2024 (12) TMI 1433

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....ailed in the appeal, during the pendency of the appeal, penalty proceedings could continue. 2. Learned counsel for the petitioner, relying upon the provisions contained in Section 275 (1) (a) of the Income Tax Act, 1961 (for short 'the Act of 1961') would submit that once an appeal is preferred, penalty proceedings have to be kept in abeyance as mandated by law and penalty proceedings could not proceed. The alternative submission is that the satisfaction which has been recorded by the Assessing Authority that present is a fit case for initiating penalty proceedings, is based on incorrect appreciation of facts and law and such finding was not warranted. He would submit that as the Appellate Authority does not have jurisdiction to stay deman....

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....ugned in the appeal, records satisfaction that present is a fit case for initiating penalty proceedings. 8. The question which arises for consideration is as to whether the provisions contained in Section 275(1)(a), per se, operates as bar to initiation of penalty proceedings once an appeal is filed. To resolve this controversy, we need to closely look into and scrutinize the provisions contained in Section 275 (1) (a) of the Act of 1961 which is extracted herein below:- "275. [(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 [Joint Commissioner (Appeals) or to the] Commissioner (Appeals) under section 246 [or sect....

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....mplete embargo on initiation of penalty proceedings on mere filing of appeal. The bar is that if the proceedings are not initiated within the period of limitation, prescribed therein, it will be barred by limitation. Therefore, the bar is based on failure to initiate proceedings and not on mere filing of appeal. That is what flows on literal reading of the provision. There is no warrant for us to add something more into it and to create a new bar on initiation or continuance of penalty proceedings upon mere filing of appeal. Therefore, the submission of learned counsel for the petitioner in this regard must fail. 10. The next submission of learned counsel for the petitioner is that at present he is left with no remedy against penalty proce....