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TMI Blog2022 (8) TMI 938X X X X Extracts X X X X X X X X Extracts X X X X ..... is the prescribed authority to initiate 271D proceedings, has passed order within the period of limitation prescribed i.e. within 6 months from the end of the month from the date of initiation of 271D proceedings on 15.07.2015. In view of the above discussion, we are of the considered view that Ld. CIT(A) has not erred in law and on facts in holding that the order u/s 271D of the Act is not barred by limitation. Amount received by the assessee from his wife and his father - As in view of the decision of the jurisdictional Gujarat High Court in the case of Dr. Rajaram L. Akhani [ 2016 (6) TMI 1051 - GUJARAT HIGH COURT] and other case laws cited above, as applicable to the facts of the case, in our view so far as receipt of Rs.22,50,000/- by the assessee from his wife and father is concerned, in our view the provisions of section 269SS do not stand attracted. There is nothing on record to show that the amount was taken as a loan or deposit by the assessee from his father/wife and also there is nothing on record to establish that the assessee was under an obligation to repay that the same (with our without interest) and therefore in view of the judicial precedents cited above, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct of only two amounts i.e. Rs. 12.50 Lakhs and Rs. 10 Lakhs and not for Rs. 15 Lakhs. Thus, both the authorities not satisfied to levy of penalty on Rs. 15 Lakhs which is not initiated at all. 3. The Hon'ble CIT(A) has also erred in law and on facts in not considering the case property on merits. 4. The Hon'ble GIT(A) has also erred in law and on facts in not considering the spirit of the law which is explained by the Hon'ble Finance Minister at the time of introducing the provisions of Sec. 269SS during the course of Budget Speech on Finance Act, 1984. The Hon'ble C.B.D.T has also in its Circular No. 387 dated 06/07/1984 elaborately explained. The Speech and intention of inserting the provisions of Sec. 269SS at Para 32.1 and 32.2 which is not followed by the Ld. J.C.I.T and the Hon'ble CIT(A) has erred in confirming the action of the Ld. J.C.I.T. 5. The Hon'ble CIT(A) has also erred in distinguishing the various decisions cited by the appellant before the Hon'ble J.C.I.T and before the Hon'ble CIT(A). 6. The appellant craves leave to amend, alter or delete any of the above grounds of appeal on or before the date of appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce it is not the case that money had to be accepted in cash on account of lack of banking facilities. During the course of 271D proceedings, Ld. Joint Commissioner further observed that the assessee had further taken a loan of Rs.15,00,000/- from one Mr. Mahispatsinh in cash in contravention of provisions of section 269SS of the Act about which he never informed during the course of assessment proceedings. In response to assessee s challenge to 271D proceedings on the grounds of limitation, the Ld. JCIT dismissed the same on the ground that the order was passed within 6 months from the issuance of notice and hence the same was not barred by limitation. Accordingly, the JCIT imposed a penalty of Rs.37.5 lakhs, equivalent to the amount of sum received in cash. 4. Before the CIT (Appeals), the assessee challenged the 271D order as being barred by limitation. The Ld. CIT(A) dismissed the assessee s contention by observing that the competent authority for levy of penalty under section 271D was the JCIT who had issued notice initiating proceedings on 15-07-2015 and the penalty would get barred by limitation after the end of 6 months from the end of the month in which penalty was initi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 271D of the Act during the course of assessment proceedings itself. However, after a few years the Joint Commissioner of Income Tax had given the approval for initiating 271D proceedings. The issue for consideration was whether the period of limitation started from the date when the assessing officer (during the course of assessment proceedings itself) had initiated penalty proceedings u/s 271D of the Act or whether the period of limitation could be extended till 6 months from the date when the Joint Commissioner subsequently granted approval after a few years. In the light of the above facts, the court held that issuance of notice of initiation of penalty under section 271D of the Act may appropriately and validly be made by the assessing officer without necessitating further issuance of notice by the Joint Commissioner, the other authority, to levy penalty. Again, in the case of JKD Capital and Finlease limited 81 taxmann.com 80 (Delhi), on which reliance has been placed by the assessee, the assessing officer during the course of assessment proceedings itself had issued a direction to initiate proceedings against the assessee u/s 271E of the Act. However, we note that in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re 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 the issuance of the notice issued by the Joint Commissioner to the assessee to which he has filed his reply . Therefore, in our considered view, the 271D order is not barred by limitation and as validly pointed out by the Ld. CIT(A) in his order, the Joint Commissioner, who is the prescribed authority to initiate 271D proceedings, has passed order within the period of limitation prescribed i.e. within 6 months from the end of the month from the date of initiation of 271D proceedings on 15.07.2015. In view of the above discussion, we are of the considered view that Ld. CIT(A) has not erred in law and on facts in holding that the order u/s 271D of the Act is not barred by limitation. 6. In the result, Ground Number 1 of the assessee s appeal is dismissed. 7. On merits, the Ld. counsel for the assessee submitted that it is settled law that no penalty u/s 271D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prietorship concern, took cash loans from her husband carrying on another proprietorship business on account of business exigencies for making payments to labourers and lenders, there being no violation of provisions of section 269SS, impugned penalty order passed under section 271D was to be set aside. In the case of ITO v. Tarlochan Singh [2003] 128 taxman 20 (Asr.) (Mag.) penalty under section 271D was levied on ground that assessee had received loan of Rs. 70,000 in cash from his wife for investment in acquisition of immovable properties. Wife had given money to husband for prosperity of family only and there was no evidence that amount in question was taken for commercial use. Though revenue considered it loan, but there was no material on record to show that assessee had returned amount received from wife or paid interest thereupon. Assessee was also under bona fide belief that amount in question did not require to be received otherwise than by an account payee cheque or account payee bank draft. Whether considering above and also keeping in view that intention of Legislature was never to punish a party involved in genuine transactions, it had to be held that there was reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee has filed an affidavit to the effect that he has taken cash loans of Rs.12,50,000 from his wife and 10 lakh from this father. In the affidavit, there was no mention of receipt of Rs.15 lakhs from Mr. Mahispatsinh. Thus, from the facts it becomes clear that the assessee has deliberately chosen not to disclose any details in connection with the receipt of Rs. 15 lakhs from Mr. Mahispatsinh during the course of assessment proceedings and specially when the assessee was required to furnish details of cash taken in contravention of provisions of section 269 SS of the Act. Therefore, there was no occasion for the assessing officer to issue a show cause notice in respect of this above receipt of Rs.15 lakhs since the assessee had deliberately not disclosed this sum during the course of assessment proceedings. It was only during the course of 271D proceedings, that on going through the relevant assessment records, it came to light that apart from the aforesaid sum of Rs.22,50,000/- taken by the assessee from his wife and father, the assessee had also taken cash loan from Mr. Mahispatsinh for a sum of Rs.15 lakhs. The assessee during the course of proceedings before Ld. CIT(A) co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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