TaxTMI 
TaxTMI 
2016 (4) TMI 303
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....acts and in the circumstances of the case as well as law on the subject, the A.O. ought to have considered that the loan transaction in cash is with sister concerns (family members) only. [4] On the facts and circumstances of the case, the Learned CIT(A)-IV, Surat erred in confirming the penalty without appreciating the facts of the case as well as without considering the judgment of the Hon'ble High Court of Gujarat in the case of CIT vs Shree Ambica Flour Mills Corporation reported in (2008) 6 DTR (Guj) 169 favourably. Your appellant therefore prays that looking to the facts and circumstances of the case, the penalty levied by the learned assessing officer and confirmed by the CIT(A)-IV, Surat to the tune of Rs. 76,000/- may please be deleted. Your appellant further reserves his right to add, alter or to amend any of the aforesaid grounds at the time of hearing of an appeal. 2. Briefly stated facts are that the assessee is an individual and he has filed his return of income for Asst. Year 2008-09 on 5.1.2009 declaring total income at Rs. 1,24,460/-. The case was selected for scrutiny assessment through CASS and notice u/s 143(2) of the Act was is....
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....d that the appellant had entered into loan transactions with sister concerns only. The transactions carried out with sister concerns through in cash are genuine, bonafide and without any malafide intention. The appellant relied the Gujarat High Court's decision in the case of CIT V/s. Shree Ambica Flour Mills Corporation, 2008 6 DTR (Guj.) 169. 4.3 I have gone through the penalty order, submissions of the appellant and the judicial decisions relied upon by the appellant. The fact of the case cited by the appellant is very different from the facts of his own case. In the case cited by the appellant there were business as well as gift transactions between the appellant and his sister concerns and there was a reasonable ground for carrying out the transaction in cash. However, in the case of the appellant there are loan transactions in cash on various dates. In fact on each date the cash amount has been kept at a uniform figure of Rs. 19,000/- while the transactions have taken place on different dates. In other words the appellant has accepted loan in cash of Rs. 19,000/- each on 11.04.2007, 26.04.2007, 14.05.2007, 25.05.2007 from M/s. Jay Mahalaxmi Textiles. It is strang....
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....ings u/s.27lD of the I.T.Act by issuing separate penalty notice u/s.274 r.w.s. 271 of the Act dated 30-11-2010 vide penalty Reg.No.5/83/10-11. The copy of assessment order along with penalty notice issued by the learned A.O. is submitted along with Appeal memo in Form No.35. Before coming to the issue, it is relevant to go through the provisions of section 275 of the I.T. Act. The relevant provisions of section 275(1)(c) is reproduced herewith for better understanding:- No order imposing a penalty under this Chapter shall be passed- (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 month from the end of the month in which action for imposition of penalty is initiated whichever period expires later. In this case, the original assessment order was framed by the then A.O. on 30-11-2010 for the A.Y.2008-09 wherein he also initiated the penalty proceedings u/s.271D by issuing separate notice u/s.274 r.w.s. 271 of the Act dated 30-11-2010. On going through the relevant provisions of section 275(1) (c) of the Act/ it reveals the penalty or....
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....r accepting certain loans and deposits. 269SS. No person shall, after the 30th day of June, 1984, take or accept from any other person (hereafter in this section referred to as the depositor), any loan or deposit otherwise than by an account payee cheque or account payee bank draft 7a[or use of electronic clearing system through a bank account] if,- (a) the amount of such loan or deposit or the aggregate amount of such loan and deposit ; or (b) on the date of taking or accepting such loan or deposit, any loan or deposit taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), the amount or the aggregate amount remaining unpaid ; or (c) the amount or the aggregate amount referred to in clause (a) together with the amount or the aggregate amount referred to in clause (b), is [twenty] thousand rupees or more : Provided that the provisions of this section shall not apply to any loan or deposit taken or accepted from, or any loan or deposit taken or accepted by,- (a) Government ; (b) any banking company, post office savings bank or co-operative bank ; ....
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....71D has been rightly imposed because there was no reasonable cause put forward by the assessee before the lower authorities and before us which could have proved that there was a reasonable cause due to which the loan was taken in cash. We are of the view that penalty u/s 271D has been rightly imposed and confirmed by ld. CIT(A). Accordingly, we dismiss ground Nos.1 & 3 of assessee's appeal. 11. Ground no.2 is of general nature hence no adjudication is required. 12. Now we take up ground no.4 which has been the second fold of contention of ld.AR that penalty order issued u/s 271D was barred by limitation provided in section 275(1(c) of the Act. To examine this aspect let us first go through the provisions of section 275(1)(c) which reads as under :- Sec.275(1)- No order imposing a penalty under this Chapter shall be passed - (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. 13. Going through the facts ....