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TMI Blog2016 (7) TMI 1691X X X X Extracts X X X X X X X X Extracts X X X X ..... alty imposable under sub-section (1) or (2) of the said section shall be imposed by the Joint Director or Joint Commissioner in respect of cases other than the cases covered in clauses (a) (b) of sub-section (3). As considered by the CBDT that the statutory provisions clearly state that the competent authority to levy penalty is the Joint Commissioner, therefore, only the Joint Commissioner can initiate proceedings to levy penalty and such initiation of penalty proceedings could not be done by the AO. The CBDT has further acknowledged that statement in the assessment order that the proceedings under section 271D and 271E of the Act are initiated is consequential since the initiation is by an authority who is incompetent. The proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owla, JM And Shri R.K. Panda, AM For the Appellant : Shri M.K. Kulkarni For theRespondent : Shri Suhas Kulkarni, JCIT ORDER PER SUSHMA CHOWLA, JM: This appeal filed by the assessee is against the order of CIT(A)-I, Nashik, dated 03.02.2015 relating to assessment year 2009-10 against levy of penalty under section 271D of the Income-tax Act, 1961 (in short the Act ). 2. The assessee has raised the following grounds of appeal:- 1. On the facts and in the circumstances of the case and in law the appeal order passed by the Ld. CIT(A)-Nashik confirming the levy of penalty levied by Jt. CIT, Range 1, Nashik under S.271-D of the Act of Rs.4,18,000/- without properly appreciating the provisions of S.273-B of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment order is placed on record. Thereafter, the Assessing Officer made a reference under section 272A(3)(c) of the Act for initiating penalty proceedings under section 271D of the Act vide letter dated 03.05.2012. The Assessing Officer stated that during the course of assessment proceedings, it was seen that the assessee had accepted loan / deposit in cash from his wife Smt. C.D. Kulkarni of Rs.4,18,000/-. Since there was receipt of cash loan, which was in violation of provisions of section 269SS of the Act, the JCIT issued show cause notice to the assessee as to why penalty under section 271D of the Act should not be levied. The case of the assessee before the JCIT was that he was a builder, developer and was the proprietor of his bu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... who was also engaged in allied line of construction and the amount was advanced by her out of her business funds. The assessee had requisitioned the said funds for carrying on of his business and because of relationship between the husband and wife, there was no merit in holding that there was violation of provisions of section 269SS of the Act. The second plank of arguments raised by the learned Authorized Representative for the assessee was that the initiation of penalty proceedings after completion of assessment proceedings, by the JCIT was incorrect. He referred to the CBDT Circular No.9/DV of 2016, dated 26.04.2016, wherein it has been observed that initiation of penalty proceedings should be during the course of assessment proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... said loan in cash, penalty proceedings were initiated under section 271D of the Act by issue of notice dated 07.05.2012 by the JCIT. The assessee has raised two issues in the present appeal. The first issue raised is against the jurisdiction of JCIT to pass the said order levying penalty under section 271D of the Act. The case of the assessee is that where the assessment proceedings were completed on 28.12.2011 and thereafter, penalty proceedings were initiated on a reference made by the Assessing Officer vide letter dated 03.05.2012, which was after completion of assessment proceedings, the power exercised by the JCIT, Range-1, Nashik was not correct. In this regard, reliance was placed on Circular issued by the CBDT (supra). The learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the JCIT for initiating proceedings under section 271D of the Act has further been explained by the aforesaid Circular of CBDT. Though the said Circular has been passed on 26.04.2016 but it explains law which is to be applied. As per the said Circular, it is incumbent upon the Assessing Officer other than the JCIT to make a reference to the JCIT with regard to violation of provisions of section 269SS and 269T of the Act before close of assessment proceedings. It is very clearly provided so in the said Circular. It has also been considered by the CBDT that the statutory provisions clearly state that the competent authority to levy penalty is the Joint Commissioner, therefore, only the Joint Commissioner can initiate proceedings to levy pena ..... X X X X Extracts X X X X X X X X Extracts X X X X
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