TaxTMI 
TaxTMI 
2026 (1) TMI 1631
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....counted cash being operated at the premises of such enterprises. As per information available, the Assessee has received amount of Rs. 64,25,000/- during the A.Y. under consideration, as cash loan from the alleged party. 3. Consequently, notice dated 30.03.2021 under Section 148 of the Act was issued to the Assessee, in response to which the Assessee filed his return of income dated 23.04.2021 declaring total income of Rs. 24,62,230/-. 4. Thereafter, notice dated 10.12.2021 under Section 143(2) was issued to the Assessee by the Jurisdictional Assessing Officer (JAO). 5. Subsequently, the Assessing Officer initially issued a notice dated 12.01.2022 under Section 142(1) of the Act and therefore show cause notices dated 03.02.2022 and 08.03.2022, however, the Assessee made no compliance to the aforesaid notices and thus in the constrained circumstances and having left no option, the AO completed the reopened assessment under "best judgment" based on the information collected and available on record and ultimately, made the addition of Rs. 64,25,000/- under Section 69A of the Act being unexplained cash loan received from M/s Evergreen Enterprises. 6. The Assessing Officer s....
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....nder Section 271D, levied a penalty of Rs. 64,25,000/- under such section. 11. The Assessee being aggrieved challenged the said penalty being imposed by the Assessing Officer vide penalty order dated 26.09.2022 by filing the first appeal before the Ld. Commissioner. 12. Before the Ld. Commissioner the Assessee made following submissions: 3. Submission of the Appellant: The submission made by the appellant is reproduced as under: - "1. Your appellant is an Individual appellant having Income from House Properties, Proprietary Business and other sources. 2. The Return of Income was filed on 10th September 2016 declaring Total Income Rs. 24,62,230/- after claiming deduction under Chapter VI A of Rs. 1,60,148/-. 3. The return for A.Y 2016-17 was selected for reopening of assessment u/s 148 vide Notice dtd. 31-Mar-2021. 4. Your Appellant had filed the Return of Income again on 23rd April 2021 for AY 2016-17 in response to the Notice u/s 148. However there was no change in the return filed on 23rd April 2021 as compared to Original return filed on 10th September 2016 having total Income of Rs. 24,62,230/-. 5. The Case was reopene....
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....nce of such cash loans and contends that the penalty is premature, unjustified, and procedurally flawed. After carefully considering the facts of the case, the order of the AO, the grounds of appeal, and the submissions made by the appellant, the following findings are recorded: i. Applicability of Section 269SS and Section 271D:- Section 269SS mandates that no person shall accept any loan or deposit of Rs. 20,000 or more otherwise than by account payee cheque or bank draft. Violation of this Section attracts penalty under Section 271D equal to the amount so accepted. The AO has brought on record evidence in the form of statements of Mr Nilesh Bharani, Mr Ashwin Rathod, Mrs. Vibha Sachin Rawate, and other employees during the search in M/s Evergreen Enterprises, documents evidencing ledger entries and transaction details indicating acceptance of cash loans by the appellant. These form a prima facie and credible basis for concluding that the appellant had accepted cash loans in contravention of Section 269SS. ii. Retraction of Statement: The appellant has placed reliance on the retraction affidavit of Mr. Nilesh Bharani dated 14.10.2017. However, ....
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....filed against the assessment order/addition made by the A.O. has ultimately, deleted the aforesaid addition of Rs. 64,25,000/- in I.T.A. No. 440/Mum/2024 & ors, relevant for the assessment year 2016-17, decided on 12.06.2024, by observing and holding has under: 8. We heard the rival submission and considered the documents available on record. The assessment was initiated against notice U/s 148. The observation in 'recorded reason' is itself erroneous. The addition of un-explained cash loan is contradicting the violation of Section 269SS r.w.s. 271D related penalty. The entire assessment & addition is based on the statement of the partners of M/s Evergreen Enterprises. No other evidence is brought to record by the Id. AO. The issue is squarely covered by the order of assessee's own case for AY 2012-13 bearing ITA No. 3081/Mum/2022 (supra). We respectfully relied on the order of the Sanjiv Amritlal Cheda (supra)&the order of Coordinate Bench of ITAT Mumbai. The Id. DR unable to bring any contrary fact against the submission of the Id. AR. In our considered view we set aside the impugned appeal order. The addition U/s 68 of the Act amounts to Rs. 66 lakh is quashe....
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....us and while relying on the decision of the Hon'ble Coordinate Bench of the Tribunal, in the Assessee's own case for the AY 2012-13, ultimately quashed the addition made under Section 68 of the Act. 20. We further observe that in the assessment order dated 22.03.2022 under Section 147 read with Section 144 (B) of the Act, the AO has not recorded clear cut satisfaction with regard to the initiation of the penalty proceedings under Section 271 (D) of the Act and thus, attracts the judgment of the Hon'ble Apex Court in the case of CIT vs. M/s. Jaya Laxmi Rice Mills (2015) 379 ITR 521 (SC) wherein the Hon'ble Apex Court has held as under: "In these appeals, we are concerned with the question as to whether penalty proceeding under Section 271D of the Income Tax Act (hereinafter referred to as "the Act") is independent of the assessment proceeding and this question arises for consideration in respect of Assessment Years 1991-1992 and 1992-1993 under the following circumstances: In respect of Assessment Year 1992-1993, assessment order was passed on 26.02.1996 on the basis of CIB information informing the Department that the assessee is engaged in large scale purchase....
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.... identical issue has also been dealt with by the Hon'ble Coordinate Bench of the Tribunal in the case of Ravi Nirman Nigam Ltd. vs. ACIT, Circle 13 (3) (1) (ITA No. 4140, 4141 and 4121/M/2023 decided on 25.06.2024 and while following the judgment of the Hon'ble Apex Court in the case of CIT vs. M/s. Jaya Laxmi Rice Mills, ultimately deleted the identical penalty levied under Section 271 (D) and 271 (E) of the Act and by observing and holding as under: 9. We have heard the rival contentions and perused the material on record. Admittedly, it is a fact on record that the reassessment proceedings, u/s. 147 of the Act in the course of which penalty proceedings u/s. 271D and 271E were initiated have been quashed as void ab initio by the Co-ordinate Bench. This fact was put forth before the ld. CIT(A) by the assessee but has been negated to upheld the penalty imposed by the ld. Assessing Officer. Based on these facts, we have perused the order of the Hon'ble Apex Court in the case of Jaya-lakshmi Rice Mills (supra), and find that it clearly applies in the present case to hold that with the quashing/annulling of the reassessment order passed in the case of the assessee by the ....
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....do not survive once the assessment is held to be invalid. The relevant observations of the Tribunal from para 9 to 10.1 read as under: "9. We have heard the rival contentions and perused the material on record. Admittedly, it is a fact on record that the reassessment proceedings, ws. 147 of the Act in the course of which penalty proceedings u/s. 271D and 271E were initiated have been quashed as void ab initio by the Co-ordinate Bench. This fact was put forth before the ld. CIT(A) by the assessee but has been negated to upheld the penalty imposed by the ld. Assessing Officer. Based on these facts, we have perused the order of the Hon'ble Apex Court in the case of Jayalakshmi Rice Mills (supra), and find that it clearly applies in the present case to hold that with the quashing/annulling of the reassessment order passed in the case of the assessee by the ITAT, the penalty initiated there in ws. 271D did not survive. 10. We also take note of the distinguishing facts brought before us in respect of the judicial precedents relied upon by the Id. Sr. DR and we agree with the same. We also note that the contentions put forth by the Id. Sr. DR have been dealt with by ....