Rajendrasuri Gurumandir Trust Vs ITO (Exemptions) (ITAT Bangalore)
ITAT Bangalore held that penalty order under section 272A(2)(e) of the Income Tax Act has to be passed within reasonable time. Since, the penalty order is not passed within reasonable time, the same is liable to be quashed.
Facts- The sole and substantiating ground raised by the assessee to challenge Order of NFAC confirming the penalty levied by the AO of Rs.54,700/- under section 272A(2)(e) of the Act, for delay in filing the return of income. The due date for filing return of income was 30.09.2015 but the assessee filed its return on 31.03.2017. Accordingly, AO levied penalty under section 272A(2)(e) of the Act of Rs.54,700/-.
Conclusion- Cochin Bench of the Tribunal in the case of Noble Pictures vs. JCIT has held that there should be a reasonable time within which penalty proceeding is to be initiated or to be completed. Even if a time is not prescribed under the law, however, the penalty cannot hang on the head of an assessee as sword of Damocles indefinitely and it should be initiated and completed within a reasonable time.
In assessee’s own case it is held that in the present case also, the assessee has filed return of income for the assessment year 2014-15 on 31.3.2017. There was no regular assessment and the return of income has been accepted as it is. In our opinion, copy of the return of income itself serve as an assessment order for all practical purposes. So the penalty proceedings has been initiated vide notice dated 21.12.2020, which is approximately after lapse of 45 months. Therefore, the penalty order passed by ld. AO u/s 272A(2)(e) of the Act is not within reasonable time.
