Penalty under Section 271D and 271E invoked after limitation period leads to dismissal of appeal and penalty set aside

Penalty provisions under the Income Tax Act were examined with focus on the limitation for invoking penalties; the penalty under those penal provisions was quashed because it was invoked after the six-month limitation, and therefore could not validly be imposed. The court sustained the High Courts decision on that single ground, dismissed the appeal as unnecessary to decide other legal questions, and left other legal issues open without addressing them.

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The Supreme Court dismissed the appeal as the penalty imposed on the respondent under Section 271-D and 271-E of the Income Tax Act was set aside by the High Court due to being invoked after the six-month limitation period. Other legal questions were left open, and no costs were awarded.

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