Ganpati Industrial Spares Pvt. Ltd. Vs ACIT (ITAT Nagpur)
Penalty Passed 17 Days After Limitation Quashed: Date of Initiation in Assessment Order Is Decisive, Not Date of Communication
Summary: The Nagpur SMC Bench of the Income Tax Appellate Tribunal has quashed a penalty of ₹4,62,000 under Section 271(1)(c) as barred by limitation. The Tribunal held that penalty proceedings were initiated in the assessment order dated 19 September 2024. Therefore, under Section 275(1)(c), the penalty order ought to have been passed on or before 31 March 2025.
Since the penalty order was passed on 17 April 2025, it was beyond the statutory time limit and was liable to be annulled.
Facts of the case
The assessee was a private limited company. The Assessing Officer completed the assessment under Section 143(3) read with Section 263 on 19 September 2024.
In the assessment order, the Assessing Officer initiated penalty proceedings under Section 271(1)(c) in respect of alleged concealment of income of ₹14 lakh.
The assessment order was subsequently communicated to the assessee through a letter dated 1 October 2024.
After conducting the penalty proceedings, the Assessing Officer passed the penalty order on 17 April 2025, imposing a penalty of ₹4,62,000.
The CIT(A)/NFAC confirmed the penalty. The assessee carried the matter in appeal before the Tribunal.
