Penalties under Sections 271D and 271E canceled by Tribunal for exceeding time limit.

The penalties imposed under sections 271D and 271E were canceled by the Tribunal due to being outside the prescribed limitation period. The Tribunal allowed both appeals by the assessee solely on this ground, without considering other arguments presented.

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Issues involved:
The issues involved in this case are the imposition of penalties under sections 271D and 271E for alleged violations of sections 269SS and 269T, the challenge of penalties on grounds of limitation, and the applicability of different clauses of section 275 for determining the limitation period for penalty proceedings.

Imposition of Penalties under Sections 271D and 271E:
The assessee, engaged in the business of cotton waste, received cash loans and made cash repayments, which were deemed to violate sections 269SS and 269T. The Assessing Officer initiated penalty proceedings under sections 271D and 271E, imposing penalties of Rs. 19,870 and Rs. 18,000, respectively. The penalties were upheld by the CIT(A) despite various explanations and pleas made by the assessee.

Challenge of Penalties on Grounds of Limitation:
The counsel for the assessee argued that the penalties were barred by limitation. The assessment order was passed in June 1992, and the penalty orders were issued in August 1993. The applicability of different clauses of section 275 was debated, with the counsel contending that the penalties were time-barred under the amended provisions of section 275.

Applicability of Section 275 for Determining Limitation Period:
The Tribunal analyzed the provisions of section 275 to determine the limitation period for penalty proceedings under sections 271D and 271E. It was observed that penalties under these sections are independent of assessment proceedings and can be initiated separately. The Tribunal concluded that the penalties imposed were outside the prescribed period of limitation, thus canceling them on grounds of limitation. The decision was supported by a previous decision of the Pune Bench of the Tribunal and interpretations of relevant legal provisions.

In conclusion, the penalties imposed under sections 271D and 271E were canceled due to being outside the prescribed limitation period. The Tribunal allowed both appeals by the assessee based on this ground, without delving into other arguments presented.

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