Tribunal Upholds CIT(A) Decision: Penalty Order u/s 271D Barred by Limitation; Appeal Dismissed.

The Tribunal upheld the CIT(A)'s decision, ruling in favor of the respondent/assessee, concluding that the penalty order under Section 271D was barred by limitation. The appellant's contention that the order was timely under Section 275(1)(c) was dismissed, as the limitation period expired by 30.06.2011. Consequently, the appeal was dismissed, with no substantial question of law warranting further consideration.

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Issues:
The issues involved in this case are the penalty proceedings initiated against the respondent/assessee for violating the provisions of Section 271D of the Income Tax Act, 1961 and the applicability of the limitation period for passing the penalty order.

Penalty Proceedings under Section 271D:
The appellant/revenue initiated penalty proceedings against the respondent/assessee for accepting monies from 29 parties, resulting in the addition of Rs. 16,69,53,000/- under Section 69C and 68 of the Act. The Assessing Officer (AO) initiated penalty proceedings under Section 271D, 271E, and 271AAA. The CIT(A) ruled in favor of the respondent/assessee on the ground that the penalty order was barred by limitation, a view upheld by the Tribunal.

Applicability of Limitation Period:
The appellant argued that the penalty order was passed within the prescribed period of limitation, as it was issued on 30.12.2011, falling within the timeline specified in Section 275(1)(c) of the Act. However, the appellant's argument was refuted based on a previous judgment where it was concluded that the limitation period cannot be extended by deciding when to issue a notice. The Court held that the notice should have been issued before the expiration of the limitation period, which in this case was determined to have expired latest by 30.06.2011. Therefore, the impugned order was upheld, and the appeal was closed as no substantial question of law arose for consideration.

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