TaxTMI 
TaxTMI 
2025 (1) TMI 1789
X X X X Extracts X X X X
X X X X Extracts X X X X
....ion 133A of the Act, petitioner was assessed to income tax under section 143(3) of the Act for the assessment year 2017-18, by an order dated 26.12.2019. In the aforesaid order, though the Assessing Officer specifically observed that proceedings for imposition of penalty under section 270A ought to be initiated, there was no reference for initiating proceedings under section 271B of the Act. More than four years later, on 21.03.2024, a notice was issued under section 274 of the Act proposing to impose penalty under section 271B of the Act, for not filing the audit report in the prescribed form as required under section 44AB of the Act for the above referred assessment year. By the impugned order dated 25.09.2024, a penalty of Rs.1,50,000/- ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tted that, even if the benefit of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020 is applied, still, the respondent cannot have an extended period till 2024. The decision of the Allahabad High Court in Commissioner of Income-tax v. E.C.C. Project Pvt. Ltd. (2015) 374 ITR 44 as well as the decision of the Delhi High Court in Commissioner of Income Tax (TDS)-2, Delhi v. Turner General Entertainment Networks India Pvt Ltd (2024 SCC OnLine Del 7760) apart from that of the Madras High Court in Jagadeesan Jaganathan vs. Joint Commissioner of Income Tax (W.P. No. 16335 of 2022) were relied upon. 5. Sri. Jose Joseph, the learned Standing Counsel, on the other hand, countered petitioner's submissions and....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... such a specific direction. With respect, this Court is unable to subscribe to the contrary view of the Allahabad High Court in Commissioner of Income-tax v. E.C.C. Project Pvt. Ltd. (2015) 374 ITR 44). 7. Nonetheless, the requirement of an audit report under section 44AB of the Act will generally become obvious to the Assessing Officer at the time of passing an order of assessment. Penalty proceedings under section 271B of the Act can follow the assessment order. As per section 275(1)(c) of the Act, the penalty proceedings will have to be completed either before the end of the financial year in the course of which action for imposition of penalty has been initiated or within six months of initiating proceedings for imposing penalty. For....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ngle Judge of the Madras High Court held that though a time limit for issuance of a notice under section 275(1)(c) has not been specified, it has to be assumed that the notice ought to be issued before the end of the financial year itself. In that case, the assessment order was issued on 31.03.2020 and the court found that since notice should have been issued by 31.03.2020 itself, the last date for passing the order expired on 30.09.2020. 10. In Commissioner of Income-tax vs. Chhajer Packaging and Plastics P. Ltd., (2007 SCC OnLine Bom 1332), a Division Bench of the Bombay High Court observed that, though assessment proceedings were completed on 30.03.1999, the show cause notice was issued on 06.04.1999 and the period of limitation expir....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... months, is clearly indicative that the Income Tax Officers cannot be given a long handle to initiate proceedings at any point of time, according to their caprice. The possibility of initiating proceedings against an assessee cannot be kept pending over his head like a Damocle's sword, indefinitely. Indisputably, the return filed by an assessee is verified at the time of assessment. Though penalty proceeding under section 271B of the Act is independent of the assessment, as far as the time limit is concerned, it cannot be wholly extricated from the assessment order. Once an assessment is completed, it will act as a leash, compelling the Officers to act within a reasonable time from its completion, for the purpose of imposing a penalty. 1....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of the Act must be initiated and completed within a reasonable time of the assessment order. 17. Since the assessment order in the instant case does not refer to any proceeding for imposition of penalty under section 271B, the time limit cannot be said to have emanated from the assessment order. However, as the assessment proceedings itself would have revealed the absence of an audit report, as contemplated under sections 44A and 44B, the show cause notice should have been issued within a reasonable time of the assessment order. By applying the provisions of the Taxation and Other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020, the end date for passing orders was extended till 31.03.2022, and the respondents were entitl....