AI Insights
The case revolves around a penalty imposed on Ajay Bakliwal for allegedly violating section 269SS of the Income Tax Act by accepting a cash advance of Rs. 25,00,000 for the sale of shops, which was contrary to the provisions requiring such transactions to be conducted through banking channels. The penalty was initially levied by the Addl. CIT, Central Range, Udaipur, and was later upheld by the CIT(A). The main legal contention was whether the penalty was time-barred and whether the transaction was conducted in the individual capacity of the assessee or on behalf of the company he directed, M/s Millennium Build Home Pvt. Ltd. The Tribunal found that the penalty was indeed time-barred and that the transaction was related to the company's business, not the personal dealings of the assessee.
Appeal Details
Counselvise Citation
[2025] 140 COUNSELVISE.COM (IT) 46831 (ITAT-JAIPUR)
Assessee PAN
Bench
Appeal Number
CRN Number
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
11-04-2025
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
A
Assessment Year
2016-2017
Judgement Text
"vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”A” JAIPUR Mk0 ,l- lhrky{eh] U;kf;d lnL; ,oa Jh jkBksM deys'k t;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, vk;dj vihy la-@ITA No. 1278/JP/2024 fu/kZkj.k o\"kZ@Assessment Year : 2016-17 Ajay Bakliwal C 6 Vallabh Bari, Vallabh Bari, Kota cuke Vs. ACIT, Central Circle, Kota LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ABZPB 7775 P vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Sh. Rajendra Sisodia, Adv. jktLo dh vksj ls@ Revenue by : Mrs. Anita Rinesh, JCIT-DR lquokbZ dh rkjh[k@ Date of Hearing : 29/01/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: 11/04/2025 vkns'k@ ORDER PER: RATHOD KAMLESH JAYANTBHAI, AM By way of present appeal, the assessee challenges the order of the Commissioner of Income Tax (Appeal), Udaipur - 2 dated 30.09.2024 [ for short CIT(A)] for assessment year 2016-17. The said order of the ld. CIT(A) arise because the assessee challenged the order dated 22.06.2012 passed under section 271D of the Income Tax Act, 1961 [ for short Act ] by Addl. CIT, Central Range, Udaipur. 2 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT 2. In this appeal, the assessee has raised the following grounds: - “1. The Ld.CIT(A) has erred in confirming the penalty order dated 22.06.2022 passed by the JCIT- Central, Udaipur which was clearly barred by limitation u/s 275(1)(c) of the Act. 2. The Ld.CIT(A) has erred in confirming the penalty order dated 22.06.2022 passed by the JCIT- Central, Udaipur imposing penalty of Rs. 25,00,000/- under section 271D without appreciating the fact that the assessee had received the impugned amount net in his individual capacity but in the capacity of Director of the company M/s Millennium Build Home Private Limited and the penalty, if any was to be levied, it had to be done in the hands of the Company. 3. The Appellant craves leave to take additional grounds of appeal before or at the time of hearing of the appeal and/or modify any of the above grounds.” 3. Succinctly, the fact as culled out from the record are that a search & seizure operation under section 132(1) of the Income-tax Act, 1961 was carried out on 07.09.2017 at the various premises of \"Resonance Group, Kota\". In that search several persons/premises were covered u/s 132 of the Act. The case of the assessee was covered under that search proceeding. Consequent to search action, the case of the assessee was centralized to Central Circle-Kota by the Pr. Commissioner of Income-tax, Kota vide his order dated 12.10.2017. In that search action various incriminating documents / loose papers were found and seized. Out of them, one 'Ikrarnama' was seized by a search party and inventoried as Exhibhit-22. As per page No 91 & 92 of Exhibit-22 Shri Ajay Kumar Baikliwal has made agreement with Shri Mayank Jain and Shri Harish Kohli for sale of his six 3 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT shops situated at ground floor or his multistory Millennium Apartment and received Rs. 25,00,000/- advance in cash on 06.06.2015 which is contrary to the provisions of section 269SS. Accordingly, a reference was made by the ACIT Central Circle Kota to Addl./JCIT CIT, Central Range, Udaipur for considering initiating penalty proceedings u/s 271D of the Income Tax Act against the assessee. Based on that reference a show cause notice dated 24.12.2021 was issued to the assessee requiring him to show cause as to why penalty u/s 271D of the Act should not levied in the assessee's case for violation of the provisions of section 269SS of the Act 1961. The assessee filed the reply through postal means stating that violation of provisions of section 269SS of the Act as mentioned in the show cause Notice is unlawful and unjustified. The