ITO Vs Kushal Infra Project Industries India Ltd. (ITAT Delhi)
The Income Tax Appellate Tribunal (ITAT), Delhi, dismissed an appeal filed by the Department of Revenue, upholding the quashing of a penalty levied under of the Income Tax Act, 1961, against Kushal Infra Project Industries India Ltd. The ITAT’s decision was primarily based on the finding that the penalty order, related to the alleged failure to deduct Tax Deducted at Source (TDS), was time-barred under the statutory provisions.
Case History and Penalty Initiation
The case pertained to the Assessment Year (A.Y.) 2010-11. The assessment under Section 143(3) was completed on March 20, 2013, recording a substantial loss. Crucially, in the same assessment order, the Assessing Officer (AO) initiated penalty proceedings under Section 271C(1)(a) for the non-compliance with Section 192(1) (TDS on salary payments).
Following the initiation, the AO intimated the CIT-TDS for the imposition of the penalty on December 25, 2013. Subsequently, despite the assessee’s failure to attend the proceedings following multiple show-cause notices, the penalty order was passed on July 14, 2016, levying a penalty of Rs. 4,17,01,967.
The assessee appealed the penalty order to the Commissioner of Income Tax (Appeals) [CIT(A)], who allowed the appeal and set aside the penalty on July 30, 2019. The Revenue challenged this decision before the ITAT.
