TaxTMI 
TaxTMI 
2026 (7) TMI 686
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....ppeal for the assessment year 2016-17 is considered as a lead case, and the decision rendered therein shall apply mutatis mutandis to the other appeals. 3. As the assessee has raised similar grounds in all the appeals, the grounds raised in the appeal for the assessment year 2016-17 are reproduced as follows for ready reference: - 1. The order of the learned Assessing Officer and confirmed by the Learned Commissioner of Income-tax (Appeals), in so far as it is against the Appellant, is opposed to law, equity, natural justice, weight of evidence, probabilities, facts and circumstances of the case. 2. The authorities below are not justified in levying penalty u/s. 271D of the Act for INR 52,56,000/- for the year under appeal, under the facts and in the circumstances of the appellant's case. 3. The authorities below are not justified in levy of penalty u/s 271D of the Act in as much as the appellant has demonstrated reasonable cause u/s 273B of the Act for accepting cash deposit of INR 52,56,000/- as part of advance for sale of site and under the facts and in the circumstances of the appellant's case. 4. Without prejudice to the above, the author....
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....ts appeal before the learned CIT(A), the assessee raised an additional ground challenging the penalty order under section 271D on the basis that the same is barred by the limitation period provided under section 275(1)(c) of the Act. The assessee submitted that in the absence of any ongoing assessment proceedings, during which action for imposition of penalty was initiated, the time limit provided in the second limb of section 275(1)(c) of the Act shall be applicable, and therefore, the AO had time only till 28/02/2025 to pass the penalty order. However, since the AO passed the penalty order under section 271D of the Act on 19/03/2025, the same is barred by limitation and thus not sustainable. 7. The learned CIT(A), vide impugned order, held that the penalty levied under section 271D in the present case is within the limitation as per the provisions of section 275(1)(c) of the Act. The relevant findings of the learned CIT(A), vide impugned order, are reproduced as follows: - "In judgment of Hon'ble Punjab & Haryana in 163 taxmann.com. 44(Punjab and Haryana) Hon'ble High Court held that... ▪ The pledging of old jewellery to a pawn broker as a security for ....
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.... 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 Commissioner (Appeals) under section 246 or section 246A 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 the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, whichever period expires later : Provided that in a case where the relevant assessment or other order is the subject-matter of an appeal to the Commissioner (Appeals) under section 246 or section 246A, and the Commissioner (Appeals) passes the order on or after the 1st day of June, 2003 disposing of such appeal, an order imposing penalty shall be passed before the expiry of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiate....
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.... to the provision contained in Section 269SS of the Income Tax Act, 1961. 3. If your do not wish to avail yourself of this opportunity to being heard in person or through authorized representative, you may show cause in writing on or before the above said date & time which will be considered before nay such order is made under section 271D of the Income Tax Act, 1961." 10. Therefore, the question of applicability of the provisions of section 275(1)(a) and section 275(1)(b) of the Act does not arise in the present case. Further, section 275(1)(c) has two limbs and provides two distinct periods of limitation for passing a penalty order, and the one that expires later shall apply. Firstly, it is the end of the financial year in which the quantum proceedings are completed in the first instance. Since no quantum proceedings were initiated for the relevant assessment year, the period of limitation under the first limb is not applicable in the present case. Insofar as the second limb of section 275(1)(c) of the Act is concerned, the period of limitation expires upon expiry of six months from the end of the month in which the action for imposition of penalty is initiated. In th....