TaxTMI 
TaxTMI 
2015 (6) TMI 396
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....ly by the Hon'ble ITAT, Jaipur Bench, Jaipur. Such view has been accepted by the Department also as no Reference or SLP has been filed against such view of the Judicial Authorities. Thus, it is virtually a 'covered point'. Not following the view taken by the Hon'ble Jurisdictional High Court and the Hon'ble local ITAT, Bench is contrary to the Judicial Discipline and deserves to be quashed summarily. 2. On the facts and in the circumstances of the case the learned CIT(Appeals) has factually and legally erred in upholding the penalty U/s 271D of the Act to the extent of Rs. 4,42,28,772/- out of Rs. 6,34,38,484/- as levied by the A.O. without appreciating the facts of the case in right perspective. The penalty so imposed and confirmed by the Authorities Below deserves to be deleted." Grounds of Assessee's appeal ITA No. 877/JP/2013 "1 On the facts and in the circumstances, the ld. CIT(A) has factually and legally erred in ignoring the fact that the penalty proceedings got time barred in view of the latest judgment of Hon'ble Rajasthan High Court in the case of Shri Jitendra Singh Rathore without appreciating the facts of the case in right perspective, particularly when the same....
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....nst confirming the penalty U/s 271D and 271E of the Income Tax Act, 1961 (hereinafter referred as the Act) at Rs. 4,42,28,772/- and Rs. 99,50,000/- respectively. The revenue was against the appeal on deleting of penalty under these Sections at Rs. 1,92,09,712/- and Rs. 77,50,000/- respectively. The assessee is a company and the assessee has Income from property business, development of township. Search and seizure operation was carried out U/s 132(1) of the Act on 16/11/2007 at the business premises of assessee. During the course of search and seizure operation, documents/loose papers were found and seized. The case was scrutinized U/s 143(3) of the Act. This is the first year of commencement of property business of the assessee. The assessee had purchased land during the year. During the year under consideration, the assessee had purchased land for its Global City Project (240 Bigha approx) in village- Chakbad. The land was purchased @ Rs. 24.51 lacs per bigha and total amount of Rs. 11.00 crores was paid up to the date of search. Certain expenses too were incurred during the year, which have been shown as work in progress. No sales were made during the year. During the year under....
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.... The assessee had failed to prove the genuineness of transaction and creditworthiness of the person giving unexplained cash credits received/introduced by the assessee during the year. The ld Assessing Officer gave the schedule of the persons with description, names of the parties, amount received by the assessee, mode of payment on page Nos. 4 to 7. When there was no satisfactory explanation from the assessee company with evidence, the ld Assessing Officer treated these deposits unexplained cash credits U/s 68 of the Act. He made addition U/s 68 of the Act at Rs. 7,16,02,224/-. The ld Assessing Officer as per chart given on page No. 8 of the assessment order also made disallowance U/s 40A(3) by giving the detailed observations on pages 8 to 11 at Rs. 5,13,95,252/-. The ld Assessing Officer also initiated penalty proceedings U/s 269SS and 269T of the Act. As per Section 271D and 271E of the Act, these penalties can be imposed by the Joint Commissioner of Income Tax (JCIT), therefore, the ld Assessing Officer made reference to the JCIT, Central Range, Jaipur vide letter dated 23/2/2012 and ld Assessing Officer stated that during the assessment proceedings for A.Y. 2008-09, he found ....
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....ecord and adjourn the proceedings to the first or second week of April, 2012. The ld JCIT held that AR of the assessee appeared on 26th March, 2012 but there was no such commitment of taking the proceedings in April, 2012. Had it been so, the notice would not have mentioned time barring dated as 31/3/2012 and the hearings would not have been so frequently conducted. Also, the AR did not even bother to quote the relevant provisions according to which the case was getting time barred beyond March, 2012 as per his understanding. It is more than clear that because the counsel was not prepared with the reply, he resorted to such a measure. Needless to mention that in spite of having ample time at his disposal, because the first notice of violation of provision of section 269SS was served on 30/12/2009 and thereafter almost more than a month's time was available to the assessee to file the reply. However, nothing substantial was submitted in the reply. At this point, it is imperative to quote proviso to section 275(1)(a) which talks of bar of limitation for imposing penalty- "provided that in a case were the relevant assessment or other order is the subject matter of an appeal to the Com....
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....posits/advances in cash of more than Rs. 20 thousands rupees. ii. Second contention of the assessee is that since the A.O. could not ascertain the exact nature of these receipts the said addition of cash receipts were made by the A.O. by resorting to the deeming provisions and addition u/s 68 was made. In the regard it is stated that addition made by the A.O. u/s 68 of the receipts has no bearing on the violation of the provisions of Sec. 269SS. Even if the addition was made by the A.O. u/s 68 after treating the receipts as unexplained cash credit, but still the transaction was done in cash such that the provisions of Sec. 269SS were violated (this issue will be elaborately discussed in the subsequent paras). Although the additions made by the A.O. u/s 68 were knocked out by the appellate authorities but that does not mean the money was not received from the various parties. So there is a disconnect between the two sections. iii. The third argument put forth by the assessee's AR is that the said receipts were only advances for plot/land booking and repayment thereof on cancellation of booking and such advance moneys and repayment thereof, so the provisions of Sec. 269SS do no....
