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TMI Blog2018 (5) TMI 1593X X X X Extracts X X X X X X X X Extracts X X X X ..... 271E of the Act in the facts and circumstances of the case. 4. The brief facts of this issue are that the assessee is a partnership firm and had filed its return for the Asst Year 2008-09 on 27.9.2008 declaring total income of Rs. 6,854/-. The assessment was completed u/s 143(1) of the Act. Later on the ld AO received information from the ITO Ward 30(3), Kolkata that the assessee had during the financial year 2007-08 repaid some loans in cash. On the basis of this information, the ld AO initiated proceedings u/s 147 of the Act and issued notice u/s 148 of the Act dated 31.3.2011. The assessment was completed u/s 143(3) 147 of the Act on 16.5.2011 determining the total income of the assessee at Rs. 6,854/- without making any additions. In the said order, the ld AO had noted that the assessee had repaid certain loans in cash during the financial year 2007-08 to the tune of Rs. 11,39,932/- to the partner of the assessee firm, for which penalty proceedings u/s 271D of the Act by the ld AO. Later in the course of proceedings before the ld JCIT, penalty proceedings u/s 271E of the Act were initiated on the assessee for violation of provisions of section 269T of the Act. The following fa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee on 6.12.2012. The assessee objected to the fact that it had not violated the provisions of section 269SS of the Act and hence penalty u/s 271D of the Act is not leviable. Later the ld JCIT on realizing his mistake, issued show cause notice u/s 271E of the Act on 16.1.2013. The ld JCIT levied penalty u/s 271E of the Act vide his order dated 27.2.2013. 7. The ld CITA deleted the penalty on the following grounds :- a) The re-assessment order was framed u/s 147/143(3) of the Act on 16.5.2011. First show cause notice for penalty u/s 271D of the Act was issued on 5.12.2012. Later another show cause notice for penalty u/s 271E of the Act was issued on 16.1.2013. Both the notices u/s 271D and 271E are time barred in as much as the same was not issued within the time limit prescribed u/s 275(1)(c ) of the Act. b) Genuineness of the loan transactions stood completely verified by the ld AO in the assessment proceedings and the same was also duly confirmed by the partner. The provisions of section 269T of the Act fall under Chapter XX-B which reads as "REQUIREMENT AS TO MODE OF ACCEPTANCE, PAYMENT OR REPAYMENT IN CERTAIN CASES TO COUNTERACT EVASION OF TAX". In the instant case , si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment or other order is the subject-matter of an appeal to the Commissioner (Appeals) under section 246 or section 246A, and the Commissioner (Appeals) passes the order on or after the 1st day of June, 2003 disposing of such appeal, an order imposing penalty shall be passed before the expiry of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed, or within one year from the end of the financial year in which the order of the Commissioner (Appeals) is received by the 45[Principal Chief Commissioner or] Chief Commissioner or45[Principal Commissioner or] Commissioner, whichever is later;] (b) in a case where the relevant assessment or other order is the subject-matter of revision under section 26346[or section 264], after the expiry of six months from the end of the month in which such order of revision is passed; (c) in any other case, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which action for imposition of penalty is initiated, which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 is clear that the competent authority to levy penalty being the Joint Commissioner. Therefore, only the Joint Commissioner can initiate proceedings for levy of penalty. Such initiation of proceedings could not have been done by the Assessing Officer. The statement in the assessment order that the proceedings under section 271D and Section 271E are initiated is inconsequential. On the other hand, if the assessment order is taken as the initiation of penalty proceedings, such initiation is by an authority who is incompetent and the proceedings thereafter would be proceedings without jurisdiction. If that be so, the initiation of the penalty proceedings is only with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was cited before the Kerala High Court but the Kerala High Court did not give any reasons as to why was the view taken by Rajasthan High Court not acceptable to the Hon'ble Division Bench of the Kerala High Court. We have considered the rival submissions advanced by the learned advocates appearing for the parties. Sub- section 2 of Section 271 D provides that the jurisdiction of imposing penalty is vested in the Joint Commissioner. The Subsection 2 provides as follows:- 'Any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner" 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 271 D 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 As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or by the Appellate Assistant Commissioner. The fact that the Income-tax Officer has to refer the case to the Inspecting Assistant Commissioner if the minimum imposable penalty exceeds the sum of rupees on thousand in a case falling under clause (c) of sub-section (1) of section 271 would not show that the proceedings in such a case cannot be initiated by the Income-tax Officer. The Income-tax Officer in such an event can refer the case to the Inspecting Assistant Commissioner after initiating the proceedings. It would, indeed, be the satisfaction of the Income-tax Officer in the course of the assessment proceedings regarding the concealment of income which would constitute the basis and foundation of the proceedings for levy of penalty." Applying the views expressed by the Apex Court it can be said that in a case falling under Section 271D the Assessing Officer is not precluded from initiating the proceedings by issuing a notice. The views expressed by the Kerala High Court cannot be followed. Once it is realized that the proceedings were initiated on 26th December, 2006 when the notice was issued by the Assessing Officer, the period of limitation necessarily expired on 30t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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