TaxTMI 
TaxTMI 
2016 (8) TMI 810
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....of the Hon'ble CIT(A) is liable to be cancelled. 3. The Hon'ble CIT(A) ought to have observed that the Addl. CIT without considering the relevant facts properly proceeded to levy penalty of Rs. 22,20,000/- and therefore ought to have deleted the penalty. 4. The Hon'ble CIT(A) ought to have observed that the Assessing Officer without discussing any facts as to how he was not satisfied with the explanation of the assessee or without passing any speaking order proceeded to levy the penalty and therefore the same is liable to be deleted." 2. The brief facts of the case are that the assessee is in individual and has share income and also agricultural income. As per paper book page No. 27 and 28, the assessee is also drawing remuneration and interest from Narendra Wines, Srinidhi Wines, Sai Ram Srinidhi Wines and Sai Srinivasa Wines. For the A.Y. 2007-08, the assessee filed his return of income on 14/05/2008 declaring total income of Rs. 4,40,140/- and agricultural income of Rs. 3,84,000/-. The case of the assessee was selected for scrutiny. During the course of scrutiny assessment, the assessee furnished confirmation letter from various cash creditors. Details of which, is as un....
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....iation of penalty, therefore, penalty U/s 271D, the initiation of penalty by the officer was held to be in accordance with law. For the sake of gravity and propriety, paragraph No. 5.4 to 5.8 of the ld CIT(A)'s order are reproduced hereunder: "5.4 In CIT Vs. Hissaria Bros. (2007) 291 ITR 244, Hon'ble High Court has held as under:- '27. We are, therefore, of the opinion that since penalty proceedings for default in not having transactions through the bank as required under ss. 269SS and 269T are not related to the assessment proceedings but are independent of it, therefore, the completion of appellate proceedings arising out of the assessment proceedings or the other proceedings during which the penalty proceedings under ss. 271D and 271E may have been initiated has no relevance for sustaining or not sustaining the penalty ..." (emphasis supplied). 5.5 Thus initiation of penalty proceedings for default under ss 269SS and 269T is not linked to the assessment proceedings but once initiated it has to be completed within 6 months of initiation. as prescribed in sec 275(1)(c). Thus the assertion of the appellant that the penalty proceedings U/s 271D has to be initiated....
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....is a well settled principle in law that the Court cannot read anything into a statutory provision which is plain and unambiguous. A statute is an edict of the legislature. The language employed in a statute is the determinative factor of legislative intent. The first and primary rule of construction is that the intention of the legislation must be found in the words used by the legislature itself. The question is not what may be supposed and has been intended but what has been said." It has further been held, "while interpreting a provision the Court only interprets the law and cannot legislate it. If a provision of law is misused and subjected to the abuse of process of law, it is for the legislature to amend, modify or repeal it, if deemed necessary." Their Lordships further held that a statute must be construed with reference to the context and other clauses thereof. In the present case, considering the context in which the provisions of ss. 269SS and 269T and consequentially incorporation of Ss. 271D and 271 E, we are of the considered view that non-prescribing the limit for initiation of penalty proceedings is conscious and there is neither any necessity nor are we empowered t....
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....al held that it is not empowered to prescribe any limitations which the legislature has consciously not prescribed. Therefore the Special Bench of the Tribunal held that penalty proceedings under Section 271D and E can be initiated only by the Joint Commissioner and the limitation for levy of penalty, starts only after he has initiated the penalty proceedings. The upshot of the above analysis is that the initiation of proceedings for levy of penalty under section 271D can be made only by Joint Commissioner and the limitation for levy of penalty has to be reckoned as provided in section 275(1)(c) of the Act from the date of initiation by the joint Commissioner. As to your specific question "What is the time limit to initiate the penalty proceedings u/s. 271D" if you go by the order of the Special Bench of ITAT cited above, there appears to be no time limit for issue of the notice [or initiation of penalty proceedings. " 5.8 Thus, going by the order of the Special Bench of ITAT and other decisions cited above, there is no time limit for issue of the notice for initiation of penalty proceedings u/s 271D. Hence, contentions of the appellant are not accepted." 6. We have gone th....
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....t be asked to explain the same in the penalty proceedings. It was contended that the explanation given by the assessee during the course of assessment proceedings were duly accepted by the ld A.O. therefore, the same set of facts and circumstances, the assessee cannot be penalize U/s 271D of the Act for violation of Section 269SS of the Act. It was submitted that the assessee has submitted the confirmation letter from 5 person and were able to prove the creditworthiness, genuineness, identity and source of cash deposit. The Ld AR relied upon the order of the Hon'ble Allahabad High Court in the case of CIT Vs. Dimple Yadav in ITA No. 174 of 2015 order dated 21/08/2015 and it was submitted that the facts in the said case were similar to the facts in the present case and despite that the Hon'ble Allahabad High Court has restricted the explanation given by the assessee and have deleted the penalty order issued U/s 271D of the Act. The ld AR also relied on the various other judgments including the judgment of the Hon'ble Hyderabad Bench in the case of The Citizen Co-operative Society Limited, Hyderabad Vs Addl.CIT passed in ITA No. 1156/Hyd/2009 with other cases order dated 26/02/2010,....