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 holding that the penalty levied on the respondent-assessee under Section 271D is barred by limitation. We have heard Senior counsel appearing for the appellant and Sri.V.V.Asokan, counsel appearing for the respondent- assessee. 2. After hearing both sides, we notice that even though penalty proceedings were initiated based on data gathered in the course of search and subsequent assessment under Section 158BC read with Section 158BD, the levy of penalty was not linked to any assessment or other proceedings. In other words, penalty levied under Section 271D was only for violation of Section 269SS i.e. for receiving cash payments in excess of the limit provided therein which is a violation of the said provision. Therefore, the provision on limitation for penalty applicable is Section 275(1)(c) under which the maximum period for 2 completion of penalty proceedings is six months from the end of the month in which action for imposition of penalty is initiated. In this case admittedly the order was passed beyond the period provided under Section 275(1)(c). Consequently we do not find any merit in the appeal filed by the Revenue and the same is, therefore, dismissed. C.N.RAMACHANDRAN NAIR Judge BHABANI PRASAD RAY Judge pms