PCIT Vs Thapar Homes Limited (Delhi High Court)
Delhi High Court addressed the issue of penalty limitation under the Income Tax Act in the case of PCIT vs Thapar Homes Ltd. The case pertained to the assessment year 2008-09, where the Assessing Officer (AO) initiated penalty proceedings under Sections 271AAA, 271D, and 271E. The primary issue was whether the Income Tax Appellate Tribunal (ITAT) erred in ruling that the penalty imposed under Section 271E was barred by limitation as per Section 275(1)(c). The court examined whether the limitation period should be counted from the date the penalty was first initiated by the AO or from when the Joint Commissioner of Income Tax (JCIT) issued a subsequent notice.
The revenue argued that since the JCIT issued the penalty notice on 13.06.2011, the limitation period should be calculated from that date, making the final penalty order of 30.12.2011 valid. However, the court noted that the AO had already initiated penalty proceedings within the assessment order dated 31.12.2010, which was approved by the Additional Commissioner of Income Tax (ACIT). According to Section 275(1)(c), the limitation period expires either at the end of the financial year following the assessment or six months from the initiation of penalty proceedings, whichever is later. Since the AO had initiated the proceedings within the assessment order itself, the latest permissible date for passing the penalty order was 30.06.2011.
