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 revenue had remained inactive for an extended period without levying the penalty, violating section 275(1)(c) limitation provisions. The tribunal upheld the appeal order and quashed the penalty under section 271C, deciding in favor of the assessee due to the procedural lapse in timely penalty imposition.

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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.

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