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TMI Blog2023 (8) TMI 1094X X X X Extracts X X X X X X X X Extracts X X X X ..... did not file return of income for the year under consideration. There was a search and seizure action in case of M/s. S. R. Ferro Alloys Group. During the course of search and seizure certain documents were impounded from Shri Ramesh Chand Upadhya showing the cash loan given to various persons including assessee during the F.Y. 2007-08 to 2010-11. The DCIT(Central), Bhopal vide letter dated 09.10.2014 along with appraisal report in case M/s. S.R. Ferro Group intimate, ITO-2, Ratlam having jurisdiction of Shri Ramesh Chand Upadhya regarding the said documents and transactions. The said report was then transferred to the ITO, Jhabua who has completed the assessment u/s 143(3) r.w.s. 147 in case of Shri Ramesh Chand Upadhya on 15.03.2016 for A.Y. 2008-09. The ITO, Jhabua noted that during the year under consideration the assessee has received cash loan from Shri Ramesh Chand Upadhya which is in contravention of section 269SS of the Act and accordingly a penalty proposal was sent to the JCIT Ratlam for imposing of penalty u/s 271D of the Act. Consequently, a penalty u/s 271D was levied vide order dated 23.1.2017 equivalent to the cash loan amount of Rs.6 lacs. The assessee challenged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and bona fide and therefore, in view of the provisions of section 273B no penalty shall be imposable on the assessee for any failure or default to comply with the provisions of section 269SS and 269TT. 7. On the other hand, Ld. DR has submitted that the provisions of section 271D & 271E are attracted for violation of provision of section 269SS and 269TT of the Act respectively. The levy of penalty under these provisions is not depending on the outcome of the assessment order. Therefore, there is no requirement of the assessment proceedings in imposing the provision u/s 271D & 271E of the Act. He has relied upon the orders of the authorities below. 8. We have considered rival submissions and carefully perused the relevant material on record. There is no dispute that the assessee has not filed any return of income for the assessment year under consideration. The penalty u/s 271D of the Act has been levied on 23.01.2017 which is after 8 years from the end of the assessment year under consideration. The limitation for the penalty levied under chapter XXI has been provided in section 275 of the Act which reads as under: "275. 1 Bar of limitation for imposing penalties (1) 2 ] No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ancelling penalty or dropping the proceedings for the imposition of penalty is passed before the order of the Commissioner (Appeals) or the Appellate Tribunal or the High Court or the Supreme Court is received by the "Principal Chief Commissioner or] Chief Commissioner or the "[Principal Commissioner or] Commissioner or the order of revision under section 263 or section 264 is passed, an order imposing or enhancing or reducing or cancelling penalty or dropping the proceedings for the imposition of penalty may be passed on the basis of assessment as revised by giving effect to such order of the Commissioner (Appeals) or, the Appellate Tribunal or the High Court, or the Supreme Court or order of revision under section 263 or section 264: Provided that no order of imposing or enhancing or reducing or cancelling penalty or dropping the proceedings for the imposition of penalty shall be passed- (a) unless the assessee has been heard, or has been given a reasonable opportunity of being heard; (b) after the expiry of six months from the end of the month in which the order of the Commissioner (Appeals) or the Appellate Tribunal or the High Court or the Supreme Court is received by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ated by the High Court in the impugned order. As pointed out above, insofar as, fresh assessment order is concerned there was no satisfaction recorded regarding penalty proceeding under Section 271E of the Act, though in that order the Assessing Officer wanted penalty proceeding to be initiated under Section 271(1)(c) of the Act. Thus, Insofar as penalty under Section 271E is concerned, it was without any satisfaction and, therefore, no such penalty could be levied." 10. Thus, the Hon'ble Supreme Court has affirmed the view of the Hon'ble High Court that in absence of satisfaction recorded regarding the penalty proceedings u/s 271E of the Act the order of levy of penalty is not valid. The Ahmedabad Bench of the Tribunal in case of Vijayaben G. Zalavadia vs. JCIT (supra) has considered an identical issue as under: "6. We have heard the respective parties and also perused the relevant materials available on record. 7. We find that on the identical set of facts the Punjab and Haryana High Court was pleased observe the following while upholding quashing of penalty by the Tribunal: "3. We have heard learned counsel for the appellant. 4. The only point for consideration i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents made by the assessee were inter company transfer for group housing and purchase of flat and at times payments were made after closure of banking hours. It was further submitted that the payments made were genuine and no tax evasion was involved and the default, if any, was of technical nature. The explanation being plausible one, it cannot be said that there was no reasonable cause within the meaning of Section 273B of the Act. No substantial question of law arises in this appeal." 8. We find substances in the submissions made by the Ld. A.R. particularly after considering the order passed by the Hon'ble Punjab and Haryana High Court as cited hereinabove. In fact, on the identical set of facts the penalty under Section 271E was deleted by the Tribunal and further upheld by the Hon'ble High Court. 9. Having regard to the facts and circumstances of the case and the ratio laid down in the order passed by the Punjab and Haryana High Court we do not hesitate to hold that the impugned penalty under Section 271E is not permissible in the absence of regular assessment framed against the assessee by the Revenue. Hence, the same is not found to be sustainable in the eye of law and, th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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