assessee also contended that the notice under section 274 read with section 271D of the income tax Act, 1961 appears to have been issued without proper appreciation of the facts of the case. The contention raised in the written reply reads as under : The assessee submitted the following facts for kind consideration and sympathetic appreciation. In case the facts submitted below are appreciated in proper perspective, there is not only no case of imposition of penalty even the issuance of show cause notice is unlawful and unjustified. The assessee submits as under: i. Agreement of sale of shops at Millennium Apartment, Parvati Puram, Kota is between M/s Millennium Build Home Pvt. Limited Kota and Shri Mayank Jain & Shri Harish Kohli. 4 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT It is submitted that agreement copy of which is enclosed, M/s Millennium Build Home Pvt. Ltd. sold 6 shops at Millennium Apartment, Parvati Puram, Kota to Shri Mayank Jain S/o Shri Ajit Kumar Jain resident of Mahaveer Nagar Kota and to Shri Harish Kohli S/o Shri Har Bhagwan Das Kohli r/o A- 381, Tanwandi, Kota for a total sum of Rs. 45,00,000/- and against the sale consideration a sum of Rs. 25,00,000/-was received in cash as advance on 06.06.2015. The balance amount Rs. 20,00,000/- was to be received with in a period of 2 months. Shri Ajai bakliwal Sto Shri R.K. Jain has signed this agreement as Director of M/s Millennium Build Home Pvt. Limited. Apparently the transaction of sale of shops does not belong to Shri Ajay Bakliwal in his individual capacity. He has signed this agreement in the representative capacity as Director of M/s Millennium Build Home Pvt Ltd, Kota, This fact is apparent from the 1st para of the agreement. It is submitted that in the assessment order of Shri Ajay Bakliwal for the Assessment Year 2016-17 the leamed AO has reproduced page 2 and 3 of the agreement in the assessment order itself, but page no. 1 was omitted to have been reproduced. The Page no. 1 of the agreement is scanned below which establishes the fact beyond doubt that the agreement was signed by Shri Ajay Bakliwal as director of M/s Millennium Build Home Private Limited, Kota. The First para of the first page of the agreement reproduced above very clearly states that the agreement is being executed by Shri Ajay Bakliwal as a representative of M/s Millennium Build Home Pvt. Ltd., Kota being a director of the company. In the above circumstances the transaction of sale of shops and the receipt of Rs. 25,00,000/- as advance against the sales of these shops does not belong to Shri Ajay Bakliwal in his Individual Capacity. The matter relates to M/s Millennium Build Home Pvt. Ltd, Kota. In the circumstances it is crystal clear that the learned AO emed in referring the matter to your kind honour for imposition of penalty under section 271D in the case of Shri Ajay Bakliwal. Therefore your show cause notice is based on wrong footing and deserves to be drooped. The same is unlawfut, illegal and unjustified. ii. Millennium Apartment, Parvati Puram, Kota built and owned by /s Millennium Build Home Pvt. Ltd., Kota It is further submitted that as per the agreement page no.1 scanned-above the amount of Rs, 25,00,000/- was taken as advance against sales of shops at Millennium Apartment, Parvati Puram, Kota. This fact is further established by the narration on Page 4 of the assessment order of Ajay Bakliwal for A.Y. 2016-17 where the learned AO has observed as under 5 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT During the assessment proceeding the assessee was asked to submit details regarding he above transactions. The assessee has replied that the deal was cancelled and the amount was returned. The assessee has accepted that he has taken cash of Rs, 25,00,000/- from Shri Mayank Jain and Shri Harish Kohli as advance against sale of 7 shops at Millennium Apartment, Parvati Puram, Kota on 06.06.2015 The assessee returned the amount in cash on cancellation of deal on 23.02.2016. These facts have been accepted by the assessee. The above para further establishes the fact that amount of Rs, 25,00,000/- was taken as advance against sale of 7 shops at Millennium Apartment, Parvati Puram, Kota. Millennium Apartment, Parvati Puram, Kota which was built by M/s Millennium Build home Pvt. Ltd., Kota. In this regard it is relevant to mention that in the case of M/s Millennium Build Home Pvt. Ltd. in the assessment year for 2016-17 the leamed Ao has considered the sale of Flats and shops at Millennium Apartment, Parvati Puram, Kota and cash received against the sales as income of the w/s Millennium Build Home Pvt. Ltd. This shows that the issue of sale of shops and Flats of Millennium Apartments, Parvati Puram, Kota, belongs to M/s Millennium Build Home Pvt. Ltd and not to Shri Ajay Bakliwal in his individual capacity. In this regard