TaxTMI 
TaxTMI 
2018 (7) TMI 1251
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....eas ITA No. 1930/Del/2016 challenges the order of Ld. CIT (A), Meerut in deleting penalty of Rs. 12,55,000/- imposed u/s 271E of the Act for assessment year 2004-05. Since both the appeals arise out of an identical issue, they were heard together and they are being disposed of through this common order for the sake of convenience. 2. The brief facts of the case are that the assessee firm had filed its return of income for assessment year 2005-06 declaring a taxable income of Rs. 75,820/-. During the assessment proceedings for assessment year 2005-06 the AO noticed that the assessee firm had accepted loan of Rs. 5 lac from Sri Mohd. Yonus in assessment year 2002-03 and a loan of Rs. 12,55,000/- during assessment year 2004-05 from Sri Mohd. ....
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.... by limitation. 2.4 Now, the department has approached the ITAT against the cancellation of the penalties by the Ld. CIT (A) and has raised the following grounds:- ITA 1929/Del/2016: 1- Whether the Ld. Commissioner of Income tax (Appeals) has erred in law and fact in deleting the Penalty under section 271D of the I.T. Act, 1961, without taking into consideration the fact that said penalty is not barred by limitation as there is no restriction in the Act that penalty under section 271D for violation of section 269SS has to be initiated during the course of assessment proceedings only. 2- Whether the Ld. Commissioner of Income Tax (Appeals) has erred in law and fact in deleting the penalty imposed upon the assessee under section 271D....
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....r initiation of penalty proceedings u/s 271D and 271E of the Act. The Ld. Sr. Departmental Representative further submitted that there is no restriction in the Statute that penalties u/s 271D and 271E have to be necessarily initiated only during the course of assessment proceedings. It was submitted that such an interpretation would render the provisions ineffective. Reference was also made to an order of the Special Bench of ITAT, Chandigarh Bench in the case of Diwan Chand Amrit Lal reported in 98 ITD 200 (Chandigarh) (SB) wherein it was held that the object behind incorporation of sections 269SS and 269T was to counter attempts to circulate black money and if it was to be accepted that penalty proceedings are necessarily to be initiated ....
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....s very well aware about the receipt of alleged loan in cash during the Assessment Years 2004-05 and 2002-03 and the repayment of the loan and but had wrongly initiated the earlier penalty proceedings for A.Y. 2005-06. The Assessment order was passed on 5.10.2007 and the penalties were initiated by the then Additional CIT on 15.11.2010 and the penalty orders were passed on 19.05.2011 and, thus, the imposition of the penalties in the first round was timebarred. The second round of penalty proceedings was initiated on 06/08/2014 after the dismissal of the department's appeals by the ITAT on the ground that the penalties had been imposed in a wrong assessment year. A perusal of the order of the ITAT dismissing the department's appeals in ITA No....