Ita/86/2010 Of Commissioner Of Income Tax v. Rosary Prem, Lekshmi, Karuvelippadi

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE B.P.RAY WEDNESDAY, THE 12TH JANUARY 2011 / 22ND POUSHA 1932 ITA.No. 86 of 2010() -------------------- IT(SS)A.53(COCH)/2005 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT/RESPONDENT ------------------------------ THE COMMISSIONER OF INCOME TAX, (CENTRAL), COCHIN. BY ADV. SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT/APPELLANT ------------------------ SMT. ROSARY PREM, LEKSHMI KARUVELIPPADI, KOCHI. ADV. SRI.K.I.MAYANKUTTY MATHER SRI.MAHESH V.MENON THIS INCOME TAX APPEAL HAVING BEEN FINALLY HEARD ON 12/01/2011, THE COURT ON 12/01/2011 DELIVERED THE FOLLOWING: C.N.RAMACHANDRAN NAIR &BHABANI PRASAD RAY, JJ. .................................................................... I.T. Appeal No.86 of 2010 .................................................................... Dated this the 12th day of January, 2011. JUDGMENT Ramachandran Nair, J. Question raised is whether the Tribunal was justified in holdingthat the penalty levied on the respondent-assessee under Section 271Dis barred by limitation. We have heard Senior counsel appearing for theappellant and Sri.V.V.Asokan, counsel appearing for the respondent-assessee. 2. After hearing both sides, we notice that even though penaltyproceedings were initiated based on data gathered in the course ofsearch and subsequent assessment under Section 158BC read withSection 158BD, the levy of penalty was not linked to any assessment orother proceedings. In other words, penalty levied under Section 271Dwas only for violation of Section 269SS i.e. for receiving cashpayments in excess of the limit provided therein which is a violation ofthe said provision. Therefore, the provision on limitation for penaltyapplicable is Section 275(1)(c) under which the maximum period for completion of penalty proceedings is six months from the end of themonth in which action for imposition of penalty is initiated. In thiscase admittedly the order was passed beyond the period provided underSection 275(1)(c). Consequently we do not find any merit in the appealfiled by the Revenue and the same is, therefore, dismissed. C.N.RAMACHANDRAN NAIRJudge pms BHABANI PRASAD RAYJudge