TaxTMI 
TaxTMI 
2014 (6) TMI 140
X X X X Extracts X X X X
X X X X Extracts X X X X
....end any of the grounds of appeal before or during the course of hearing of the appeal. It is prayed that the order of the CIT(A) being contrary to the facts on record and the settled position of law, be set aside and that of the Assessing Officer be restored." 2. At the time of hearing before us, it is submitted by the Ld. Departmental Representative that during the accounting year relevant to assessment year under consideration, the assessee made the repayment of loan of Rs. 2,75,32,000/- to MGF Development Ltd. The repayment is made otherwise, than by account payee cheque or account payee bank draft. Therefore, the Joint Commissioner of Income Tax, Range-24, new Delhi levied the penalty u/s. 271E of the I.T. Act. That the Joint Comm....
X X X X Extracts X X X X
X X X X Extracts X X X X
....elied upon the order of the Ld. CIT(A) and he referred to section 275 which provides the time limit for levy of penalty. He referred to section 275(1)(c) and submitted that time limit prescribed is upto the expiry of the financial year in which the proceedings in the course of which action for imposition of penalty has been initiated or six months from the end of the month in which action for imposition of penalty is initiated whichever expires later. He submitted from the assessment order dated 5.12.2011, it is evident that the penalty proceedings was initiated. Thus, the financial year expired on 31.3.2012 and six months from the end of the month in which penalty proceedings were initiated expired on 30.6.2012. While the penalty has been ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ly considered the arguments of both sides and perused the material placed before us. The period of limitation for levy of penalty has been prescribed u/s. 275. Section 275(1)(c) reads as under:- "275(1) No order imposing a penalty under this Chapter shall be passed- (a)........... (b)........... (c) in any other case, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later." 3.1 It is not disputed by the Revenue that the case of the assessee is governed by section 275(1)(c). The only dispute by the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d by the assessee to assessee's wife and the account was squared up other than account payee cheque or account payee bank draft. Hence, section 269T is attracted." In response to this specific query, the assessee vide his letter dated 15.11.2011 submitted a generalized reply, which reads as under:- "Please note any settlement by a third party in their books does not tantamount to violation of any law in the books of assessee, Section 269TT or section 269SS as mentioned by your goodself as application if at all on MGF Development Ltd., and in no way in any case proviso attracts my client." The reply of the assessee has been considered. It is an admitted fact that as per the Act the assessee was required to make the payment of the lo....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Act. It is true that u/s. 271E as per sub-section (2) the penalty imposable u/s. 271E is to be imposed by the Joint Commissioner of Income Tax. Now the question remains whether the AO if he is otherthan Joint Commissioner has a right to initiate the penalty proceedings u/s. 271E or not. In our opinion, there is no bar on the Assessing Officer otherthan the Joint Commissioner to initiate the penalty proceedings u/s. 271E. Because it is the AO who can only notice the repayment of loan or acceptance of loan in violation of section 269SS/269T. When there is any acceptance/ repayment of loan in violation of section 269SS/269T, it is the AO who has to prima facie satisfy himself whether there is a violation of section 269SS/269T and if there is ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lty is initiated. In this case the penalty proceedings was initiated during the course of assessment proceedings for assessment year 2009- 10. The assessment order was passed on 5.12.2011. Therefore, the penalty proceedings was initiated in the course of assessment proceedings in the financial year 2011-12, such financial year expired on 31.3.2012. Six months from the initiation of penalty proceedings also expired on 30.6.2012. The penalty order has been passed on 14.9.2012 which was certainly after the period of limitation prescribed u/s. 275(1)(c). Therefore, in our opinion, the Ld. CIT(A) rightly held that the penalty order to be barred by limitation. 3.4 Even on merit, it is not a fit case for levy of penalty u/s. 271E. Penalty u/s. ....