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TMI Blog2016 (8) TMI 810X X X X Extracts X X X X X X X X Extracts X X X X ..... istinguished by the ld DR on the premise that the money after accepting from the creditor was not routed through the banking channel for the payment to the seller. In our view, this argument is not available to the revenue as the revenue has neither challenged the registration of the sale deed in favour of the assessee nor has challenged the cash consideration paid by the assessee to the seller at the time of registration before the Sub-Registrar of sale deed. In our view the case of the Dimple Yadav is squarely applicable to the facts and circumstances of the case. In the light of the above, we are of the view, the assessee has shown the reasonable cause within the meaning of Section 273B of the Act, therefore, the penalty order of the lower authorities is quashed and the appeal of the assessee is allowed. - ITA No. 1272/HYD/2015 - - - Dated:- 3-8-2016 - Shri B. Ramakotaiah, Accountant Member And Shri Laliet Kumar, Judicial Member For Assessee: Shri K.C. Devdas (AR) For Revenue: Shri A. Sitarama Rao (D.R.) ORDER Per Laliet Kumar, J. M. This is the appeal filed by the assessee arises against the order dated 29/09/2015 passed by the ld. CIT(A)-5, Hyderabad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rao 3,00,000 f. Mr. M.Jagadeeswara Rao 4,50,000 22,20,000 After the scrutiny, the ld A.O. finalized the assessment U/s 143(3) of the Income Tax Act, 1961 (in short the Act) vide order dated 24/12/2009. 2.1 The Additional Commissioner of Income Tax issued a notice on 24/10/2013 for imposition of penalty U/s 271D of the Act. In response to the notice, the assesse filed explanation alongwith the confirmation letter from the creditors. The officer was not convinced with the explanation being not satisfactory hence, imposing penalty U/s 271D of the Act for ₹ 22,20,000/-. 3. The assessee filed appeal before the ld CIT(A) and the ld CIT(A) vide impugned order dated 29/09/2015 has upheld the order passed by the ld A.O. 4. Now the assessee is in appeal before us. The assessee has raised various grounds mentioned hereinabove and we shall be deciding the appeals ground wise. 4.1 Ground No. 2:- The ld AR of the assessee has submitted before us that the initiation of penalty proceedings by the Additional Commissioner after issuing the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5.6 Further the necessity of initiating penalty proceedings in the course of any proceedings under IT Act has not been stipulated. The Special Bench decision in the case of Dewan Chand Amrit Lal (2005) 98 TTJ 0947 (SB): (2006) 98 ITD 0200 (SB) has considered the issue and held that: - 26. In the light of the above discussion, it appears that the legislature has not considered it necessary to provide for limitation for initiation of penalty proceedings under ss. 271D and 271E. It becomes more probable when we consider the intention of the legislature behind incorporation of provisions of ss. 269SS and 269T. We have referred to the legislative intent behind incorporation of ss. 269SS., 269T, 271D and 271E in the preceding paragraphs. The intention behind incorporation of these provisions was to counter the proliferation of black money, which when found in the course of search is sought to be explained by cash loans from various persons. As it is, there is no time-limit for conducting searches. When in the course of search, some information is found about cash loans or deposits or repayment of loans or deposits or such claims are made, the necessity for initiating proceedings u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y proceedings under ss. 271D and 271E in interpreting the provisions.- 28. In the final analysis, we hold that the authority competent to impose penalty under ss. 271D and 271E is vested with the Dy. CIT (now Jt. CIT) and the AO does not have the power either to initiate the penalty proceedings or impose the same. There is no procedure for reference by the AO to the competent authority for imposition of penalty under ss. 271D or 271E. Therefore, the limitation for completion of penalty proceedings as provided under s. 275(1)(c) has got to be computed from the date of issue of show-cause notice by the competent authority, which in the present case, is the Dy. CIT (now Jt. CIT). Since the respective orders under s. 27lD have been passed within a period of six months from the date of initiation by the competent authority, the penalty orders passed in the cases of the appellants herein are not barred by limitation. 5.7 Further, in ITA No. 1836/Mum/2009 Assessment Year: 2003-04) Shri Parag A. Doshi, Hon ble ITAT held: In view of the conflicting decisions of various Tribunals on the issue, a Special Bench of Tribunal was constituted. The Chandigarh Special Bench of I.T.A.T. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the parties, perused the material available on the record and the judgments cited by the LD CIT(A) more particularly the Special Bench decision in the case of Diwan Chand Amritlal (supra) is clearly applicable to the facts and circumstances of the present case and therefore no further deliberation on this issue is required and accordingly we decide the issue against the assessee by respectfully following the binding precedent of the Special Bench decision in the case of Diwan Chand Amritlal (supra). 7. Ground Nos. 1, 3 and 4:- In respect of all these issues, it was contended by the ld AR of the assessee that once the assessment proceedings attend finality in terms of passing of the scrutiny assessment order U/s 143(3) of the Act on 24/12/2009, there was no satisfaction recorded by the A.O. or by the Additional Commissioner before issuance of notice. For that purposes, the ld AR relied upon the provisions of Section 269SS, 283B, 275 and 274 of the Act. It was contended that from the conjoint reading of Section 269 of the Act, it is clear that the A.O. is duty bound to record the satisfaction before initiation of the penalty U/s 271D of the Act and in the present case, no satisfac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s emphasized paragraph No. 18 of the said judgment, the same is reproduced herein below:- 18. To sum up, a harmonious construction of the relevant provisions of Sections 271D, 271E and 273B clearly reveals the use of expression shall be liable to pay in sections 271D and 271E and the provisions of sec. 273B providing that no penalty would be leviable if the person concerned proves that there are reasonable cause or the said failure clearly indicates these provisions give a discretion to the authority to impose the penalty or not to impose the penalty. Such a discretion has to be exercised in a just and fair manner having regard to the entire facts and materials existing on record. Ordinarily, a plea as to be ignorance of law cannot support the breach of a statutory provision but the fact of such an technical break due to ignorance of the relevant provisions of law or on account of bonafide belief, coupled with the fact that transactions in question are genuine and bonafide transaction were undertaken during the regular course of its business will not result in levy of penalty U/s 271D and 271E. The ld AR further mentioned the various judgments to show that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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