Narendrakumar Lalchand Jain Vs ITO (ITAT Mumbai)
Penalty u/s 271(1)(b) quashed as time barred- Order passed beyond limitation u/s 275(1)(c): ITAT Mumbai
Mumbai ITAT struck down a penalty of ₹10,000 levied u/s 271(1)(b) for alleged non-compliance with a statutory notice, holding that the order was passed well beyond the limitation period prescribed u/s 275(1)(c).
Assessee’s assessment for AY 2012-13 was completed u/s 144 r.w.s. 143(3) on 17.12.2019, wherein an addition of ₹2,37,700 was made u/s 68. AO, on 18.12.2019, initiated penalty proceedings u/s 271(1)(b) for failure to comply with a notice issued during the assessment. The penalty order was eventually passed on 01.03.2022, imposing ₹10,000.
Before the Tribunal, Assessee contended that the penalty was hopelessly barred by limitation. Since no appeal was filed against the assessment order, the time limit under section 275(1)(c) required the penalty order to be passed within the later of: (i) the end of the financial year in which the proceedings were completed (31.03.2020) or (ii) six months from the end of the month in which penalty proceedings were initiated (30.06.2020). The order of 01.03.2022 was thus far beyond the permissible period.
Revenue attempted to justify the delay citing procedural reasons, opportunities given to Assessee & systemic aspects of faceless proceedings, arguing for a liberal interpretation of the limitation period.
