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TMI Blog2016 (9) TMI 449X X X X Extracts X X X X X X X X Extracts X X X X ..... OR THE APPELLANT : MD.NIZAMUDDIN,ADVOCATE FOR THE RESPONDENT : MR.J.P.KHAITAN,SR.ADVOCATE, MRS.SWAPNA DAS, MR.SIDDHARTH DAS, ADVOCATES The Court: The subject matter of challenge is a judgment and order dated 7th November, 2008 passed by the Income Tax Appellate Tribunal, A Bench, Kolkata in ITA No. 1170 (Kol.) of 2008 pertaining to the assessment year 2004-05 by which the learned Tribunal dismissed an appeal preferred by the revenue. The aggrieved revenue has come up in appeal. The following question of law was formulated on 20th April, 2010. Whether on the facts and in the circumstances of the case the learned Tribunal has erred in law in dismissing the Appeal of the revenue by disregarding that the initiation of penalty pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (1) for violation of sections 269SS of the Income Tax Act during the assessment year 2004-05. The contents of the notice issued by him are as follows:- It has been found that you have been received cash of ₹ 30,00,000/- above ₹ 20,000/- at a time from a single person in the F.Yr.2002-03 relevant to A.Yr.2003-04. This is in violation to the provision U/s.269SS and attracts penalty U/s.271D(1). Therefore you are required to explain why the penalty U/s.271D(1) of the I.T.Act should not be imposed against you. Your reply must reach this office 19th February, 2007. The assessee replied stating, inter alia that there was no violation of section 269SS because the assessee had neither accepted any loan nor did the assessee ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 21st September, 2007 was hit by limitation. The revenue unsuccessfully challenged the order before the learned Tribunal and has now come up before this Court. Md. Nizamuddin, learned advocate appearing in support of the appeal drew our attention to a judgment of the Kerala High Court in the case of Grihalakshmi Vision Vs. Additional Commissioner of Income Tax reported in (2015) 379 ITR 100 (Kerala), wherein the following views were taken:- Question to be considered is whether proceedings for levy of penalty, are initiated with the passing of the order of assessment by the Assessing Officer or whether such proceedings have commenced with the issuance of the notice issued by the Joint Commissioner. From the statutory provision, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te, appearing for the assessee drew our attention to a judgment of the Rajasthan High Court in the case of CIT Vs Jitendra Singh Rathore reported in (2013) 352 ITR 327 (Rajasthan), wherein the following views were taken:- In the present case, the first show-cause notice for initiation of proceedings was issued by the Assessing Officer on March 25, 2003, and was served on the assessee on March 27, 2003. Obviously, the later period also expired on September 30, 2003 when six months expired from the end of the month in which the action for imposing the penalty was initiated. The order as passed by the Joint Commissioner of Income-tax for the penalty under section 271D on May 28, 2004 was clearly hit by the bar of limitation and has rightl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sioner Section 274 lays down the procedure for imposition of penalty. Sub-section 1 of Section 274 provides for affording a reasonable opportunity of hearing to the assessee before an order imposing penalty is passed. Though Section 271D vests the jurisdiction of imposing penalty solely in the Joint Commissioner, it is silent as regards initiation of the proceedings. The question is, can such initiation of proceedings be made by the Assessing Officer? The Assessing Officer is the person, who is likely to come across the cases of concealment or violation of the provisions of law attracting penal provisions. Can the Assessing Officer, having come across a case of violation of law attracting penal provisions, issue a notice and in case h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... jurisdiction to impose penalty exceeding a sum of ₹ 1000/-. Question arose whether in a case involving penalty imposable exceeding a sum of ₹ 1000/-, the Assessing Officer could initiate the proceedings by issuing a notice. That question was answered by the Supreme Court in the affirmative. Their Lordships in the case of D.M. Manasvi vs. C.I.T., Gujarat, reported in [1972] 86 ITR 557, held as follows:- We are also not impressed by the argument advanced on behalf of the appellant that the proceedings for the imposition of penalty were initiated not by the Income-tax Officer but by the Inspecting Assistant Commissioner when the matter had been referred to him under section 274(2) of the Act. The proceedings for the impositi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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