1998 (12) TMI 614

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....11th Nov., 1987, proposing levy of penalty on the assessee for not maintaining account books. He eventually passed order dt. 28th Dec., 1988, imposing a penalty of ₹ 2,500 on this head. He, however, later issued second notice dt. 11th Sept., 1989 to assessee under s. 271B of the Act for its failure to have its accounts audited. 2. The assessee has challenged this notice in the present petition on the ground that it was barred by limitation prescribed under s. 275(b) of un-amended IT Act. The case set up is that under this provision no penalty proceedings could be commenced nor penalty order passed after the expiry of two years from the end of financial year in which proceedings, in the course of which action for imposition of penalt....

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....sal of the provision would show that it laid down bar of limitation in two respects'one explicitly and the other by necessary implication. The explicit bar was that the order of penalty was to be passed within two years from the expiry of financial year in which proceedings in course of which penalty proceedings were initiated were completed. The period of limitation was thus to run from the end of the financial year in which such proceedings were completed. Similarly the implied bar was that penalty proceedings were also required to be commenced and completed within such prescribed period of limitation because s. 275 provided limitation period for both commencement and completion of such proceedings. These proceedings are commenced whe....