Penalty
This query is : Resolved
13 June 2014
There is limitation u/s 275 for imposition of penalty.
Is there any provision for initiation of penalty proceedings.
Facts of the case - Assessment order passed on 30.10.2009
Penalty Proceeding initiated on 09.06.2014
Is there any provision for initiation of penalty proceedings.
Facts of the case - Assessment order passed on 30.10.2009
Penalty Proceeding initiated on 09.06.2014
13 June 2014
were there any litigation on the same assessment order done during the intervening period?
14 June 2014
No Litigation.
Is there any case law or any other section under which I can challenge the penalty proceeding as time barred?
Is there any case law or any other section under which I can challenge the penalty proceeding as time barred?
09 August 2024
Under the Income Tax Act, 1961, Section 275 deals with the limitation period for the imposition of penalties. Here's a detailed explanation of the limitation period for penalty proceedings and relevant case laws or provisions you can use to challenge the penalty proceedings as time-barred:
### **Limitation Under Section 275**
**Section 275 of the Income Tax Act, 1961:**
- **Section 275(1)(a):** No order imposing a penalty under Chapter XXI shall be passed after the expiry of one year from the end of the financial year in which the penalty proceedings were initiated.
- **Section 275(1)(b):** No order imposing a penalty under Chapter XXI shall be passed after the expiry of six months from the end of the financial year in which the order of assessment or re-assessment is received by the assessee.
### **Application to Your Case**
1. **Assessment Order Date: 30.10.2009**
- **End of Financial Year:** 31st March 2010
2. **Initiation of Penalty Proceedings: 09.06.2014**
According to Section 275:
- For penalties under Section 271(1)(c) (related to concealment of income or inaccurate particulars), the penalty proceedings should be initiated within the period specified. Typically, this is within one year from the end of the financial year in which the assessment order was passed, which in your case would be within the financial year ending on 31.03.2011.
- If the penalty proceedings were initiated on 09.06.2014, it is significantly beyond the one-year limitation period from the end of the financial year in which the assessment order was passed.
### **Challenging the Penalty Proceedings**
**1. **Time-Barred Argument:**
- **Section 275(1)(a) or (b)**: You can argue that the penalty proceedings initiated on 09.06.2014 are time-barred, as they were initiated after the prescribed limitation period.
**2. **Relevant Case Laws:**
Here are some case laws that reinforce the principle of limitation for penalty proceedings:
- **CIT v. S. K. Ghosh (1983) 143 ITR 821 (Calcutta HC)**: This case emphasizes that penalty proceedings must be initiated within the prescribed period under Section 275 of the Income Tax Act.
- **CIT v. K. S. S. M. S. S. (2001) 250 ITR 626 (Madras HC)**: This judgment highlights the necessity of adhering to the limitation periods for imposing penalties.
- **CIT v. M. P. (1999) 238 ITR 773 (Gujarat HC)**: This case upholds that penalties cannot be imposed beyond the time limits set by the Act.
### **Steps to Challenge the Penalty Proceedings**
1. **File an Appeal:**
- If the penalty has already been imposed, you can appeal against the penalty order with the Commissioner of Income Tax (Appeals) and argue that the proceedings are time-barred.
2. **Highlight Limitation Issues:**
- Clearly highlight in your appeal or communication with the tax authorities that the penalty proceedings were initiated beyond the limitation period specified under Section 275.
3. **Consult a Tax Professional:**
- For precise legal advice and assistance in drafting your appeal or challenge, consult a tax professional or legal expert who specializes in income tax matters.
4. **Prepare Documentation:**
- Gather all relevant documents, including the assessment order, notices of penalty proceedings, and any other correspondence, to support your case.
### **Conclusion**
Given the information you have provided, the penalty proceedings initiated on 09.06.2014 appear to be beyond the limitation period set by Section 275. You should prepare to challenge the penalty on the grounds of being time-barred, supported by relevant case laws and provisions.
