TaxTMI 
TaxTMI 
2016 (6) TMI 970
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....onsideration are set out in brief. The assessing officer noticed during the course of assessment proceedings that the assessee has received a loan of Rs. 16.00 lakhs by way of cash and the same has violated the provisions of sec. 269SS of the Act. Accordingly he intimated the same to the Addl. Commissioner of Income tax on 31.12.2008. Subsequently, the Addl. CIT initiated penalty proceedings u/s 271D of the Act by issuing notice on 11.06.2009. Another notice was also issued on 17.08.2009. The penalty order was finally passed on 21.10.2009. 3. The assessee submitted that the amount of Rs. 16.00 lakhs was received from its director named Shri Gautam Patel as advance amount towards sale of flat that is going to be constructed in Bhandup are....
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....e has filed this appeal before us. 6. The first issue relates to the limitation. The contention of the assessee is that the assessing officer has intimated the Addl CIT about the violation of provisions of sec. 269SS of the Act on 31.12.2008 and hence the limitation period should be counted from that date. In this regard, the Ld A.R placed reliance on the decision rendered in the case reported in 287 ITR 239. Accordingly, it was contended that the penalty proceedings should have been completed by 30-06-2009. However, the Ld CIT(A) noticed that the Addl. CIT has initiated proceeding only on 11.06.2009 and hence the penalty proceeding was not barred by limitation. 7. We heard the parties on this issue. A proceeding under the Act can be ....
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....sing officer. Further the assessing officer has only intimated about the violation to the Addl CIT on 31.12.2008. The Addl. CIT, under the Act, may accept the recommendation of the AO or he may reject the same. Accordingly, we are of the view that the intimation given by the AO cannot be considered to be initiation of penalty proceeding u/s 271D of the Act. Further, as stated earlier, the penalty proceedings can be said to have been initiated only when the notice relating to the same are issued to the assessee. Accordingly we agree with the view of the tax authorities that the penalty was initiated in the instant case only on 11.06.2009. The time limit for completion of the penalty proceedings as per sec. 275(1)(c) shall be either 31.3.2010....
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....mount received as advance has been used to meet the labour payments for development work. (f) The genuineness of transactions was not doubted. 10. Section 273B provides that the penalty u/s 271D of the Act shall not be imposable if the assessee proves that there was reasonable cause for the said failure. Thus the penalty u/s 271D of the Act shall not be levieble, if the assessee shows that there was a reasonable cause for accepting the loan or deposit by way of cash. We notice that the assessee has only contended before the tax authorities that the impugned amount was received as advance towards sale of flat. Before us, the assessee has raised some more contentions, which were not examined by the tax authorities. With regard to the ob....