Law:

Section:

Section 275 of the Income-tax Act, 1961 [as substituted by the Taxation Laws (Amendment) Act, 1971 with effect from 1-4-1971] - Penalty - Bar of limitation for imposition of - For assessment year 1972-73, ITO imposed penalty under section 271(1)(c) on assessee - On appeal, AAC by order dated 31-3-1978 remanded matter to ITO for fresh decision - ITO, in his fresh order dated 30-3-1979 again imposed said penalty - Whether ITO's impugned order dated 30-3-1979 was barred by limitation under section 275(a)(ii) - Held, yes Facts For the assessment year 1972-73, the ITO imposed on the assessee penalty under section 271(1)(c) for concealment of the particulars of income. On appeal, the AAC by his order dated 31-3-1978 set aside the penalty and remanded the matter back to the ITO for a fresh decision after giving the assessee an opportunity of being heard. The ITO, accordingly, passed a fresh order on 30-3-1979 and again imposed the penalty. On appeal, the AAC held that the ITO's order dated 30-3-1979 was beyond time since it was passed after the period of limitation prescribed by section 275. The Tribunal upheld the order of the AAC. On reference : Held An order imposing penalty under section 271 is appealable to the AAC under section 246. Assuming that remand could be validly made under section 251(1)(b), the limitation prescribed under section 275(a )(ii) for making an order imposing penalty is six months from the end of the month in which the order of the AAC is received by the Commissioner, which was admittedly the period which expired later in the present case. A provision corresponding to sub-clause (ii) of clause (a) of section 275 was not present in that section as originally enacted. However, after the amendment whereby said sub-clause (ii) was inserted in section 275, it is clear that the bar of limitation for imposing penalty applies not only to the initial order imposing penalty but also to an order of penalty imposed as a consequence of the appellate order. In the present case, the ITO's fresh order imposing penalty passed on 30-3-1979 was made after the expiry of the period of six months prescribed under section 275(a)(ii ) and was thus barred by the…

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