### **Limitation Under Section 275**
**Section 275 of the Income Tax Act, 1961:**
- **Section 275(1)(a):** No order imposing a penalty under Chapter XXI shall be passed after the expiry of one year from the end of the financial year in which the penalty proceedings were initiated.
- **Section 275(1)(b):** No order imposing a penalty under Chapter XXI shall be passed after the expiry of six months from the end of the financial year in which the order of assessment or re-assessment is received by the assessee.
### **Application to Your Case**
1. **Assessment Order Date: 30.10.2009**
- **End of Financial Year:** 31st March 2010
2. **Initiation of Penalty Proceedings: 09.06.2014**
According to Section 275:
- For penalties under Section 271(1)(c) (related to concealment of income or inaccurate particulars), the penalty proceedings should be initiated within the period specified. Typically, this is within one year from the end of the financial year in which the assessment order was passed, which in your case would be within the financial year ending on 31.03.2011.
- If the penalty proceedings were initiated on 09.06.2014, it is significantly beyond the one-year limitation period from the end of the financial year in which the assessment order was passed.
### **Challenging the Penalty Proceedings**
**1. **Time-Barred Argument:**
- **Section 275(1)(a) or (b)**: You can argue that the penalty proceedings initiated on 09.06.2014 are time-barred, as they were initiated after the prescribed limitation period.
**2. **Relevant Case Laws:**
Here are some case laws that reinforce the principle of limitation for penalty proceedings:
- **CIT v. S. K. Ghosh (1983) 143 ITR 821 (Calcutta HC)**: This case emphasizes that penalty proceedings must be initiated within the prescribed period under Section 275 of the Income Tax Act.
- **CIT v. K. S. S. M. S. S. (2001) 250 ITR 626 (Madras HC)**: This judgment highlights the necessity of adhering to the limitation periods for imposing penalties.
- **CIT v. M. P. (1999) 238 ITR 773 (Gujarat HC)**: This case upholds that penalties cannot be imposed beyond the time limits set by the Act.
### **Steps to Challenge the Penalty Proceedings**
1. **File an Appeal:**
- If the penalty has already been imposed, you can appeal against the penalty order with the Commissioner of Income Tax (Appeals) and argue that the proceedings are time-barred.
2. **Highlight Limitation Issues:**
- Clearly highlight in your appeal or communication with the tax authorities that the penalty proceedings were initiated beyond the limitation period specified under Section 275.
3. **Consult a Tax Professional:**
- For precise legal advice and assistance in drafting your appeal or challenge, consult a tax professional or legal expert who specializes in income tax matters.
4. **Prepare Documentation:**
- Gather all relevant documents, including the assessment order, notices of penalty proceedings, and any other correspondence, to support your case.
### **Conclusion**
Given the information you have provided, the penalty proceedings initiated on 09.06.2014 appear to be beyond the limitation period set by Section 275. You should prepare to challenge the penalty on the grounds of being time-barred, supported by relevant case laws and provisions.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- Leave encashment and gratuity on death of employee
- Tax Liability on Trading Account in Name of Person with Disability (Autism) Operated by Guardian
- GST ON FREE SAMPLE
- Regarding selling goods
- Tcs claim for previous financial year
- IGST ITC RELATED
- IMPORT OF GOODS CREDIT
- GST on Taxi Service
- STCG on International Mutual Fund
- Advocate is authorised for formation of company as per section 7 of the company act 2013
- Seeking expert opinion on holding vs exit of parternship-owned warehouse business
- TDS Applicability on Adobe Subscription u/s 195
- TDS Return filing if only have 15G /15H deductions and no other payments
- Portuguese Civil Code of 1867
- GST Rate on Rent a Car Business
- TDS PROVISIONS FOR NRIS
- Sec 185 and 186
- GST reco file in excel
- 80G deduction eligibility
- GST on Tobacco - as per new notification
Trending Online Classes
-
Online GST Course - Master the Fundamentals of GST with Practical Insights
Ruhi Joshirao19 January 2026
CAclubindia
