TaxTMI 
TaxTMI 
2007 (8) TMI 386
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....ase, the assessee had not complied with the notices issued by the AO in the course of assessment proceedings under s. 142(1) on 13th Nov., 2000, 17th Nov., 2000 and 7th Feb., 2001. It was held by him that there was a clear default, which was also deliberate. Therefore, penalty of Rs. 30,000 was levied @ Rs. 10,000 per default. It was argued before the learned CIT(A) that the order of penalty was barred by limitation under s. 275(1)(c) of the Act, which provides that no order imposing a penalty under this chapter shall be passed in any other case, after expiry of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, or completed, or six months from the end of the month in whi....
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....efore, of the opinion that since penalty proceedings for default in not having transactions through the bank as required under ss. 269SS and 269T are not related to the assessment proceeding but are independent of it, therefore, the completion of appellate proceedings' arising out of the assessment proceedings or the other proceedings during which the penalty proceedings under ss. 271D and 271E may have been initiated has no relevance for sustaining or not sustaining the penalty proceedings and, therefore, cl. (a) of sub-s. (1) of s. 275 cannot be attracted to such proceedings. If that were not so cl. (c) of s. 275(1) would be redundant because otherwise as a matter of fact every penalty proceeding is usually initiated when during some proc....
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....Hon'ble Gujarat (sic-Rajasthan) High Court has clearly distinguished between cls. (a) and (c) of sub-s. (1) of s. 275. Under cl. (a), the levy of penalty is dependent upon the findings of the appellate authorities, which is not the case under cl. (c). In this case, the default of non-attendance to notices was not the subject-matter in the quantum appeal and it in no way depended upon the outcome in the appeal. The penalty depends upon whether the default was willful or not. Therefore, we are of the view that the ratio of the case of Hissaria Bros. will be applicable in this case also. Consequently, it is also held that the order ought to have been passed on or before 31st Sept., 2001, failing which the levy will become barred by limitation.....