PCIT Vs K Umesh Shetty (Karnataka High Court)
In the recent ruling Hon’ble HC have observed that penalty proceedings, initiated u/s 271 D is barred by delay & laches as period of limitation starts from the reference made by ITO to Addl. CIT.
Appellant is engaged in doing digital printing. The question involved in the matter was whether penalty proceedings, initiated u/s 271 D are barred by delay & laches. Assessment in the matter is completed by making certain additions. A reference was made to the Addl. CIT for initiation for penalty u/s 271D alleging violation of section 269SS. Appellant filed objection which were rejected by Addl. CIT vide order dated 22.02.2018. CIT (A) dismissed appeal. Further appeal to ITAT was allowed in favour of the assessee. Order passed by the ITAT is the subject matter of the appeal before HC.
Revenue submitted that once penalty proceedings are initiated by issuance of SCN, same cannot be barred by delay and laches as no limitation period is prescribed for initiation of such proceedings hence ITAT grossly erred in relieving the assessee from the penalty. On the hand appellant contended that penalty proceedings cannot initiated whenever the authorities want. When ITO makes reference to the competent authority, that itself is the triggering point of initiation. Hence, order imposing penalty is time barred and therefore, unsustainable.
