TaxTMI 
TaxTMI 
2004 (9) TMI 564
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....ions contained under section 269SS of the Act. The Addl. CIT, Range-2, Kota had also levied the penalty of Rs. 1.60 lakhs under section 271E of the Act for repayment in cash in contravention of the provisions contained in section 269T of the Act. The assessee had accepted certain loans/deposits in cash and had also made the repayment of the deposits in cash as under :-- Date of Receipt of Loan/Deposit Date of Repayment of Loan/Deposit Amount Shri Madan Lal, Haripura 6-8-1996 9-1-1997 Rs. 18,000 15-10-1996 19-1-1997 Rs. 35,000 28-10-1996 2-2-1997 Rs. 25,000 Date of Receipt of Loan/Deposit Date of Repayment of Loan/Deposit Amount Shri Mangi Lal, Haripura 6-8-1996 9-1-1997 Rs. 10,000 19-8-1996 12-1-1997 Rs. 20,000 13-9-1996 15-1-1997 Rs. 50,000 4-10-1996 9-1-1997 Rs. 20,000 5-11-1996 2-2-1997 Rs. 10,000 In this case, the search was conducted on 24-2-1999 and order under section 158BC was passed on 24-8-2001. After having considered the explanation of the assessee, the Addl. CIT, Range-2, Kota has levied the penalty of Rs. 1.60 lakhs under section 271D of the Act and he has also levied the penalty of Rs. 1.60 lakhs under section 271E of the Act. The ld.....
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....son is the Additional CIT. Therefore, the penalty proceedings can only be initiated by him. 6. The ld. AR made the following submissions :-- "In the case of penalty under section 271D/E, the limitation provisions under section 275(1)(c) are applicable as against 275(1)(a) for the reason that cash transactions in contravention of section 269SS/T has got nothing to do with the assessment of the income and, hence, are not subject-matter of appeal before the first appellate authority. Section 246A which has listed the appellable orders has not included any appeal against any such transactions in cash under section 269SS/T. Section 275(1)(a) relates only to those orders which can be subject-matter of appeal. The ld. CIT(A), therefore, has rightly decided the issue in assessee's favour. For this proposition, following case laws are being relied on: 1. Supreme Metprodes Ltd. v. Asstt. CIT 29 Tax World 25 (Jp.). 2. Dillu Cine Enterprises (P.) Ltd. v. Asstt. CIT 80 ITD 484 (Hyd.). 3. Manohar Lal v. Dy. CIT 53 TTJ 105 (Jp.). 4. Hissariya Bros. [2001] 73 TTJ 1 (Jd.). Provision of section 275(1)(c ) stipulates that a penalty has to be levied within a period of 6 months from the end of t....
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....ell within time-limit prescribed under section 275(1)(c) of the Act. We do not agree with the contention of the ld. AR that block assessments are issued with prior approval of the Addl. CIT and he was well aware of initiation of penalty proceedings. The time-limit should be counted from the date of show-cause notice issued by the Assessing Officer. We are of the opinion that the competent authority, i.e., Addl. CIT is to be satisfied about the initiation of penalty proceedings and he comes to know about the facts of the case when he issued the show-cause notice on 26-4-2002. The ld. DR had rightly placed reliance on the case of Asstt. CIT v. Shree Nivas Chemicals [2003] 84 ITD 76 (Chd.) and the case of CIT v. S.M. Syed Mohamed [1995] 216 ITR 3311 (Ker.) (FB). Again we agree with the contention of the ld. DR that Additional CIT cannot be said to be satisfied about the initiation of penalty proceedings while approving the block assessment under section 158BG of the Act as the approval is internal matter and the approval does not determine the right of the assessee as held in the case of Rishabchand Bhansali v. Dy. CIT [2004] 267 ITR 5772 (Kar.). Thus, we hold that the ld. CIT(A) erre....
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....could not prove that it had acted as Commission Agent for this transaction and the amount had been received by sale of agricultural produce, i.e., vegetables. 11. The ld. AR submitted that the assessee firm is engaged in the business of Kacha Arhatiya in the Subzi Mandi, Kota. The provisions of sections 269SS and 269T cannot be made operative unless it is established that the assessee accepted the loans/deposits in cash. The amount under consideration in this case were not at all in the nature of any loan/deposit. The assessee admittedly being a Kacha Arhatiya rendered various services to its constituents. A Kacha Arhatiya sells the goods brought to it by the seller and he also collects the sale price from the buyer. The sale consideration received later on is thus kept by him on behalf of the seller. It is not uncommon that the constituents also leaves some money as a safe custody in Amanat. 12. The ld. AR, inter alia, also made the following submissions :- 1.No loan/deposit taken/accepted: Current/Accommodation transactions are out of its purview: For this purpose, he relied on the following case laws: (a) Vir Sales Corpn. v. Asstt. CIT [1994] 50 TTJ (Ahd.) 130 (b) Mool Chan....
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....For this purpose, he relied on the following circular and case laws: (a)CBDT Circular No. 387, dated 6-7-1984, 146 ITR 162 (Statute) and No. 345, dated 28-6-1982 (Chaturvedi & Pithsariya) Vol. 5, Pages 5732 & 5735) (b) Shashikant Laxman Kale v. Union of India [1990] 185 ITR 1041 (SC) (c) Vir Sales Corpn. v. Asstt. CIT [1994] 50 TTJ (Ahd.) 130 (d) Chandra Cement Ltd. v. Dy. CIT 23 TW 160 (Jp.) (e) Kalman Mal Harakchand v. Dy. CIT (sic). 10.If on interpretation, two views possible, view favourable to assessee be adopted. For this purpose, he relied on the following case laws: (a) CIT v. Vegetable Products Ltd. [1973] 88 ITR 192 (SC) (b) Mansinghka Bros. (P.) Ltd. v. CIT [1984] 147 ITR 3612 (Raj.). 11.Farmers were not maintaining any bank account at Kota. Therefore, this was a reasonable cause for making the advance in cash as held in the case of ITO v. Maheshwari Nirman Udyog 27 TW 310 (Jd.). 12.Loan and Deposit are different from each other. For this purpose, he relied on the following case laws: (a) Baidya Nath Plastic Industries (P.) Ltd. v. K.L. Anand, ITO [1998] 230 ITR 522 (Delhi) (b) ITO v. Kishan Gopal 28 TW 23 (Jd.) (c) A.M. Shamsudeen v. Union of India [2000] 2....
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....lar tax payer being guided/advised by legal expert cannot take plea of ignorance of law because the loan was accepted in cash by the assessee and not by the farmers. We are, therefore, of the opinion that having regard to the various contentions and pleas raised by the ld. AR and also after going through the order of the ld. CIT(A), the real issue of the assessee-firm being commission agent had not been proved. Therefore, the orders of the lower authorities are set aside with the direction to the Addl. CIT/JCIT, Range-2, Kota that he should consider all the pleas afresh raised by ld. AR except those decided through this order. The assessee should be asked specifically to give evidence regarding the fact of bringing agricultural produce to the market and having it sold through the Commission Agency of this firm. The appeal of the department is allowed for statistical purposes. 15. Now we shall decide the issue of cancellation of penalty under section 271E by the ld. CIT(A). 16. We have heard the rival submissions and perused relevant case laws. For deciding the issue of levy of penalty, it is necessary to refer to the provisions contained in section 269T of the Income-tax Act. Sec....