2013 (12) TMI 1665

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....s and arguments qua the issue involved remained identical. 2. In ITA No-5662/Del/2012, the grounds raised by the Revenue read as under :- 1. "Whether in the facts and circumstances of the case, the Ld. Commissioner of Income tax (Appeals) has erred in law in deleting the penalty of Rs. 1755000/- imposed u/s 271D of the IT Act, 1961 holding that the order was erroneous and perverse ignoring that the proceedings under the fiscal statute are not in the nature of judicial proceedings and the execution of jurisdiction in a wrongful manner cannot result in nullity and is a curable defect as held in the case of Deepak Agro Foods Vs State of Rajasthan and others (SC) 2008 TIOL 134-SC CT, while deleting penalty of ground no.1. &....

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....ding, it was found that the assessee firm accepted loans of Rs. 5 lac from Shri Mohd. Yonus during the F.Y. 2001-02 and from Shri Mohd. Farman Malik in cash amounting to Rs. 12,55,000/- during the F.Y. 2003-04, totaling to Rs. 17,55,000/- the same was utilized for the construction of the property of the firm. The loan of Rs. 17,55,000/- as mentioned above was credited to the capital of the partner. The above mentioned amounts were accepted in cash which is in contravention of provisions of section 269SS of the Income Tax Act, 1961. Notice u/s 274 read with section 271 of the Income Tax Act, 1961 dated 15-11-2010 were issued to show cause as to why the penalty u/s 271D of the Income Tax Act may not be imposed upon for the contravent....

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....respect of sale of land. The AO did not take any action at that point of time. However, he again issued notice dated 11.1.2011 for A.Yrs. 2002-03 and 2004-05 for the imposition of penalty u/s 271D. No proceedings for A.Yrs. 2002-03 and 2004-05 were pending before him. In my considered view, all Income-tax proceedings are based on the fundamental principle of a unit year of assessment which is Assessment Year. The AO could not impose a penalty for A.Y. 2005-06 for alleged transactions relating to F.Yrs. 2001-02 and 2003- 04. In any case, the AO could have imposed penalty for A.Yrs 2002- 03 and 2004-05 only if the proceedings for the imposition of penalty were validly initiated for these assessment years. Even such penalty could have been imp....

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....g to any provision of the Act or, a legal precedent, we confirm the finding of the CIT(A) and dismiss the departmental ground. In the result ITA No.-5622/Del/2012 is dismissed. 6. Identical ground has been raised in the ITA No-5663/Del/2012 qua the penalty imposed u/s 271E by the AO again on account of the facts which are pertaining to 2002-03 & 2004-05 assessment years i.e the very same facts. For ready-reference, we reproduce the penalty order hereunder on which reliance is placed by the department:- "The assessee firm filed its return declaring taxable income of Rs. 75,820/-. The asstt. u/s 143(3) was made at Rs. 1,19,470/- on 05-10- 2007. On examination of the details of the case it was found that the assessee firm accepted ....