ITAT dismisses Revenue appeals on penalty orders for A.Y. 2006-07, 2007-08, and 2009-10 due to limitation

Deputy Commissioner of Income Tax, Central Circle 03 New Delhi Versus M/s Raj Katha Products P. Ltd.

Deputy Commissioner of Income Tax, Central Circle 03 New Delhi Versus M/s Raj Katha Products P. Ltd. - TMI Issues:
Appeals by Revenue against orders of Ld.Commissioner of Income Tax (Appeals) for A.Y. 2006-07, 2007-08, and 2009-10.

Analysis:

1. Issue of Limitation:
The assessee raised the issue of limitation under Rule 27 of ITAT Rules. The Ld.CIT(A) decided against the assessee, but the ITAT held that the assessee is entitled to raise the ground on limitation. The ITAT considered the common issues in all appeals together for convenience.

2. Interpretation of Section 275:
The ITAT referred to the order of the Ld.CIT(A) which discussed Section 275 regarding the limitation on passing penalty orders. The Ld.CIT(A) dismissed the appellant's appeal, stating that the penalty order was within the prescribed limitation under Section 275(1)(c). However, the ITAT cited a judgment of the Delhi High Court in a similar case, emphasizing the two distinct periods of limitation for passing a penalty order and concluded that all impugned penalty orders were barred by limitation.

3. Application of Legal Precedent:
The ITAT applied the legal principles established by the Delhi High Court judgment to the present case. It highlighted that the penalty order should have been passed by a certain date to comply with the limitation provisions. The ITAT found that the penalty orders in question were passed beyond the prescribed date, rendering them all barred by limitation. Consequently, the ITAT dismissed all Revenue appeals based on the limitation issue.

In conclusion, the ITAT ruled that the penalty orders in question were barred by limitation as per the provisions of Section 275. By applying the legal interpretation from the Delhi High Court judgment, the ITAT found that the penalty orders should have been passed by a specific date, which was not adhered to in this case. Therefore, all Revenue appeals were dismissed due to the limitation issue.