2023 (10) TMI 1136 - AT - Income Tax

ACIT penalty notice under sections 274/271C ruled time-barred due to revenue's extended inactivity violating section 275(1)(c) limitations

The ITAT Jodhpur held that a penalty notice under sections 274/271C issued by the ACIT on 08.01.2015 was time-barred and beyond the AO's jurisdiction. The ... Penalty u/s 271C - period of limitation - whether Notice time barred and beyond the jurisdiction of the ld. AO? - long time revenue was totally inaction and not levied the penalty - HELD THAT:- The notice u/s 274/271C was duly issued to the assessee by the ACIT, Circle-1, Jodhpur on dated 08.01.2015, the liable for imposition of penalty was duly crossed the limit by violating the provision of section 275(1)(c).The levying the penalty U/s 271C is time barred and beyond the jurisdiction of the ld. AO. We do not intervene the appeal order. The appeal order is upheld. Accordingly, the penalty U/s 271C is quashed. Decided in favour of assessee. Issues Involved:The appeal of the Revenue against the order of the ld. Commissioner of Income Tax (Appeals)-1, Jodhpur u/s 250 (6) of the Income Tax Act 1961 for A.Y. 2012-13.Summary:1. The Revenue challenged the decision of the ld. CIT(A) regarding the imposition of penalty u/s 271C of the Act.2. The main contention was whether the penalty was time-barred and if the AO was justified in imposing the penalty of Rs. 6,000.3. The assessment was framed u/s 143(3) of the Act, and the penalty notice was initiated by the ld. AO on 01.08.2018 u/s 274/271C of the Act.4. The ld. CIT(A) dismissed the penalty u/s 271C, citing contravention of section 275(1)(c) of the Act, leading to the quashing of the penalty amount.5. The Revenue argued that the penalty initiation notice by the ld. ACIT-1 Jodhpur on 08.01.2015 should be ignored, emphasizing the power of the ld. Additional Commissioner to levy the penalty u/s 271C.6. The appellant succeeded on the technical ground of the penalty being time-barred, rendering the second issue moot, resulting in the dismissal of the appeal.7. The Tribunal upheld the appeal order, quashing the penalty u/s 271C amounting to Rs. 6,000, and subsequently dismissed the Revenue's appeal.This judgment highlights the importance of adhering to statutory timelines and the correct initiation of penalty proceedings u/s 271C of the Income Tax Act 1961.