TaxTMI 
TaxTMI 
2022 (12) TMI 1446
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....s an assessee under the Act having the status of an individual. For the assessment year 2016-17, petitioner was assessed by respondent No.2 being the assessing officer vide the assessment order dated 24.03.2022 under Section 153A of the Act. Total income returned by the petitioner i.e., Rs. 80,84,180.00 was accepted as the assessed income of the petitioner vide the aforesaid assessment order. 4. However, respondent No.1 issued show cause notice to the petitioner on 13.05.2022 under Section 274 r/w Section 271D of the Act. It was mentioned therein that petitioner had sold immovable properties for an amount of Rs. 92,13,000.00, the details of which were mentioned in the show cause notice. After noting that petitioner had admitted long term capital gains in the return of income, it was mentioned that petitioner had accepted cash to the tune of Rs. 87,80,000.00. It was alleged that such a transaction otherwise than by an account payee cheque or use of electronic clearing system through a bank account etc., violated Section 269SS of the Act which attracted levy of penalty under Section 271D of the Act. Accordingly, an opportunity was granted to the petitioner to show cause as well as....
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....r is listed today. 9. Learned Senior Counsel for the petitioner has drawn the attention of the Court to the provisions of Section 271D as well as Section 271E of the Act. He submits that not only the two provisions are in para materia, rather Section 271E can be said to be complimentary to Section 271D of the Act. While penalty under Section 271D of the Act is imposable on a person accepting loan or deposit in contravention of the provisions of Section 269SS of the Act, Section 271E of the Act would be attracted or applicable on a person making the loan or deposit. 10. Referring to the decision of the Supreme Court in Jai Laxmi Rice Mills Ambala City (1 supra), learned Senior Counsel for the petitioner submits that in the facts of that case, order of penalty was passed under Section 271E based on the original assessment order; however, the original assessment order was set aside in appeal; therefore, the satisfaction recorded in the original assessment order no longer survived; in the absence of such satisfaction, penalty proceedings under Section 271E of the Act would also not survive; the view taken by the High Court was accordingly upheld whereafter, it was clarified that ....
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.... deposit or specified sum is twenty thousand rupees or more. However, as per the first proviso, the rigor of Section 269SS is not applicable to the Government, banking company, post office savings bank or cooperative bank etc. As per the second proviso, this provision would also not be applicable where both the depositor and the receiver are having agricultural income and neither of them has any income chargeable to tax under the Act. 18. Section 271D of the Act deals with penalty for failure to comply with the provisions of Section 269SS of the Act. Section 271D of the Act being relevant is extracted hereunder: Penalty for failure to comply with the provisions of section 269SS. 271D. (1) If a person takes or accepts any loan or deposit [or specified sum] in contravention of the provisions of section 269SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit [or specified sum] so taken or accepted.] [(2) Any penalty imposable under subsection (1) shall be imposed by the [Joint] Commissioner.] 19. Thus, what sub-section (1) of Section 271D provides for is that if a person takes or accepts any loan or deposit....
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.... While Section 271D of the Act would be attracted on a person accepting loan or deposit or specified sum in contravention of Section 269SS of the Act, penalty under Section 271E of the Act would be imposable on a person who makes or repays the loan or deposit or specified advance in contravention of Section 269T. Therefore, in a way, the two provisions are complimentary to each other. 23. In Jai Laxmi Rice Mills Ambala City (supra), Supreme Court considered the question as to whether penalty proceedings under Section 271D of the Act is independent of the assessment proceeding ? In the facts of that case, it was found that the penalty order was issued following the assessment order. However in appeal, Commissioner of Income Tax (Appeals) had set aside the original assessment order with a direction to frame assessment de novo. In the fresh assessment order, no satisfaction was recorded by the assessing officer regarding initiation of penalty proceedings under Section 271E of the Act. It was noticed that the penalty order was passed before the appeal of the assessee was allowed by the Commissioner of Income Tax (Appeals). It was in that context that Supreme Court held as follows: ....