2025 (11) TMI 1504

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....n appeal before the learned CIT(A), who, vide order dated 01.09.2006, granted partial relief. Aggrieved, the department filed an appeal before the Tribunal, and the Tribunal, vide order dated 31.08.2012, adjudicated the quantum issues in favour of the assessee. The department thereafter carried the matter further to the Hon'ble Bombay High Court under section 260A. Despite the conclusion of the entire appellate process in the quantum proceedings, the penalty order under section 271(1)(c) saw the light of day only on 27.10.2023-more than seventeen years after the CIT(A)'s order and more than eleven years after the Tribunal's order. 3. Before the learned CIT(A), the assessee specifically contended that the penalty order was barred by limitation as prescribed under section 275(1)(a). The assessee relied upon Form No. 36 filed by the department itself in the quantum appeal, wherein the department had categorically mentioned that the CIT(A)'s order dated 01.09.2006 had been received on 22.11.2006. Accordingly, the outer limit for imposing penalty expired on 31.03.2008. It was argued that the penalty order dated 27.10.2023 was therefore wholly without jurisdiction and liable to be qua....

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....e department's own pleadings carries conclusive evidentiary value and binds the revenue for computing limitation. 5.2. Additionally, the learned CIT(A) had sought a remand report from the Assessing Officer solely on the question of limitation, and the Assessing Officer responded by accepting the chronology furnished by the assessee, though attempting to justify the belated penalty on the plea that the records of the CIT(IT)-2 did not reflect the date of receipt of the CIT(A)'s order. "2. The assessee vide its submission before the Ld. CIT(A) has contended that as per the time lines set down u/s 275 of the Act, the order passed in the case of the assessee u/s 271(1)(c) dated 27/10/2023 is beyond the period of limitation and therefore liable to be treated as non-est. 3. The arguments preferred by the assessee before your Honour imply that the order u/s 271(1)(c) should have been passed by the AO within 6 months of appellate order and not beyond 31/03/2007, which is 6 months from the end of the month in which the order has been passed thereby making the penalty order bad in law. 4. Although the assessee's claim regarding the time line of al orders pas....

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....cause was issued to the assessee vide letters dated 11/10/2023 & 25/10/2023 without receiving any reply, resulting into an ex-parte penalty order u/s 271(1)(c) dated 27/10/2023. The assessee's reply received on 5/4/2024 sating that it had closed its operations in 2002 December. (Has been found on record and copy is enclosed) 7. Further, from the records it is seen that while filing appeal with the High Court, this office could not locate Form 35 either in its records or in the records of the Tribunal and had to file the appeal without Form 35. A copy of letter addressed to the DCIT (IT) Judicial-2 Mumbai dated 4/12/2023 is enclosed for reference, which is indicative of the fact that orders were not readily available with the AO CIT(IT)-2, Mumbai at the time of filing appeal to the Bombay HC against the ITAT order deleting the quantum addition. 8. In summation, it can be inferred that the order of the CIT(A) was never received in the office of the CIT (IT)-2, Mumbai prior to the date of receipt of ITAT order and there is no proof of receipt in the O/o the CIT(IT) Mumbai either with this office or with this office and neither has the assessee provided any eviden....

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....l receipt, not to the quality or existence of departmental record-keeping. 8. It is a well-settled principle that penalty provisions, being quasi-criminal in nature, must be construed strictly. Once the statutory period expires, the authority to impose penalty is lost irrevocably. Administrative lapses or internal disarray cannot breathe life into a proceeding that has become barred by time. The moment the department acted upon the CIT(A)'s order by filing Form No. 36, the date of receipt became incontrovertible. The subsequent plea of non-traceability cannot rewrite or extend the limitation prescribed by statute. 9. The learned CIT(A), in concurring with the Assessing Officer's reasoning, has overlooked the decisive evidentiary value of Form No. 36 and the inescapable consequence that follows from section 275(1)(a). The jurisdiction to levy penalty extinguished on 31.03.2008. Any penalty order passed thereafter is void ab initio. What has been attempted in October 2023 is not merely belated but jurisdictionally impossible. 10. In view of the aforesaid discussion, we hold that the penalty order dated 27.10.2023 is patently barred by limitation under section 275(1)(a) and i....