2019 (2) TMI 658

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....ssessment carried out. 2. As to the block assessment it took its regular course before the appellate authority, the Tribunal as also this Court. The matter stands finalised in Annexure F judgment of this Court. With respect to sale of gunny bags, no interference was caused to the addition made. On the claim of wastage this Court has made a modification reducing the liability of the assessee from that fixed by the Assessing Officer. This Court fixed the wastage at 2% which has acquired finality. The issue herein is with respect to the penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961. 3. The questions of law raised as seen in the memorandum of appeal are extracted hereunder:- 1. Whether on the facts and circumstances of the case the Hon'ble Tribunal was justified in directing the assessing officer to re-work the quantum of penalty in terms of the order of the Hon'ble High Court? 2. Whether on the facts and circumstances of the case the Hon'ble Tribunal was justified in directing the assessing officer to recompute the penalty when there was no clear finding of concealment of income? 3.Whether there were materials before the appellate Tribunal t....

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....learned Senior Counsel, Government of India (Taxes) would however point out that the proviso as introduced in 2003, is only with respect to the limitation operating as against the first Appellate Authority's order and otherwise the main body of the provision at sub-clause (a) of Section 275(1) has to be relied on. 7. In adjudicating the issue we would have to extract the provision as also refer to the various dates. Section 275(1)(a) with the proviso reads as under: "275. Bar of limitation for imposing penalties: (1) No order imposing a penalty under this chapter shall be passed-- (a) in a case where the relevant assessment or other order is the subject matter of an appeal to the Commissioner(Appeals) under Section 246 or Section 246A or an appeal to the Appellate Tribunal under section 253, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which the order of the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal is received by the Principal Commissioner or Commissioner, whichever period expires late....

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....e limitation period has been specifically laid down as one year from the end of the month in which the first appellate order is received by the Department. 10. There can be no resort, for orders passed after 01.06.2003, to the limitation as provided in sub-clause (a) which again provides a further period of six months from the end of the month in which the order of the Appellate Tribunal is received by the Department, is the compelling argument. We are unable to countenance such an argument. Sub-clause (a) provides for a limitation insofar as an order under Section 271 before the end of the month in which the proceedings leading to the penalty proceedings had concluded or six months from the end of the month in which the first appellate order or the order of the Appellate Tribunal is received; whichever is later. Hence when an assessment has resulted in a finding inter alia of concealment of income or furnishing of incorrect details, then, the penalty order has also to be passed in the financial year in which such assessments, re-assessments or block assessment was concluded. Sub-clause (a) of Section 275 (1) provides a further period of limitation in cases where there are appeals....

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....r, from the end of the month in which the Department receives the first appellate order. However, when there is a second appeal filed to the Tribunal, then there is yet another period of limitation provided. It stands further extended and would expire only after six months from the end of the month in which the Department, receives the Tribunal's orders. 12. On the said interpretation we have to look at the dates again. As we noticed, the order under Section 153A was passed on 17.06.2003. On the very same date, a notice for penalty was issued. The assessee filed a first appeal and the proceedings were kept pending. The first appellate authority passed its order on 11.09.2006. Again, the assessee approached the Tribunal with a second appeal. The Department waited for the appeal before the Tribunal to be over; quite justifiable and appropriate, since any modification made in second appeal would result in such modification having to be reflected in the penalty imposed too. The Tribunal passed its order on 08.01.2008. Then, the limitation as provided under Section 275(1)(a) comes to an end insofar as no further extension having been provided with respect to an appeal under Sectio....