copy of assessment order for A.Y. 2016-17 passed by learned AO on 28.12.2019 in the case of M/s Millennium Build Home Pvt. Ltd. us enclosed. In this assessment order it has been mentioned by the learned AO that it was the Company M/s Millennium Build Home Pvt. Ltd. who was constructing multi storied building namely Millennium Apartment, Parvati Puram, Kota and many of the flats of Millennium Apartment, Parvati Puram, Kota have been Booked by Shri Ajay Bakliwal being the director of the company. The booking as well as advance amount of these Flats of Millennium Apartment, Parvati Puram, Kota have been considered in the assessment order of M/s Millennium Build Home Pvt. Ltd. The following para no 5 appearing on page 2 of the assessment order of M/s millennium Build home Pvt. Ltd for A.Y. 2016-2017 is relevant in the above regard and the same is quoted below. \"Documents regarding receipt of cash against booking/sale of Flats in M/s Millennium Build Home Private Limited were found and seized. The assessee company was constructing a multi storied building i.e. Millennium Apartment, Parvati Puram, Kota. Many Flats have been booked by Shri Ajay Bakliwal in F.Y. 2014-15 and 2015-16. Few flats have also been booked in previous year\" The above para shows that Millennium Apartment, Parvati Puram, Kota was a Muiti storied building which was constructed and owned by M/s Millennium Build Home Private Limited and Shri Ajay Bakliwal was a director in this company 6 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT In the aforesaid circumstances the issue of sale of shops and advance taken by Shri Ajay Bakliwal in his representative capacity as director belongs to M/s Millennium Build Home Private Limited and not to Shri Ajay Bakliwal in his individual capacity Thus, the show cause notice issued by your honour under section 274 read with section 271D may kindly be dropped/vacated. The assessee has not committed any default under section 269SS of the Income Tax Act, 1961. The facts on record Indicate and establish the following:- A. The agreement has been signed by Shri Ajay Bakliwal as director of M/s Millennium Build Home Private Limited, Kota with Shri Mayank Jain and Shri Harish Kohli. B. The amount of Rs.25,00,000/- was received by Shri Ajay Bakliwal as an advances against sale of 7 shops in Millennium Apartment at Parvati Puram Kota which were constructed and owned by M/s Millennium Build Home Private Limited, Kota. C. Shri Ajay Bakliwal did not owned or construct Millennium Apartment at Parvati Puram, Kota. D. The assessee Shri Ajay Bakliwal had acted in a representative capacity as director of M/s Millennium Build Home Private Limited, Kota and has got nothing to do in his individual capacity with the Millennium Apartment Parvati Puram, Kota or with the advance of Rs.25,00,000/- received against booking of 7 shops of Millennium Apartment, Parvati Puram, Kota. E The issue of sale of flats and shops stands considered in the hands of M/s Millennium Build Home Private Limited, Kota as per assessment order for A'Y. 2016-17. F. The leamed AO erred in referring the matter for imposing of penalty under section 271D of the Income Tax Act 1961 under a wrong impression and on wrong appreciation of facts to your kind honour. Kindly drop the penalty proceedings and oblige. 3.1 Ld. AO considered the submission of the assessee and found not acceptable. In his reply, the assessee has asserted agreement on sale of shops at Millennium Apartment, Parvati Puram, Kota was between M/s Millennium Build Home Pvt. Limited, Kota and Shri Mayank Jain & Shri 7 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT Harish Kohli wherein that agreement was signed by Shri Ajay Bakliwal as director of M/s Millennium Build Home Pvt. Ltd., Kota. The amount of Rs.25,00,000/- was received by Shri Ajay Bakliwal as a representative capacity as director of M/s Millennium Build Home Pvt. Ltd., Kota which were constructed and owned by the aforesaid company and not by Shri Ajay Bakliwal in his individual capacity. Ld. AO noted that while making this submission the assessee has conveniently ignored the cancellation deed dated 29.01.2016 of the said shops in which it is clearly mentioned that Shri Mayank Jain and Shri Harish Kohli has taken back the amount of Rs.25,00,000/- from Shri Ajay Bakliwal. There is no mention of any transaction between M/s Millennium Build Home Pvt. Ltd., Kota and both the buyers. Hence, the contention of the assessee completely differs from the facts as stated in cancellation deed. The cancellation deed was made part of the penalty order by the ld. AO. The assessee has further submitted that the bookings as well as advanced amount of these Flats of Millennium Apartment, Parvati Puram, Kota have been considered in the assessment order of M/s Millennium Build Home Pvt. Ltd. But, in the assessment order