(1)(c), reckoned from the end of the month in which penalty proceedings are initiated, or from completion of relevant proceedings—whichever is later. In present cases, the outer limitation expired on 30.09.2024, whereas all penalty orders were passed on 23.12.2024, making them indisputably time-barred.
Revenue could not cite any contrary Supreme Court authority. Tribunal therefore found no infirmity in CIT(A)’s conclusion that the penalties were invalid for being passed beyond limitation. Consequently, all four departmental appeals were dismissed.
