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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 ..... vied 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ate of Uttar Pradesh [1979] 118 ITR 326. Further, it was submitted that the assessee had not taken any loan or deposit but it was mere transfer of fund from the directors/close relatives of the directors of the company. According to the assessee, these funds were neither kept for fixed period nor repayable on demand and they were merely current accounts. The other contention of the assessee was that the order of the Addl. CIT was time barred, as it was not passed on or before 30-9-1999. 5. After considering the submissions of the assessee, the ld. CIT (A) 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitation prescribed under section 275(1)(c) of the Act. According to the ld. Counsel for the assessee, section 275(1)(c) imposes a time limit for passing an order of penalty within a period of six months from the end of the month in which penalty proceedings were initiated, He, therefore, submitted that the penalty order passed by the Addl. CIT was clearly barred by limitation. Reliance was placed on the following decisions: (1) Manoharlal v. Dy. CIT [1995] 53 TTJ (Jp.) 105 (2) Asstt. CIT v. Shree Nivas Chemicals [2003] 84 ITD 76 (Chd.) In view of the above, 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 considerat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e course of assessment of any other proceedings. Under both the situations it is contemplated that there will not be any necessity to extent the period of limitation on account of appellate proceedings and hence, are clubbed together in the same clause. Thus, in the present case, the limitation prescribed under clause (c) of sub-section (1) of section 275 would be applicable. It is undisputed that penalty proceedings were initiated on 25th June, 1992. The period of limitation shall be six months from the end of the month in which penalty proceedings are initiated, that 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-sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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