of M/s Millennium Build Home Pvt. Ltd. a table of booking status and cash received against booking 8 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT amount has been incorporated and made part of assessment order after analysis of seized exhibits. The details of the cash received are described at page No.3 and 4 of assessment order dated 28.12.2019 of M/s Millennium Build Home Pvt. Ltd. for A.Y. 2016-17. The names of Shri Mayank Jain and Shri Harish Kohli are not mentioned in the name of flat purchaser column in the given table. On perusal of Form No.3CD of M/s Millennium Build Home Pvt. Ltd for F.Y. 2015 16 (corresponding to A.Y. 2016-17) it is noticed that in column No. 31(a) particulars of each deposit in an amount exceeding the limit specified in section 269SS taken or accepted during the previous year are reported by the company. The transaction done by Shri Ajay Bakliwal with Shri Mayank Jain and Shri Harish Kohil is not reported in column No.31(a) of the form No. 3CD. Hence, the claim of the assessee that money was received by him on behalf of the company is not found correct. Further, the \"Ikrarnama\" (on the basis of which the assessee is claiming that money is received on behalf of the company) is an unregistered document prepared on a simple Rs.100 stamp paper. The Stamp Paper was purchased by Shri Ajay Bakliwal as noted on the back of the stamp paper. Therefore, the claim of the assessee that the amount of cash of Rs.25,00,000/- was received on behalf of the company was not acceptable to the ld. AO for the following reasons:- 9 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT (i) The amount of cash was not deposited in cash book or account of the company. (ii) While returning the money as per cancellation deed the cash was not withdrawn from cash on hand of company or from any bank account of the company (iii) As per 3CD report of the company for corresponding assessment year also the cash received from Shri Mayank Jain and Shri Harish Kohil was not reported. (iv) The name of the company is not mentioned in the cancellation deed dated 29.01.2016. Thus, ld. AO inferred that the transaction made between Shri Ajay Bakliwal and Shri Mayank Jain & Shri Harish Kohli for the sale of shops is in his individual capacity and contravened the provision of section 269SS of the Income Tax Act. Further, in the assessment proceeding, the assessee was asked to submit details regarding the above transaction. The assessee has replied that the deal was cancelled, and the amount was returned. The assessee has accepted that he has taken cash of Rs.25,00,000/- from Shri Mayank Jain and Shri Harish Kohli as advance against sale of shops at Millennium Apartment, Parvatipuram, Kunhadi Kota on 06.06.2015. The assessee returned the amount in cash on cancellation of the deal on 23.02.2016. Thus, it is established that the assessee has accepted aforesaid cash and violated the provisions of section 269SS of the Income Tax Act, 1961 and thereby levied the penalty of Rs. 25,00,000/-. 10 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT 4. Aggrieved from that order levying penalty by the Addl. CIT, Central Range, Udaipur the assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below: Validity of penalty order passed u/s 271D of the Act and imposing a penalty of Rs. 25,00,000/- 4.3 I have considered the facts of the case and written submissions of the appellant as against the observations/findings of the Addl./Jt. CIT in the Penalty order for the year under consideration. The contentions/submissions of the appellant are being discussed and decided as under- Facts of the case are considered. The arguments put forth by the appellant are discussed and decided as under- The appellant argued that the assessee is an individual proprietor of M/s Nav Bharat Nirman Co., C-9, Ballabhbari, Kota as well as also Director in the company of M/s Millennium Build Home Pvt. Ltd whose office is also at C-9, Ballabhbari, Kota That during the course of search action carried on at the office of the assessee on 07.09 2017, some paper Exhibit No. 22, Page No. 91 & 92 was found. It is argued that on behalf of the company, assessee executed agreement to sale of shops in favour of Sh. Mayank Jain & Sh. Harish Kohli. This paper was seized and marked as page No. 91 of Exhibit 22. On perusal the seized document page no. 91, it is crystal clear that the agreement to sale of six shops which belongs to M/s Millennium Build Home Pvt. Ltd. at plot no. 1 at Parvatipuram, Kota was executed by Ajay Bakliwal assessee on behalf of representative capacity of M/s Millennium Build Home Pvt. Ltd., Kota. The argument of the appellant are considered. The place from the document was seized was common office of assessee as well as the Company. Hence, it is not the case of the AO that the document was seized exclusively from the office