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Case Law Details

Case Name : Salora International Ltd. Vs. Commissioner Of Income Tax (Delhi High Court)
Appeal Number : ITA 799/2005
Date of Judgement/Order : 20/02/2018
Related Assessment Year :
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Salora International Ltd. Vs. CIT (Delhi High Court)

A plain and textual reading of Section 275(1A) clarifies that the expiry of six months prescribed is to be reckoned from the date of completion of proceedings or from the end of the month in which the order of the CIT(A) or as the case may be the appellate tribunal is received. If the logic of the provision is kept in mind, it is obviously an adjudicatory “order” which culminates in “the proceedings” terminus (i.e. an order that determines inter alia the rights of the parties finally) that is to be deemed a terminus quo for the completion of penalty proceedings. Any other interpretation would inject a great deal of uncertainty because in either case of maintainability of an appeal preferred by either the revenue or the assessee, in the eventuality of withdrawal of that appeal, without an adjudicatory order, the period of limitation would be deemed to subsist. The law abhors uncertainty. Therefore, the dependence of the period of the limitation upon whether an order becomes final at the instance of one party, i.e. that filing and prosecution or withdrawal of an appeal (by one party or the other) would be, in the opinion of the Court one such event which leaves the legal position inchoate and unsatisfactory. Instead, an interpretation that permits certainty should be adopted. Viewed as such, the CIT’s order provided a fixed date from which to reckon the end of the period of limitation–some time in early July 1994. The absence of an appeal by the assessee (against the CIT(A)’s appellate adjudicatory order) meant that at least with respect to the amount that it had accepted in the adjudicatory order as an addition, the penalty proceedings survived. As far as the other issue was concerned, perhaps there was no occasion for a further penalty proceeding given that the issue might have been rendered debatable, even in the eventuality of an order favoring the revenue. In other words, as far as deletion was concerned, the assessee definitely was not aggrieved.

In these given circumstances, it was incumbent upon the revenue to complete the penalty proceedings and pass order within the six months period. It did not. Its reliance upon the crutches of a non-appeal, which is what its effort at appeal to the ITAT eventually became in the present case, could not have been legitimately upheld as was done by the impugned order. For these reasons, the question of law is answered in favor of the assessee and against the revenue.


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