2016 (3) TMI 366

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.... the case are that the assessee has field its return of income on 31.3.1997 showing NIL income. This return was revised on 24.1.1996 for adjustment of certain claims, but position of income remained NIL only. During the course of assessment proceedings, it was noticed from the statement of income enclosed that the assessee has shown net profit as per audited accounts at Rs. 1,01,51,442/-. The assessee has claimed depreciation and amortization under section 35D. As per the revised return, all these deductions were totalled up to Rs. 1,01,21,210/-. The assessee has worked out the income of Rs. 9,97,663/- which was claimed exempt under section 80HHC. In this way, the income declared by the assessee was NIL. On scrutiny of the accounts, it reve....

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....refore, penalty u/s. 271(1)(c) is levied on the assessee. Moreover, keeping in mind the Vanchoo Committee observation that the purpose of penalty should be only to bend and not break the tax payer. As such assessee company is liable for penalty u/s. 271(1)(c) of the I.T.Act." 4. Appeal to the CIT(A) did not bring any relief to the assessee. 5. Before us, the ld.counsel for the assessee, at the very outset submitted that the penalty order was time barred. Though the assessee failed to take this plea before the CIT(A), but being a legal plea, it can be raised at any stage. In order to buttress his argument that the penalty order is time barred, the ld.cousnel for the assessee has placed on record, the details in tabular form. It reads a....

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....e order. This order was not challenged in further appeal. The AO has given effect to the order of the CIT(A) on 29.9.1999. The penalty proceedings were initiated on 31.3.1997. The penalty order has been passed on 30.7.2002. According to the ld.counsel for the assessee, the penalty order ought to have been passed before the end of the financial year 31.3.2000 i.e. date of 29.9.1999 falls in this financial year or this order should have been passed within six months from the receipt of the order of the CIT(A) by the Commissioner or the Chief Commissioner. This order, according to the ld.counsel for the assessee, must have been received before 29.9.1999, because on this date, effect has been given to the order of the CIT(A) by the AO. In order....