TaxTMI 
TaxTMI 
2023 (11) TMI 1283
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.... heard the rival submissions and perused the materials available on record. The assessee had received Rs. 10,00,000/- and Rs. 1,17,50,000/- in cash in Asst. Years 2009- 10 and 2010-11 respectively from Sh. Sanjay Bansal. The Ld. AO completed quantum assessment proceedings for AY 2009-10 u/s 153A r.w. sec. 143(3) of the Act on 30/03/2015. The Ld. CIT (A) while disposing of the appeal for AY 2011-12 in his order dated 28/02/2018 had directed the Ld. AO to recommend the JCIT for initiation of the proceedings of penalty u/s 271D r.w. sec 269SS of the Act in respect of cash receipt of loans from Mr. Sanjay Bansal in AY 2009-10 and 2010-11 by the assessee. Accordingly, the Ld. AO made a reference to Ld. JCIT for initiation of the penalty proceedings on 25/03/2017. The Ld. JCIT passed the penalty order u/s 271D of the Act levying penalty in the sums of Rs. 10,00,000/- and Rs. 1,17,50,000/- for AY 2009-10 and 2010-11 respectively for violation of provisions of section 269SS of the Act. Now, the short for question that arises for our consideration is as to whether the said penalty order passed by the Ld. JCIT on 29/11/2017 is within the time prescribed under the statute.....
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....o be reckoned from the date of issuance of first notice by Ld. JCIT which was done on 11/08/2017. We find that the law is very clear that penalty proceedings u/s 271D and 271E of the Act are to be initiated by the Ld. AO by recommending the same to Ld. JCIT and, thereafter, the Ld. JCIT shall issue show cause notice to the assessee and pass penalty orders thereon u/s 271D and 271E of the Act. Hence, the due date had to be reckoned only from the date of triggering of the proceedings from the side of the Ld. AO to Ld. JCIT. Admittedly, the Ld. AO had made reference to Ld. JCIT on 25/03/2017 for initiating penalty proceedings in the instant appeals. Six months from the end of the month in which the action for imposition of penalty is initiated expired on 30/09/2017. Accordingly, the penalty order framed on 29/11/2017 would become barred by limitation as per provisions of section 275(1)(c) of the Act. 5. Our aforesaid view is further fortified by the decision of Hon'ble Jurisdictional High Court in the case of PCIT vs. Rishikesh Buildcon (P) Ltd. reported in 451 ITR 108 (Delhi), wherein the following facts were prevalent:- (a) Quantum Proceedings were completed in December ....
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....hile it is true that the ACIT had the discretion whether or not to issue the SCN, if he did decide to issue a SCN, the limitation would begin to run from the date of letter of the AO recommending 'initiation' of the penalty proceedings." (Emphasis Supplied) 9. The legal principle for determining the date of initiation of penalty proceedings has been settled by the predecessor bench of this Court in its decision of JKD Capital & Finlease Ltd. (supra) which reads as under: - "2...While finalising the assessment order dated December 28, 2007 the Assessing Officer ("the AO") in the concluding paragraph issued a direction to initiate proceedings against the assessee under sections 271(1)(c) and 271E of the Act. Admittedly, under section 271E(2) of the Act, any penalty under section 271E(1)can only be imposed by the Joint Commissioner of Income-tax ("the Joint CIT"). Consequently, the Assessing Officer referred the matter to the Additional Commissioner of Income-tax. 3. A perusal of the order dated March 20, 2012, of the Additional Commissioner of Income-tax shows that a show-cause notice initiating penalty proceedings under section 271E was issued t....
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....0, 2008.' (Emphasis Supplied) 10. The contentions urged by the learned counsel for the Revenue in the present appeals are therefore reiteration of pleas which have been categorically rejected by the predecessor bench of this Court in the aforesaid judgments. 11. In the present appeals, a perusal of the assessment order(s) shows that the penalty proceedings were initiated by the AO in the assessment order(s) itself. Illustratively, the direction contained in the assessment order dated 17th December, 2008, pertaining to ITA No. 577/2018, Rishikesh Buildcon Pvt. Ltd. may be referred to, which reads as under:- "... Initiate penalty proceedings u/s, 271(1)(c) for concealment of income & 271(1)(b) for non-compliance of statutory notices, & 271 D for violating the provisions of Section 269 SS as discussed above." 12. The predecessor bench of this Court in the aforesaid judgments has held that where the AO has initiated the penalty proceedings in his/her assessment order, the said date is to be taken as the relevant date as far as the section 275(1)(c) of the Act is concerned. In these cases, the quantum proceedings were completed by the AO o....