of the Company. The Company is an artificial juristic Person created by operation of law. The paper found can be considered of the company is it is entered in the books of accounts of the Company or it is proved beyond doubt by the Director or chief Executive Officer of the Company that the unaccounted transactions were to be recorded in the books of accounts in due course. In this regard the JCIT noted that the \"Ikrarnama\" (on the basis of which the assessee is claiming that money is received on behalf of the company) is an unregistered document prepared on a simple Rs. 100 stamp paper. The Stamp 11 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT Paper was purchased by Shri Ajay Bakliwal as noted on the back of the stamp paper. Therefore, claim of the assessee that the amount of cash of Rs.25,00,000/- was received on behalf of the company is not acceptable. The assessee has not explained may questions with regard to this transaction. The question which comes in the mind after considering the reply of the assessee are as under- -if, the agreement was on behalf of the Company, then why the stamp paper was purchased in the name of the assessee and not in the the Company? -Why the agreement was not registered? -How many similar unregistered and unaccounted transactions were undertaken by the Director which are not actually entered in the books of accounts of the Company ? - Is such transactions are in the knowledge of other shareholders and management of the Company? - Is the Director has committed a fraud by accepting money in the name of Company and not depositing money in the books of accounts of the Company? The probable answers to these querries will prove that the transaction were not belonging to the Company. This is established by the documents further relied upon by the JCIT. It is argued that the Ld. Jt. Commissioner of Income Tax, Central, Udaipur has relied on cancellation of the above agreement deed which was not the subject matter of Provision of Section 26955. The JCIT stated in the penalty order that in the cancellation deed dated 29.01.2016 of the said shops, it is clearly mentioned that Shri Mayank Jain and Shri Harish Kohli has taken back amount of Rs. 25,00,000/- from Shri Ajay Bakliwal. There is no mention of any transaction between M/s Millennium Build Home Pvt. Ltd., Kota and both the buyers. Hence, the contention of the assessee completely differs from the facts as stated cancellation deed. The cancellation deed is annexed with the penalty order and is made part of this order. If the transaction was entered between the Company and the buyers, then the money should have been received back from the company. However, as per the cancellation deed, the assessee has returned the money. This proves that the money was received by the assessee in his individual capacity. As per the facts, the assessee has accepted cash of Rs.25,00,000/- from Shri Mayank Jain and Shri Harish Kohli as advance in the name of sale of shops at 12 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT Millennium Apartment, Parvatipuram, Kunhadi Kota on 06.06.2015. The assessee returned the amount in cash on cancellation of deal on 23.02.2016. The period is not a short period. The amount was never handed over to the company and was utilized by the assessee for his own purpose. For the sake of arguments, without prejudice to the above, even if, it is assumed that money was taken in the name of Company, the money was not handed over by the assessee to the Company as this money never entered in the books of the Company. Hence, the money remained with the assessee only and after using the money for his own purpose, he returned the money. This may be considered as fraud with the Company, however, the uncontroverted fact remains that the cash was accepted by the assessee from these two persons and it was returned back. It is argued that the agreement to sale & cancellation both the document executed before end of the year and no payment were in the hand of company at the end of the year and hence the same was not the part of 3CD. The argument of the appellant are found to be against the provisions and columns of form 3CD which require reporting of squared up loans and advances as well. For the sake of convenience, the relevant column of form 3CD are reproduced as under- 31.