2019 (3) TMI 220

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....come Tax (Appeals) erred in law and on facts in confirming the penalty u/s. 271 D of the Act to the extent of Rs. 3,50,000/-. 3. That the learned Commissioner of Income Tax (Appeals) erred in law and on facts in not giving proper opportunity to the appellant to prove that the persons who have advanced money for allotment of shares are residing at places where proper banking facilities are not available. 4. That the learned Commissioner Income Tax (Appeals) erred in law and on facts in levying penalty u/s. 271D of the Act even though the loans have been accepted as genuine by the learned assessing officer in the assessment u/s. 143(3) of the Act. 03. The Ld. AR had drawn our attention to the additional ground raised befo....

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.... recommended the initiation of penalty proceedings was taken to be the relevant date as far as section 275(1)(c) was concerned. There was no explanation for the delay of nearly five years in the Additional Commissioner of Income-tax acting on the said recommendation. The court held that the starting point would be the "initiation" of penalty proceedings. Given the scheme of section 275(1)(c), it would be the date on which the Assessing Officer wrote a letter to the Additional Commissioner of Income-tax recommending the issuance of the show-cause notice. While it is true that the Additional Commissioner of Income-tax had the discretion whether or not to issue the show-cause notice, if he did decide to issue a show-cause notice, the limitatio....