AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (1) TMI 1677
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....hallenged that penalty order dated 11/03/2020 both for 271D and 271E is barred by limitation u/s.275(1)(c). Since issue of limitation has been challenged that penalty levied by the ld. JCIT on 11/03/2020 itself is barred by limitation therefore, same is being taken up first. 3. The brief facts qua the issue are that assessment order u/s. 143(3) r.w.s. 147 was completed vide order dated 28/12/2018. During the course of re-assessment proceedings ld. Assessing Officer noted that the assessee has accepted cash loan to the tune of Rs. 42.50 Lakhs and has repaid back the loan Rs. 34.50 lakhs in cash during the year and thereby, violating the provision of Section 269SS and 269T. Accordingly, he initiated the penalty and made a reference to his range head (i.e. JCIT) for initiation of penalty and leviable u/s. 271D and 271E respectively. The exact observation of the ld. Assessing Officer is as under :- "6. Initiation of Penalty proceedings u/ s. 271D & 271E As discussed above, the assessee has accepted cash loans to the tune of Rs. 42.50 lakhs and repaid Rs. 34.50 lakhs in cash during the year, thereby violating the provisions of section 26955 & 269T respectively. Henc....
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....dly, 'in the course of which initiation of action for imposition of penalty'. This does not mean imposition of penalty itself. There has to be some kind proceedings under the Act in which the grounds for initiation of penalty are found or satisfaction is arrived or forms the basis for initiation of penalty. It is from these proceedings of initiation of action for imposition of penalty, the time for limitation starts ticking. In cases of penalties u/s 271D or 271E, it is the AO who first possibly notice the violation under section 269SS or 269T during the course of assessment proceedings and then only competent authority like JCIT or Addl. CIT are authorised to impose penalty. Thus, there are two time limit envisaged in section 275, one, before the expiry of the financial year in the course of proceedings in which action for the imposition of penalty has been initiated; or second six months from the end of the month in which action for imposition of penalty is initiated. In both scenarios, first time limit has expired on 31/03/2019 and second, i.e., six months has expired on 30/06/2019. Here the order has been passed on 11/03/2020 which clearly is barred by limitation. 8.....
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....penalty proceedings. Given the scheme of section 275(1)(c) it would be the date on which the AO wrote a letter to the ACIT recommending the issuance of the SCN. While it is true that the ACIT had the discretion whether or not to issue the SCN, if he did decide to issue a SCN, the limitation would begin to run from the date of letter of the AO recommending "initiation' of the penalty proceedings." 9. The legal principle for determining the date of initiation of penalty proceedings has been settled by the predecessor bench of this Court in its decision of JKD Capital & Finlease Ltd. (supra) which reads as under: - "2 ... While finalising the assessment order dated December 28, 2007 the Assessing Officer ("the AO") in the concluding paragraph issued a direction to initiate proceedings against the assessee under sections 271(1)(c) and 271E of the Act. Admittedly, under section 271E(2) of the Act, any penalty under section 271E(1) can only be imposed by the Joint Commissioner of Income-tax ("the Joint CIT"). Consequently, the Assessing Officer referred the matter to the Additional Commissioner of Income-tax. 3. A perusal of the order dated March 20, 2012, ....
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....d the penalty proceedings in December 2007, the last date by which the penalty order could have been passed is June 30, 2008. The later of the two dates is June 30, 2008.' (Emphasis Supplied) 10. The contentions urged by the learned counsel for the Revenue in the present appeals are therefore reiteration of pleas which have been categorically rejected by the predecessor bench of this Court in the aforesaid judgments. 11. In the present appeals, a perusal of the assessment order(s) shows that the penalty proceedings were initiated by the AO in the assessment order(s) itself. Illustratively, the direction contained in the assessment order dated 17th December, 2008, pertaining to ITA No. 577/2018, Rishikesh Buildcon Put. Ltd. may be referred to, which reads as under :- " ... Initiate penalty proceedings u/s, 271(1)(c) for concealment of income & 27l(1)(b) for non-compliance of statutory notices, & 271 D for violating the provisions of Section 269 SS as discussed above." 12. The predecessor bench of this Court in the aforesaid judgments has held that where the AO has initiated the penalty proceedings in his/her assessment order, the said....
