TaxTMI 
TaxTMI 
2002 (3) TMI 211
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....ssessment proceedings, the Assessing Officer noticed that the assessee had accepted cash deposits/loans of Rs. 18,850 in violation of provisions of section 269SS and also repaid such deposits aggregating to Rs. 47,900 in violation of provisions of section 269T. He, therefore, initiated penalty proceedings under sections 271D and 271E at the time of completing the assessment on 30-12-1994. Since the penalties for such defaults were imposable by the DCIT (now Jt. Commissioner of Income-tax), the Assessing Officer referred the case to the DCIT vide her letter dated 30-12-1994. The DCIT initiated penalty proceedings by issue of show-cause notices under sections 271D and 271E on 13-1-1995. In reply to the show-cause notices, the assessee submitted that it had received/repaid certain amounts in cash from/to M/s. Vishal Lime Industries, a sister concern of the assessee in which partners of both the firms were related to each other. The assessee was under a bonafide belief that provisions of sections 269SS and 269T were attracted only if single receipt or repayment exceeded Rs. 20,000. In this case, each receipt and payment was far below Rs. 20,000 and, therefore, the assessee was under th....
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.... allowed. Since the levy of penalties have been hold to be not justified and have been called, it is not considered necessary to adjudicate in respect of other grounds of appeal and the appeals are treated as allowed in view of the finding given in respect of ground No. 6 above." The CIT(A) further held that since penalties imposed have been cancelled, there is no need for adjudicating the appeal relating to the order under section 154. Aggrieved, the revenue has preferred these appeals before us. 4. Ld. D.R. heavily relied on the orders of the Assessing Officer in imposing penalties. He submitted that as per provisions of sections 271D and 271E, powers to impose penalties are vested only with the Joint Commissioner of Income-tax (then Deputy Commissioner of Income-tax). He submitted that the Assessing Officer had no authority to initiate and impose penalties he also drew our attention to the respective penalty orders passed by the DCIT Range, Ambala where he has specifically referred that these proceedings wore initiated by his predecessor after recording his satisfaction and notices were duly issued on 13-1-1995. He submitted that the authority competent to impose penalties....
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.... to impose penalty under these sections is vested with the Joint Commissioner (earlier Deputy Commissioner). Section 275(1)(c) is applicable to the facts of the present cases and the same prescribes time limit for completing the penalty proceedings i.e. after expiry of financial year in which proceedings in the course of which action for the imposition of penalty has been initiated, are completed or six months from the end of the month in which action for imposition of penalty is initiated whichever period expires later. Now the question which requires to be considered by this Bench is whether the date of initiation of penalty proceedings should be reckoned as 30-12-1994 i.e. the date when the assessment for the assessment year was completed and the Assessing Officer had issued directions for initiation of such proceedings or the date when the Deputy Commissioner, Ambala Range i.e. authority competent to impose penalty under this section, had initiated proceedings by issue of notices on 13-1-1995. If the date of initiation of penalty proceedings is reckoned as 13-1-1995, the orders passed under sections 271D and 271E on 25-7-1995 would be within time, but if the date is reckoned as....
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.... no authority can be said to have assumed jurisdiction to do an act and conferment of jurisdiction is pre-requisite for the exercise of the power. In this case, the date on which the DCIT recorded his satisfaction and issued notices calling upon the assessee to show-cause why penalties under sections 271D and 271E should not be imposed, would be the date when the proceedings can be said to have been initiated. The Assessing Officer who had no authority to levy such penalties, was not competent to initiate such proceedings at the time of completing the assessment. The Assessing Officer had rightly referred the case to DCIT on the same date i.e. 30-12-1994 for consideration and levy of penalties under sections 271D and 271E. 8. It may further be mentioned that sub-section (2) of section 274 imposes certain restrictions on the powers of the Assessing Officer and the ACIT in imposing penalties under Chapter XXI and such authorities can impose penalties only with the prior approval of the Jt. Commissioner of Income-tax. The monetary limit prescribed for the ITO and the ACIT is Rs. 10,000 and Rs. 25,000 respectively but under sections 271D and 271E, these authorities have not been giv....