DEWAN ENGINEERING WORKS Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE assessee has preferred this appeal under s. 260A of the IT Act, 1961 (in short, 'the Act') against the order dt. 18th law : "(i) Whether, on the facts and in the circumstances of the case, the Tribunal has fallen in error in holding that the penalty imposed by the AO has not become barred by time limitation despite there being bar under s. 275(1)(a) of IT Act, 1961 that no penalty can be imposed after the expiry of six months from the end of the month in which the order of the CIT(A) is received by the CIT ? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal has fallen in error in holding that since the quantum appeal was pending before the Tribunal, the limitation period for imposing penalty had not yet expired, despite the fact that as per the ratio of the judgment of Hon'ble Supreme Court in the case of Computwel Systems (P) Ltd. vs. W. Hasan & Anr. (2003) 184 CTR (SC) 92 : (2003) 260 ITR 86 (SC), the appeal could be regarded as pending only if the delay had been condoned -

(2.) REASSESSMENT proceedings were taken against the assessee in the light of material found during search and in the light of facts that were revealed, proceedings for penalty were also initiated. The levy of penalty was challenged by the assessee on the ground that it was beyond the stipulated period of limitation under s. 275 of the Act i.e. six months from the date of receipt of order of the appellate authority. This plea was rejected by the CIT(A) and the said order has been upheld by the Tribunal. The Tribunal held as under : "We have considered the submissions. The learned CIT(A) has dealt with the issue in para 4 of its order wherein the proceedings in abeyance till the decision of the Tribunal. In such a situation, we are not in agreement with the argument of the assessee that it is barred by limitation because firstly the period of six months from the end of the month in which CIT(A)'s order was received, still time was there and secondly, the matter was got delayed by the assessee himself with a request that the penalty proceedings may be kept in abeyance. In such a situation, now the AO (sic -assessee) cannot blame the Department; it is pertinent to mention here that the Tribunal dismissed the appeal of the assessee and delay was pending before the Tribunal. Therefore, we have not found any merit in the contention of the assessee. The conclusion of the learned CIT(A) is upheld."

(3.) WE have heard learned counsel for the parties and perused the record. passing order of penalty commenced from the receipt of the said order. The Tribunal wrongly held that the limitation will commence from the date of receipt of order of the Tribunal as the appeal filed before the Tribunal was beyond limitation and delay was not condoned. In these circumstances, the filing of appeal and pendency thereof had to be ignored. Reliance has been placed on judgment of the Hon'ble Supreme Court in Computwel Systems (P) Ltd. vs. W. Hasan & Anr. (2003) 184 CTR (SC) 92 : (2003) 260 ITR 86 (SC).