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....said appeal has been filed by the Revenue against order dated 05/07/2024 passed by NFAC, Delhi for the quantum of assessment passed u/s.143(3) r.w.s. 147 for the A.Y. 2016-17. 13. In the grounds of appeal the Revenue has challenged the deletion of addition of Rs. 2,24,00,000/- u/s. 69A. 14. The assessee on the other hand had stated that here in this case the notice issued u/s. 148 is invalid because the mandatory requirement of seeking approval by the competent authority u/s. 151 has been given by ld. PCIT which otherwise as per the new provision applicable w.e.f. 1-04-2021, the approval should have been given by PCCIT or CCIT if the notice is issued after the expiry of three years from the end of the assessment year. Before us, following chronology of events has been given on this issue :- S. No. Date Particulars 1 30/06/2021 First notice u/s 148 of the Act issued vide DIN: ITBA/AST/S/148/2021-22/1033871296(1) with the prior approval of necessary satisfaction u/s 151 of the Act of the Range 17(1) Mumbai as is mentioned in the notice itself. 2 Admittedly, no notice u/s 148 of the Act for this assessment year was issued up to 31/0....
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....neficial to the assessee because it specifies a higher level of authority for the grant of sanctions in comparison to the old regime. Therefore, in terms of Ashish Agarwal (supra), after 1 April 2021, the prior approval must be obtained from the appropriate authorities specified under Section 151 of the new regime. The effect of Section 151 of the new regime is thus: (i) If income escaping assessment is less than Rupees fifty lakhs: (a) a reassessment notice could be issued within three years after obtaining the prior approval of the Principal Commissioner, or Principal Director or Commissioner or Director; and (b) no notice could be issued after the expiry of three years; and (ii) If income escaping assessment is more than Rupees fifty lakhs: (a) a reassessment notice could be issued within three years after obtaining the prior approval of the Principal Commissioner, or Principal Director or Commissioner or Director; and (b) after three years after obtaining the prior approval of the Principal Chief Commissioner or Principal Director General or Chief Commissioner or Director General." 17. Further, in para 76 the Hon'ble Apex Court has specifically held tha....
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....uired to take prior approval from the specified authority according to Section 151 of the new regime before passing the order u/s. 148A(d) on the issue of notice u/s.148A. These notices ought to have been issued following the time limit u/s. 151 of the new regime. Therefore, in view of the law laid down by the Hon'ble Supreme Court, the impugned notice u/s. 148 for the A.Y. 2016-17 dated 30/07/2022 is beyond the period of three years from 31/03/2017 and therefore, it was incumbent to obtain the proper approval of CCIT or PCCIT and here admittedly, the approval has been taken by PCIT and therefore, in terms of Section 151, the notice itself is bad in law and consequently, the entire re-assessment proceedings renders void ab initio. 20. Apart from that, it has been stated that the notice itself is barred by limitation in terms of judgment of Rajeev Bansal (supra) wherein the Hon'ble Court has laid down the permissible time limit to issue notice u/s.148 and in this regard our attention was also drawn to paragraphs 110, 111,112 and 114. For sake of ready reference these paras are reproduced hereunder :- "110. The effect of the creation of the legal fiction in Ashish....
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....e assessing officers were required to issue the reassessment notice under Section 148 of the new regime within the time limit surviving under the Income Tax Act read with TOLA. All notices issued beyond the surviving period are time barred and liable to be set aside." 21. Further, lastly in para 113 of the said judgment it has been observed and held as under :- 113. In Ashish Agarwal (supra), this Court allowed the assesses to avail all the defences, including the defence of expiry of the time limit specified under Section 149(1). In the instant appeals, the reassessment notices pertain to the assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018. To assume jurisdiction to issue notices under Section 148 with respect to the relevant assessment years, an assessing officer has to: (1) issue the notices within the period prescribed under Section 149(1) of the new regime read with TOLA; and (ii) obtain the previous approval of the authority specified under Section 151. A notice issued without complying with the preconditions is invalid as it affects the jurisdiction of the assessing officer. Therefore, the reassessment notices issued under Section 148 o....