TaxTMI 
TaxTMI 
2016 (5) TMI 416
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....ng the order of the AO and ignoring the fact that the said order is barred by limitation. 2. BECAUSE, ld. CIT(A) has erred in law in upholding the order of the AO and ignoring the fact that the said order is invalid since no valid notice was issued u/s. 274 r.w.s. 269T of the Act for initiating penalty proceedings. 3. BECAUSE, ld. CIT(A) has erred in law in ignoring the fact that the order passed by the AO is invalid since there is no finding made in the order that any "loan" or "deposit" amounting to Rs. 41,00,000/- has been received by the appellant in respect of which the payment has been made in contravention of provisions of section 269T of the Act. 4. BECAUSE, ld. CIT(A) has erred in law....
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....Compromise on 30.8.2010 cancelling the earlier MoU dt. 11.12.2008 for extra amenities. The Sadhwanis had made a further payment of Rs. 3.78 crores for the flat and as part of compromise terms, an amount of Rs. 41,00,000/- collected on account of extra amenities forming part of the initial payment of Rs. 1,49,40,000/- was refunded to Sadhwanis in the form of bearer cheques. However, in the assessment order the AO recorded reasons for initiation of penalty u/s 269T in respect of refund of deposit to Shri Haresh Sadhwani and Smt. Roma Sadhwani. In reply to the AO's notice, assessee replied as under : "In reply to your contention that Rs. 41,00,000/- repaid to Mrs. Haresh J. Sadhwani why should not be added to income u/s 269....
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.... accept assessee's contention and levied penalty u/s 269T r.w.s. 271E. 4. By the impugned order, CIT(A) affirmed the action of the AO against which the assessee is in further appeal before us. 5. It was argued by the ld. AR that limitation for imposition of penalty as per Sec. 275(1)(c) is 6 months from end of month in which action for imposition of penalty initiated. The assessee invited our attention to the fact that penalty proceeding was initiated from the date of assessment order i.e. 30.12.2011, therefore, limitation expires on 30.6.2012. Our attention was invited to the discussion made by the AO regarding alleged violation of Sec. 269SS and 269T in his assessment order. Thereafter, AO referred the matter to JCIT f....
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....in the case of Jitendra Singh Rathore and contended that judgment in the case of M/s. Lodha Builders Pvt. Ltd. read with judgment of Rajasthan High Court in the case of Jitendra Singh Rathore effectively over ruled the judgment in the case of Dewanchand Amrit Lal which has been relied upon by the revenue. Reference was invited to the judgment of ITAT, Mumbai in the case of Ranisati Paper Mills Pvt. Ltd. which expounding on the hierarchical system of courts in India had ruled that judgment of any High Court, even non jurisdictional shall prevail over judgment of any bench of ITAT. It was also submitted that the impugned order of CIT(A) confirming the penalty was passed on 28.2.2014 when the benefit of Lodha's ratio was not available. ....
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.... and the penalty has been initiated by the AO vide his order dt. 30.12.2011. 9. In the case of Lodha Builders Pvt. Ltd., 106 DTR 226, the coordinate Bench observed as under :- ".......... any case where AO made a reference in the assessment order, after discussing the same with the assessee during the regular assessment proceedings or made a referral to the Addl. CIT for imposition of the penalty. In our opinion, these preliminary acts constitute action for the imposition of penalty'. An action for imposition of penalty is always anterior in time to the 'actual' imposition of the penalty. In our opinion, the AO's discussion given in para 6 of the assessment order and AO's letter dated 11th January, 2012 to ....