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TMI Blog2004 (3) TMI 382X X X X Extracts X X X X X X X X Extracts X X X X ..... eviable and accordingly, the penalty levied under section 271D may be cancelled." 3. The main issue in this case is as to whether the penalty order passed by the Addl. CIT, Range-2, Jalgaon on 13-3-2000 is barred by limitation. Briefly stated, the facts of the case are that during the course of assessment proceedings, the Assessing Officer (DCIT, Inv. Cifr. 2(1), Jalgaon) noticed that the assessee had accepted loans/deposits by otherwise than account payee cheque/demand draft contravening the provisions of section 269SS of the Act. The details of loans/deposits accepted by the assessee are as under: ----------------------------------------------------------------- S. Name of the persons from whom loan Amount Date on No. taken in cash which accepted ----------------------------------------------------------------- 1. Smt. Chhagandevi Puglia Ramganj 30,000 15-6-1995 -do- 10,000 25-7-1995 2. Smt. Rajudevi Puglia 30,000 30-5-1995 -do- 10,000 26-7-1995 -do- 25,000 11-11-1995 -do- 20,000 1-12-1995 3. Smt. Panadevi Sethia 25,000 15-5-1995 4. Chhatramal Chhajed 10,000 29-7-1995 -do- 15,000 1-12-1995 -do- 30,000 4-3-1996 -do- 20,000 18-3-1996 5. Shri Madanlal Chhaj ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that there was no force in the contention of the assessee that the penalty order passed by the Addl. CIT was time barred. According to him, proceedings under section 271D are independent of assessment and the same should not be taken as commencing along with the assessment order. He also rejected this contention of the assessee that default was on account of ignorance of law. According to him, the directors of the assessee company were well acquainted with the provisions of law. He further observed that copies of accounts of the depositors submitted by the assessee clearly revealed that the assessee had paid interest to the depositors. He also rejected the plea of the assessee that the amounts in question were kept in current account and were received on transfer. Finally, he observed that this is a clear case of contravention of provisions of section 269SS of the Act. In view of the above, the ld. CIT(A) confirmed the penalty imposed by the Addl. CIT under section 269SS read with section 271D of the Act. 6. Now, the assessee is in further appeal before this Bench of the Tribunal against the order of the CIT(A)-1, Nagpur. 7. Before us, Shri S.U. Pathak, the ld. Counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was submitted by the ld. Counsel for the assessee that the impugned penalty may be cancelled. 8. Shri M.M. Srivastava, the ld. DR strongly supported the orders of the authorities below. 9. We have carefully considered the rival submissions, and have also perused the orders of the authorities below. We have also gone through the relevant provisions of law to which our attention was drawn during the course of hearing of the appeal. It is noticed that in this case the Assessing Officer, i.e., Dy. CIT, Inv. Cir. 2(1) Jalgaon observed in the assessment order dt. 30-3-1999 relating to the assessment year under consideration that, "All the aforesaid transactions are hit by the provisions of sections 269SS and 269T, the necessary action in this respect is being taken separately at the appropriate level." Admittedly, the Assessing Officer referred the matter to the Addl. CIT, Range-2, Jalgaon, proposing levy c f penalty under section 271D, vide letter dt. 30-3-1999. The Addl. CIT initiated the penalty proceedings under section 271D on 6-4-1999, when show cause notice under section 274 read with section 271D was issued, which was duly served upon the assessee. It is also true that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at is, from 1st July, 1992 the six months' period will end on 31st December, 1992. The penalty is imposed on 24th August 1993 and, hence, clearly out of the prescribed period of limitation. Even if the penalty proceedings are linked with the assessment proceedings, the limitation period will end on 31st March, 1993, that is, at the end of the financial year in which assessment proceedings were completed. The assessment proceedings were completed on 26th June, and hence, the financial year in which they were completed expired on 31st March, 1993. But under no circumstances, the case would fall under clause (a) of sub-section (1) of section 275. The penalties imposed under sections 271D and 271E are, therefore, cancelled on the ground of limitation. - Bhushan Chemicals v. Dy. CIT [1995] 54 ITD 5 (Pune) followed." At this stage, we may also refer to the provisions of section 275(1)(c) of the Income-tax Act, 1961, which prescribes the limitation for completing such penalty proceedings. It reads as under: "275(1) No order imposing a penalty under this Chapter shall be passed - (a) " (b) " (c) in any other case, after the expiry of the financial year in which the proceedings, in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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