2026 (9) TMI 1169

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....after called 'the Act'). The NFAC's order arises out of the order of the assessment unit imposing penalty u/s. 271D of the Act amounting to Rs. 7,00,000/-. The relevant Assessment Year is 2016-17. 2. Brief facts of the case are as follows: The assessee is as individual. For the assessment year 2016-17, return of income was filed on 31.01.2018 declaring total income of Rs. 3,94,720/-. The assessee during the relevant assessment year had sold a property and received Rs. 7,00,000/- in cash (Rs.3 lakhs on 27.12.2015 and Rs. 4 lakhs on 11.03.2016) thereby violating the provisions of section 269SS of the Act. The assessment unit vide order dated 11.03.2023 imposed penalty of Rs. 7,00,000/- u/s. 271D of the Act for violation of provisions of se....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....reference to the second limb of section 275(1)(c) of the Act, the penalty ought to have been imposed within six months from the end of the month in which the action for imposition of penalty was initiated. Accordingly, the penalty order was required to be passed on or before 28.02.2023. However, in the instant case, the penalty order u/s. 271D of the Act was passed only on 11.03.2023. Therefore, the Ld. AR submitted that the penalty order being barred by limitation needs to be quashed. 6. The Ld.DR was unable to controvert the assertion of the Ld.AR. 7. We have heard rival submissions and perused the material on record. The time limit for imposition of penalty under section 271D of the Act is governed by the provisions of section 275 ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....te that the limitation for passing the penalty order under section 271D of the Act is required to be reckoned in terms of section 275(1)(c) of the Act. Section 275(1)(c) of the Act prescribes two alternative periods of limitation, namely, (i) before the expiry of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed, or ii) six months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later. In the present case, admittedly, no assessment order or other order has been passed in the course of which the penalty proceedings under section 271D of the Act has been initiated. Consequently, the first limb of secti....