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of <h1>High Court rules penalty order under Income-tax Act time-barred</h1> <h3>Commissioner Of Income-Tax Versus Shiv Das Sire Mal</h3> Commissioner Of Income-Tax Versus Shiv Das Sire Mal - [1989] 175 ITR 546, 73 CTR 221, 40 TAXMANN 426 Issues involved: Interpretation of limitation period for imposing penalty under section 271(1)(c) of the Income-tax Act, 1961.Summary:The High Court of Rajasthan addressed a reference under section 256(1) of the Income-tax Act, 1961, raised by the Revenue regarding the justification of a penalty order imposed under section 271(1)(c). The case involved the imposition of a penalty on the assessee for concealment of income, which was initially set aside by the Appellate Assistant Commissioner and later reinstated by the Income-tax Officer. The Appellate Assistant Commissioner held that the penalty imposed by the Income-tax Officer was time-barred, a decision upheld by the Tribunal. The key question revolved around the interpretation of the limitation period prescribed under section 275 of the Act for imposing penalties.In analyzing the case, the Court deliberated on the power of remand by the Appellate Assistant Commissioner under section 251(1)(b) and its relation to the limitation period for imposing penalties. The Court highlighted the relevant portion of section 275, emphasizing the time constraints for passing penalty orders after appeals to the Appellate Assistant Commissioner. It was established that the penalty imposed after the remand order exceeded the prescribed limitation period, rendering it invalid under section 275(a)(ii).Furthermore, the Court distinguished the current provisions under section 275 from those in the previous Income-tax Act of 1922, noting the evolution of the law regarding the limitation for imposing penalties. Referring to past judgments, the Court affirmed that the bar of limitation applies not only to the initial penalty order but also to subsequent penalties imposed as a result of appellate decisions. Consequently, the Court upheld the Tribunal's decision that the fresh penalty order was indeed time-barred, ruling in favor of the assessee and against the Revenue.In conclusion, the Court answered the reference against the Revenue, affirming the validity of the Tribunal's decision regarding the time-barred penalty order. No costs were awarded in this matter.
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