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TMI Blog2004 (9) TMI 564X X X X Extracts X X X X X X X X Extracts X X X X ..... section 269SS of the Act. The Addl. CIT, Range-2, Kota had also levied the penalty of Rs. 1.60 lakhs under section 271E of the Act for repayment in cash in contravention of the provisions contained in section 269T of the Act. The assessee had accepted certain loans/deposits in cash and had also made the repayment of the deposits in cash as under : Date of Receipt of Loan/Deposit Date of Repayment of Loan/Deposit Amount Shri Madan Lal, Haripura 6-8-1996 9-1-1997 Rs. 18,000 15-10-1996 19-1-1997 Rs. 35,000 28-10-1996 2-2-1997 Rs. 25,000 Date of Receipt of Loan/Deposit Date of Repayment of Loan/Deposit Amount Shri Mangi Lal, Haripura 6-8-1996 9-1-1997 Rs. 10,000 19-8-1996 12-1-1997 Rs. 20,000 13-9-1996 15-1-1997 Rs. 50,000 4-10-1996 9-1-1997 Rs. 20,000 5-11-1996 2-2-1997 Rs. 10,000 In this case, the search was conducted on 24-2-1999 and order under section 158BC was passed on 24-8-2001. After ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Addl. CIT, Range-2, Kota who had issued a show-cause notice for imposition of penalties under sections 271D and 271E of the Act (PB 23 33). In this case, the penalties are to be initiated by the person who is competent to levy the penalty. The competent person is the Additional CIT. Therefore, the penalty proceedings can only be initiated by him. 6. The ld. AR made the following submissions : "In the case of penalty under section 271D/E, the limitation provisions under section 275(1)( c ) are applicable as against 275(1)( a ) for the reason that cash transactions in contravention of section 269SS/T has got nothing to do with the assessment of the income and, hence, are not subject-matter of appeal before the first appellate authority. Section 246A which has listed the appellable orders has not included any appeal against any such transactions in cash under section 269SS/T. Section 275(1)( a ) relates only to those orders which can be subject-matter of appeal. The ld. CIT(A), therefore, has rightly decided the issue in assessee s favour. For this proposition, following case laws are being relied on: 1. Supreme Metprodes Ltd. v. Asstt. CIT 29 Tax World 25 (Jp.). 2. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 26-4-2002. He came to know about the facts of the case on that day and was satisfied about the initiation of penalty proceedings. The period of six months expires on 31-10-2002 and the financial year expires on 31-3-2003. The orders of penalty had been passed by the Addl. CIT on 29-10-2002 which are well within time-limit prescribed under section 275(1)( c ) of the Act. We do not agree with the contention of the ld. AR that block assessments are issued with prior approval of the Addl. CIT and he was well aware of initiation of penalty proceedings. The time-limit should be counted from the date of show-cause notice issued by the Assessing Officer. We are of the opinion that the competent authority, i.e., Addl. CIT is to be satisfied about the initiation of penalty proceedings and he comes to know about the facts of the case when he issued the show-cause notice on 26-4-2002. The ld. DR had rightly placed reliance on the case of Asstt. CIT v. Shree Nivas Chemicals [2003] 84 ITD 76 (Chd.) and the case of CIT v. S.M. Syed Mohamed [1995] 216 ITR 331 1 (Ker.) (FB). Again we agree with the contention of the ld. DR that Additional CIT cannot be said to be satisfied about the in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... so. 10. The ld. DR contended that the provisions of sections 269SS and 269T are also applicable to the bona fide transactions even to the cases where no addition can be made under section 68 of the Act as held in the case of Udaichand Santosh Kumar Jain v. ITO [2003] 131 Taxman 184 (Mag.), ITAT Indore Bench. Secondly, the assessee could not prove that it had acted as Commission Agent for this transaction and the amount had been received by sale of agricultural produce, i.e., vegetables. 11. The ld. AR submitted that the assessee firm is engaged in the business of Kacha Arhatiya in the Subzi Mandi, Kota. The provisions of sections 269SS and 269T cannot be made operative unless it is established that the assessee accepted the loans/deposits in cash. The amount under consideration in this case were not at all in the nature of any loan/deposit. The assessee admittedly being a Kacha Arhatiya rendered various services to its constituents. A Kacha Arhatiya sells the goods brought to it by the seller and he also collects the sale price from the buyer. The sale consideration received later on is thus kept by him on behalf of the seller. It is not uncommon that the constitu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not intended to be covered under section 269SS/269T. For this purpose, he relied on the following case laws: ( a ) CIT v. Bhagwati Prasad Bajoria (HUF) [2003] 263 ITR 487 3 (Gauhati) following Astt. Director of Inspection v. Kum. A.B. Shanti [2002] 255 ITR 258 4 (SC). ( b ) Jagdish Sharan Agarwal s case ( supra ) ( c ) Karnataka Ginning Pressing Factory v. Joint CIT [2001] 77 ITD 478 (Mum.). 9.A provision should be incorporated keeping in view the intend and object of the enactment. For this purpose, he relied on the following circular and case laws: ( a )CBDT Circular No. 387, dated 6-7-1984, 146 ITR 162 (Statute) and No. 345, dated 28-6-1982 ( Chaturvedi Pithsariya ) Vol. 5, Pages 5732 5735) ( b ) Shashikant Laxman Kale v. Union of India [1990] 185 ITR 104 1 (SC) ( c ) Vir Sales Corpn. v. Asstt. CIT [1994] 50 TTJ (Ahd.) 130 ( d ) Chandra Cement Ltd. v. Dy. CIT 23 TW 160 (Jp.) ( e ) Kalman Mal Harakchand v. Dy. CIT (sic). 10.If on interpretation, two views possible, view favourable to assessee be adopted. For this purpose, he relied on the following case laws: ( a ) CIT v. Vegetable Products Ltd. [1973] 88 ITR 192 (S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... such transactions were genuinely made, he would definitely produce some documentary evidences in his support. Once it had been claimed that the amount had been received on account of sale of their agricultural produce, the issue of Amanat has no force. The genuineness of transactions had not been proved. It had rightly been contended by the ld. DR that the provisions of section 269SS/269T are applicable even to the bona fide transactions as held in the case Udaichand Santosh Kumar Jain v. ITO [2003] 131 Taxman 184 (Indore) (Mag.). We do not find any force in the contention of the ld. AR that the assessee who is a regular tax payer being guided/advised by legal expert cannot take plea of ignorance of law because the loan was accepted in cash by the assessee and not by the farmers. We are, therefore, of the opinion that having regard to the various contentions and pleas raised by the ld. AR and also after going through the order of the ld. CIT(A), the real issue of the assessee-firm being commission agent had not been proved. Therefore, the orders of the lower authorities are set aside with the direction to the Addl. CIT/JCIT, Range-2, Kota that he should consider all the pleas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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