TaxTMI 
TaxTMI 
2022 (8) TMI 938
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 2. Without prejudice to the above, the Hon'ble CIT(A) has also erred in law and on facts in confirming the penalty amount of Rs. 37.50 Lakhs as the Ld. Assessing Officer has not been satisfied in the body of the assessment order in respect of amount of Rs. 15 Lakhs for levy of penalty nor the Ld. J.C.I.T has been satisfied and he has mentioned in the show cause notice about levy of penalty in respect of only two amounts i.e. Rs. 12.50 Lakhs and Rs. 10 Lakhs and not for Rs. 15 Lakhs. Thus, both the authorities not satisfied to levy of penalty on Rs. 15 Lakhs which is not initiated at all. 3. The Hon'ble CIT(A) has also erred in law and on facts in not considering the case property on merits. 4. The Hon'ble GIT(A) has also erred in law and on facts in not considering the spirit of the law which is explained by the Hon'ble Finance Minister at the time of introducing the provisions of Sec. 269SS during the course of Budget Speech on Finance Act, 1984. The Hon'ble C.B.D.T has also in its Circular No. 387 dated 06/07/1984 elaborately explained. The Speech and intention of inserting the provisions of Sec. 269SS at Para - 32.1 and 32.2 which is....
X X X X Extracts X X X X
X X X X Extracts X X X X
....of creditworthiness of the parties and genuineness of the transaction does not arise. However, the Joint Commissioner in the 271D proceedings rejected the contention of the assessee and held that since the assessee is a manager of a cooperative bank and has himself submitted that part of the loan from both his father and wife were received by way of cheques , which implies that both the lenders had bank accounts and hence it is not the case that money had to be accepted in cash on account of lack of banking facilities. During the course of 271D proceedings, Ld. Joint Commissioner further observed that the assessee had further taken a loan of Rs.15,00,000/- from one Mr. Mahispatsinh in cash in contravention of provisions of section 269SS of the Act about which he never informed during the course of assessment proceedings. In response to assessee's challenge to 271D proceedings on the grounds of limitation, the Ld. JCIT dismissed the same on the ground that the order was passed within 6 months from the issuance of notice and hence the same was not barred by limitation. Accordingly, the JCIT imposed a penalty of Rs.37.5 lakhs, equivalent to the amount of sum received in cash. 4. Be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ention of the assessee that the order u/s 271D of the Act is barred by limitation. The case laws cited by the assessee are distinguishable on facts, since in the case of CIT v Hissaria Brothers 386 ITR 719 (Supreme Court), CIT v Hissaria Brothers 291 ITR 244 (Raj) and Hissaria Brothers v JCIT 73 TTJ 1 (Jodhpur), on which reliance has been placed by the assessee, the assessing officer had initiated proceedings under section 271D of the Act during the course of assessment proceedings itself. However, after a few years the Joint Commissioner of Income Tax had given the approval for initiating 271D proceedings. The issue for consideration was whether the period of limitation started from the date when the assessing officer (during the course of assessment proceedings itself) had initiated penalty proceedings u/s 271D of the Act or whether the period of limitation could be extended till 6 months from the date when the Joint Commissioner subsequently granted approval after a few years. In the light of the above facts, the court held that issuance of notice of initiation of penalty under section 271D of the Act may appropriately and validly be made by the assessing officer without necessi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e of the notice issued by the Joint Commissioner. From the statutory provision, it is clear that the competent authority to levy penalty being the Joint Commissioner. Therefore, only the Joint Commissioner can initiate proceedings for levy of penalty. Such initiation of proceedings could not have been done by the Assessing Officer. The statement in the assessment order that the proceedings under sections 271D and 271E are initiated is inconsequential. On the other hand, if the assessment order is taken as the initiation of penalty proceedings, such initiation is by an authority who is incompetent and the proceedings thereafter would be proceedings without jurisdiction. If that be so, the initiation of the penalty proceedings is only with the issuance of the notice issued by the Joint Commissioner to the assessee to which he has filed his reply". Therefore, in our considered view, the 271D order is not barred by limitation and as validly pointed out by the Ld. CIT(A) in his order, the Joint Commissioner, who is the prescribed authority to initiate 271D proceedings, has passed order within the period of limitation prescribed i.e. within 6 months from the end of the month from the dat....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ection 269SS. The Delhi ITAT in the case of ACIT v Vardaan Fashion [2015] 60 taxmann.com 407 (Delhi - Trib.) held that acceptance of cash by husband from his wife cannot said to be taking of loan or advance in strict sense of section 269SS and therefore, no penalty under section 271D could be levied. In the case of Smt. Kusum Dhamani [2014] 47 taxmann.com 143 (Jaipur - Trib.), ITAT held that where assessee running a proprietorship concern, took cash loans from her husband carrying on another proprietorship business on account of business exigencies for making payments to labourers and lenders, there being no violation of provisions of section 269SS, impugned penalty order passed under section 271D was to be set aside. In the case of ITO v. Tarlochan Singh [2003] 128 taxman 20 (Asr.) (Mag.) penalty under section 271D was levied on ground that assessee had received loan of Rs. 70,000 in cash from his wife for investment in acquisition of immovable properties. Wife had given money to husband for prosperity of family only and there was no evidence that amount in question was taken for commercial use. Though revenue considered it loan, but there was no material on record to show that as....
X X X X Extracts X X X X
X X X X Extracts X X X X
..../-, the assessee did not disclose the fact of receipt of Rs.15 lakhs from Mr. Mahispatsinh during the course of assessment proceedings. The same is evident from observations made by the assessing officer at page 11, paragraph 10.1 and 10.2 wherein the assessee did not disclose any details in respect of the loan of Rs.15 lakhs mentioned above. In para 10.2 of the assessment order, the assessing officer has noted that the assessee has filed an affidavit to the effect that he has taken cash loans of Rs.12,50,000 from his wife and 10 lakh from this father. In the affidavit, there was no mention of receipt of Rs.15 lakhs from Mr. Mahispatsinh. Thus, from the facts it becomes clear that the assessee has deliberately chosen not to disclose any details in connection with the receipt of Rs. 15 lakhs from Mr. Mahispatsinh during the course of assessment proceedings and specially when the assessee was required to furnish details of cash taken in contravention of provisions of section 269 SS of the Act. Therefore, there was no occasion for the assessing officer to issue a show cause notice in respect of this above receipt of Rs.15 lakhs since the assessee had deliberately not disclosed t....