Court dismisses Revenue's appeals against ITAT order for Assessment Year 2009-10 on penalty imposition time limit violation.

The Court dismissed the Revenue's appeals against the ITAT order for the Assessment Year 2009-10, which questioned the imposition of penalty within the time limit specified in Section 275(1)(c) of the Income Tax Act, 1961. The Court held that the penalty orders issued in February 2013 were beyond the prescribed limit, as the initiation of penalty proceedings, not the date of the Show Cause Notice, determines the limitation period under the Act. Consequently, the Court found that no substantial question of law arose, affirming that the penalty orders were clearly barred by limitation.

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Issues:
- Whether the order imposing the penalty was passed within the time limit under Section 275(1)(c) of the Income Tax Act, 1961.

Analysis:
1. The appeals were filed by the Revenue against the ITAT order for the Assessment Year 2009-10, questioning the imposition of penalty within the time limit specified in Section 275(1)(c) of the Act.
2. Following a search operation, a notice under Section 153A was issued to the Assessee, leading to an Assessment Order by the AO. However, the penalty proceedings were initiated more than six months after the assessment order.
3. The Assessee contended that the penalty proceedings were time-barred under Section 275(1)(c) of the Act, which sets a limit for passing penalty orders.
4. The ACIT passed the penalty orders in February 2013, negating the limitation plea, but the CIT(A) later canceled the penalties on merits while upholding the initiation of penalties within the time limit.
5. The ITAT, referring to previous decisions, held that the penalty orders were indeed barred by limitation under Section 275(1)(c) of the Act.
6. The Revenue relied on a different case to argue that the starting point of limitation should be the date of issuance of the Show Cause Notice, but the Court distinguished that case and upheld the decision based on the initiation of penalty proceedings.
7. The Court clarified that the date of initiation of penalty proceedings is crucial for determining the limitation period under Section 275(1)(c) and in this case, the penalty orders issued in February 2013 were beyond the prescribed limit.
8. Consequently, the Court dismissed the appeals, stating that no substantial question of law arose from the ITAT's order, as the penalty orders were clearly barred by limitation under the Act.

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