1973 (9) TMI 15

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....ber 7, 1968, is time-barred ? (ii) Whether, on the facts and in the circumstances of the case, the assessee is estopped from contending that the order of penalty passed by the Income-tax Officer in pursuance of the directions contained in the order of the Income-tax Appellate Tribunal in I. T. A. No. 9202 of 1966-67, dated December 7, 1968, is illegal and void by not challenging the said decision of the Tribunal by applying for a reference therefrom under section 256(1) of the Income-tax Act, 1961? (iii) Whether, on the facts and in the circumstances of the case, the acceptance of the assessee's contention by the Income-tax Appellate Tribunal and the grant of relief on that basis would not amount to a review of its earlier order in I. T.....

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....he completion of the proceedings in the course of which the proceedings for the imposition of penalty have been commenced." A reading of section 275 alone leaves no doubt that an order of penalty must be passed within two years of the completion of the assessment proceedings. In the case in hand, therefore, the orders should have been passed before July 3, 1967, the assessment having been completed on July 3, 1965. The section speaks in terms imperative and the language permits of no relaxation of therigidity of the rule of limitation embodied in the section. The matter appears to be simple enough but counsel for the revenue his brought to our notice a decision of the Bombay High Court in Commissioner of Income-tax v. Kishoresinh Kalyansin....

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....tained in section 275 of the Income-tax Act, 1961. Having come to this conclusion, we will now turn to the three questions. The first question answers itself in the light of what we have said. The order dated March 19, 1969, is beyond the period provided by section 275 and should not have been passed. This is our answer to that question. In regard to the second question, we think it is the department that should have challenged the decision of the Tribunal and not the assessee. The Tribunal should have noticed the limitations of the Income-tax Officer in view of section 275 and, if it committed a mistake, the mistake should have been dealt with by appropriate proceedings before the High Court in reference at the instance of the Commissioner....