TaxTMI 
TaxTMI 
2019 (8) TMI 1934
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.... of nursing. Pursuant to survey action under section 133A of the Income Tax Act, 1961 (in short 'the Act') conducted at the assessee's premises on 23.01.2013, the Assessing Officer (AO), on examination of the assessee's accounts, was of the view that the assessee by virtue of non-deduction of the whole or part of tax at source on payments which fall within the ambit of TDS provisions under section 192, 194I, 194C and 194J of the Act was to be held as "an assessee in default" for Assessment Years 2011-12 to 2013-14 and accordingly passed orders under section 201(1) and 201(1A) of the Act dated 23.03.2013. While passing these orders, the AO recorded therein that penalty proceedings were being separately taken up. 2.2 Subsequently, the Addl. CIT, TDS Range, Hubli, passed separate orders dated 26.07.2016 under section 271C of the Act levying penalty thereunder on the assessee for Assessment Years 2011-12 to 2013-14. On appeal, the CIT(A), Davangere, dismissed the assessee's appeals vide order dated 12.06.2018; thereby upholding the levy of penalty by the AO on the assessee for the three Assessment Years 2011-12 to 2013-14. 3. Aggrieved by the combined orders of the CIT(A), Davang....
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....e of revision under section 263 or 264 of the Act, the provisions of clauses (a) and (b) to sub section 1 of section 275 of the Act would not be attracted. It is contended by the learned AR that in these factual circumstances, it is the provisions of clause (c) of subsection 1 of section 275 that is applicable in the case on hand. Therefore, the AO ought to have passed the order levying penalty under section 271C of the Act, either before the end of the financial year in which the proceedings; in the course of which action for imposition of penalty has been initiated; are completed, or six months from the end of the month in which the action for imposition of penalty is initiated, whichever period expires later. The learned AR submits that since the proceedings by which the AO stated by his orders under section 201(1) and 201(1A) of the Act dated 22.03.2013 that penalty proceedings were being referred separately to the Addl. CIT, as per the provisions of section 275(1)(c) of the Act, the AO ought to have passed the orders under section 271C of the Act for all three Assessment Years 2011-12 to 2013-14 on or before 30.09.2013; and since these orders have actually been passed about 3 ....
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....e the relevant assessment or other order is the subject matter of an appeal to the Deputy Commissioner (Appeals) or the Commissioner (Appeals) under section 246 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 6b[the Deputy Commissioner (Appeals) or] the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal is received by the Chief Commissioner or Commissioner whichever period expires later; (b) in a case where the relevant assessment or other order is the subject matter of revision under section 263, after the expiry of six months from the end of the month in which such order of revision is passed; (c) in any other case, 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 action for imposition of penalty is initiated, whichever period expires later. ]" 4.....
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....r 2011-12 to 2012-13 and we find that action for penalty was contemplated therein by the AO against the assessee under section 271C of the Act. That a show cause notice was only issued on 22.01.2016; about 3 years later would not help Revenue case as the same is issued much after the completion of TDS proceedings under section 201(1) of the Act and not during the pendency of these proceedings. In this regard, the Hon'ble Delhi High Court in the case of PCIT Vs. JKD Capital and Finlease Ltd., (2015) 378 ITR 614 (Delhi) observed at para 11 thereof as under:- 11 In fact, when the Assessing Officer recommended the initiation of penalty proceedings the Assessing Officer appeared to be conscious of the fact that he did not have the power to issue notice as far as the penalty pro- ceding's under section 271E was concerned. He, therefore, referred the matter concerning penalty proceedings under section 271E to the Additional Commissioner of Income tax. For some reason, the Additional Commissioner of Income-tax did not issue a show-cause notice to the assessee under section 271E(1) till March 20, 2012. There is no explanation what- soever for the delay of nearly five years after th....