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....any and the transactions would have been made through account payee cheques/drafts. It is not understandable as to what prevented the assessee to avoid the banking channel. Even if share application money cannot be considered to be a loan within the meaning of Section 269T it partakes of the character of a deposit, since it is repayable in specie on refusal to allot share and is repayable if recalled by the applicant, before allotment of shares and the conclusion of the contract. Hence the acceptance of share application money in cash amounting to Rs. 20,000 or more violates the provisions of section 269SS and repayment of the same violates the provision of Sec. 269T. He further relied on the decision of Hon'ble Jharkhand High Court in the case of Bhalotia Engineering Works Pvt. Ltd. Vs. CIT 275 ITR 399 on repayment of loan in cash. Finally he imposed penalty U/s 271E at Rs. 1,77,00,000/-, which is equivalent to repayment of deposit amount. 3. The assessee challenged the penalty before the ld. CIT(A), who had allowed the penalty partly. The ld CIT(A) had considered the Hon'ble Jurisdictional High Court decision in the case of CIT Vs. Jitendra Singh Rathore (2013) 257 CTR (Raj) 1....
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....ce dated 10/03/2009 issued by the Assessing Officer was nonest. The ld JCIT had issued notice under both the sections on 24/2/2012 and penalty order was passed on 30/3/2012, which was well within time. The ld CIT(A) also gave the finding on merit on page Nos. 11 to 17 and held that the ld CIT(A)'s finding in quantum addition was not specific, therefore, it has not been accepted by him and he also held that the Hon'ble ITAT had also not adjudicated the order of the ld CIT(A) in quantum appeal that deposits were advanced for land and confirmed the order of the CIT(A) for addition of Rs. 4,95,82,259/-. The ld CIT(A) had quantified the deposits not advanced for land at Rs. 81,35,272/- as per order of CIT(A) and the Hon'ble ITAT in quantum appeal. Therefore, she reverified these loans and found that these are cash deposits not for the land. It comes within the purview of Section 269SS for violation of which a penalty U/s 271D is required to be imposed. She also treated cash payment of Rs. 1,19,54,712/- being advance against the land deal after considering the Hon'ble ITAT Jaipur Bench decision in the case of Laddu Lal Ghessa Lal HUF Jaipur Vs. DIT ITA No. 953/JP/2011 dated 02/2/2012. Sh....
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....45/-. The plea taken by the AR of the assessee that these transactions are genuine and established by it and section 273B is applicable on it but these arguments of the AR were not found convincing to her. Finally she upheld the penalty of cash deposit of Rs. 4,42,28,772/-. 3.1 The assessee also challenged before the CIT(A) that the penalty U/s 271E is barred by limitation as penalty order by the JCIT on 30/3/2012 for which the ld A.O. issued notice on 30/12/2009. The assessee also relied on same case narrated for penalty U/s 271D of the Act. The ld CIT(A) gave the same finding as given for 271D penalty that is notice dated 10/3/2009 was nonest. Show cause notice by the ld JCIT on 24/2/2012 and penalty order was passed on 30/03/2012, which was well within time. 3.2 He further considered the case on merit and verified the cash deposits were advanced for land. He held in para 15 that there is no evidence for Rs. 81,35,272/- that these cash deposits were received for purchase of land. Out of this, the assessee returned back Rs. 13,50,000/-. He further held that the ld CIT(A) in quantum appeal had not given categorical finding that these cash receipts against the purchase of land. E....
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....red the Hon'ble Rajasthan High Court's decision in the case of CIT Vs. Hissaria Brothers, CIT Vs. Jitendra Singh Rathore (supra) and ACIT Vs. Dipak Kantilal Takvani (2013) 39 Taxmann.com 53 (Rajkot Trib) (TM( wherein it has been held that penalty U/s 271D and 271E is covered U/s 275(1)(c) as per this Section, six months is allowed to complete the penalty from the end of the month in which action was initiated. Therefore, he prayed to delete the penalty imposed by the ld JCIT, confirmed by the ld CIT(A). 5. At the outset, the ld Sr. DR supported the order of the ld CIT(A) and argued that the assessee's appeals were pending in quantum before the appellate authority and the Hon'ble ITAT has passed order in quantum application on 06/5/2011, which was received in the office of CCIT later on and this penalty is covered U/s 275(1)(a) of the Act. As per this Section, the limitation starts from after the expiry of financial year, in which the proceedings in the course of which action for imposition of penalty has been initiated, or completed within one year from the end of the financial year, in which the order of Commissioner received by the Principal Chief Commissioner, whichever p....
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....ese are the business transactions. The ld CIT(A) wrongly held on the basis of quantum appeal decided by the CIT(A) as well as the ITAT that these are the loan and deposit in cash as covered by Section 269SS of the Act. 8. The ld AR has submitted that these are business transactions and not covered U/s 269SS, which can be verified from the order of the ld CIT(A) as well as order of the Hon'ble ITAT. The Hon'ble ITAT had deleted the additions made by the Assessing Officer U/s 68 of the Act as well as U/s 40A(3) of the Act and also held that these were business transactions. 9. The ld DR relied upon the order of the Assessing Officer and argued that no where these aspects has been considered by the ld CIT(A) as well as the Hon'ble ITAT in quantum appeal. Therefore, she relied upon the order of the ld CIT(A) vehemently and prayed to confirm the penalty. 10. We have heard the rival contentions of both the parties and perused the material available on the record. On merit also, these cash transactions also are not covered U/s 269SS and 269T of the Act as these were business transactions made for purchase of land/share application money which has been received by the assessee and re....