(a) Particulars of each loan or deposit in an amount exceeding the limit specified in section 269SS taken or accepted during the previous year- (i)name, address and Permanent Account Number (if available with the assessee) of the lender or depositor, (ii) amount of loan or deposit taken or accepted; (iii) whether the loan or deposit was squared up during the previous year; (iv)maximum amount outstanding in the account at any time during the previous year, \"(v)whether the loan or deposit was taken or accepted by cheque or bank draft or use of electronic clearing system through a bank account;\" (vi) in case the loan or deposit was taken or accepted by cheque or bank draft, whether the same was taken or accepted by an account payee cheque or an account payee bank draft (b) Particulars of each specified sum in an amount exceeding the limit specified in section 269SS taken or accepted during the previous year- 13 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT (i)name, address and Permanent Account Number (if available with the assessee) of the person from whom specified sum is received: (ii)amount of specified sum taken or accepted: (iii) whether the specified sum was taken or accepted by cheque or bank draft or use of electronic clearing system through a bank account; (iv) in case the specified sum was taken or accepted by cheque or bank draft, whether the same was taken or accepted by an account payee cheque or an account payee bank draft. (Particulars at (a) and (b) need not be given in the case of a Government company, a banking company or a corporation established by the Central, State or Provincial Act)....” It is evident that as per form 3CD, particulars of each loan or deposit in an amount exceeding the limit specified in section 269SS taken or accepted during the previous year shall include the loan or deposit squared up during the previous year. In view of clear columns of form 3CD, the argument of the assessee do not hold good that agreement to sale & cancellation both the document executed before end of the year and no payment were in the hand of company at the end of the year and hence the same was not the part of 3CD. The transaction, if belonging to the company, it was mandatory to report it in the form 3CD. In this case, the assessee has taken money in the name of the company for his utilization and not taken the money on behalf of the company as argued. The assessee kept the cash with him and returned after using the money as per his convenience. The assessee never handed over the money to the Company. It is argued that the Ld. JCIT has imposed penalty without establishing that the agreement dated 06.06.2015 was not genuine. If this agreement is not considered as genuine then there is no receipt and hence no penalty can be imposed. The agreement is not considered as true to the fact that cash transaction took place. The document was found from the possession of the assessee. The Onus is on the assessee to prove the claims made with respect to the seized documents. The assessee failed to establish that the money was received by him on behalf of the Company because he never handed over the money to the Company. The stamp paper was purchased in the name of the assessee and not in the name of the Company. In the form 3CD of the Company, this transaction not appeared. These facts prove that the money was received by the assessee and it was kept with him and utilized and returned by him. It is argued that it is also not the case of the Ld. JCIT that the Millennium Apartment is owned by assessee if the Multistoried building Millennium Apartment 14 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT is not owned by the assessee then how can be penalty be imposed upon him for receipt of money against sale of shops of Millennium Apartment. The argument of the appellant are not found to be relevant. Purpose of transaction is not relevant. Hence, the ownership of the property mentioned in the document is not relevant. What is relevant is the transaction of any loan or deposit or any specified sum. Hence, even if the properties mentioned in the seized documents are ignored, the violation of section 269SS is established. The sum so The relevant section 269SS is reproduced as under- \"269SS. Mode of taking or accepting certain loans, deposits and specified sum.-No person shall take or accept from any other person (herein referred to as the depositor), any loan or deposit or any specified sum, otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account, if,- From the plain reading of the provisions of section 269SS, it is evident that in case a person takes or accepts from any other person, the specified sum, otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account, if the amount is of Rs. twenty thousand or more, provisions of section 269SS are contravened. Supreme Court Of India in the case of Al Ameen Educational Trust v. Commissioner of Income-tax [2021] 131 taxmann.com 127 (SC)/(2021) 283 Taxman 285 (SC)[14-09-2021] held that assessee failed to discharge its burden in proving that there was a reasonable cause in accepting deposits from staff members in violation of section 269SS, the SLP filed by the aseessee was dismissed. The head notes of the decision read as under- \"Section 269SS, read with sections 2710 and 2738, of the Income-tax Act, 1961- Deposits Mode of taking/accepting (Penalty) - Assessment year 2005-06-During relevant year, assessee accepted deposits from staff members in cash in violation of provisions of section 269SS-Assessing Officer thus passed a penalty order under section 271D High Court by impugned order held that since assessee failed to discharge its burden in proving that there was a reasonable cause in accepting deposits from staff members, mere fact that deposits were directly received in bank account and refunds were also made in bank account of staff members, would not offer any mitigation under section 2738 and therefore, impugned penalty order was to be confirmed Whether special leave petition filed against impugned order was to be dismissed as withdrawn-Held, yes [Para 3] [In favour of revenue)\" In the present case also, the assessee failed to discharge its burden in proving that there was a reasonable cause in accepting cash in violation of section 269SS. Supreme Court Of India in th case of Vasan Healthcare (P.) Ltd. v. Additional Commissioner of Income Tax Range 2. Chennai [2021] 125 taxmann.com 266 (SC)/[2021] 278 Taxman 273 (SC)[22-01-2021] held that further utilization of cash 15 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT by the receiver is not considered as reasonable cause for violation Section 269SS, read with sections 271D of the Income-tax Act, 1961. The head notes of the decision read as under- \"Section 269SS, read with sections 271D and 2738, of the Income-tax Act, 1961- Loans/deposits, mode of taking (Penalty under section 271D) - Assessment year 2015-16-Director of assessee-company obtained loan/cash exceeding Rs. 20,000 from financier JD-Loans so obtained were deposited by him in cash in bank account of assessee-company - In response to notice issued by Assessing Officer regarding violation of provisions of section 269SS, assessee explained that amount so received by director was deposited in company's bank account on very same day and same was utilized to pay salaries, rents and EMI commitments, thus, there was reasonable cause for having availed loan transactions Assessing Officer having rejected assessee's explanation, passed penalty order under section 271D- High Court by impugned order held that merely because director deposited cash obtained by it from JD in current account of assessee-company on very same day and assessee utilized it to pay salaries, rent and EMI commitments, same could not be a ground to be taken as a mitigating factor to escape from rigour of levy of penalty under section 2710 Whether special leave petition filed against impugned order was to be dismissed - Held, yes [Para 3] [in favour of revenue] High Court Of Rajasthan in the case of Commissioner of Income-tax v. Chandra Cement Ltd [2016] 74 taxmann.com 75 (Rajasthan)/[2017] 393 ITR 324 (Rajasthan)/[2017] 291 GTR 581 (Rajasthan) [31-08-2016) held that Where assessee-company, engaged in setting up of cement plant, raised unsecured loan from Managing Director in cash in excess of Rs. 20,000, mere fact that said amount was utilized for payment of constructional activities directly would not alter character of deposits In the present case also, the assessee failed to discharge its burden in proving that there was a reasonable cause in accepting cash in violation of section 269SS read with sections 271D of the Income-tax Act, 1961. The assessee has also stated that the penalty levied u/s 271D is time barred as the time barring date shall be counted from the date of sending proposal by the AO. The issue raised by the assessee is not found to be acceptable. High Court Of Rajasthan in the case of Commissioner of Income-tax v. Hissaria Bros. [2008] 169 Taxman 262 (Rajasthan)/[2007] 291 ITR 244 (Rajasthan)/[2007] 211 CTR 156 (Rajasthan) [21-07-2006] considered this issue and held as under- \"19. Secondly, the Direct Tax Laws (Amendment) Act, 1987, which came into effect from 1-4-1989, section 275 was amended. Vide amendment, the time-limit for completion of penalty proceedings which was generally two years from the end of financial year in which such proceedings were completed or six months from the 16 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT end of the month in which action for imposition for penalty was initiated, whichever period expires later. 20. By these amendments, the three categories were made for applying limitation for completing the penalty proceedings taking into consideration the various penalty proceedings for default of certain provisions of the Income-tax Act which are not necessarily linked with proceedings for any particular assessment year in the course of which only penalty proceedings were required to be initiated. Such consequences of default were not linked with the principal assessment proceedings for any specific assessment year but were independent of it. 21. By substituting section 275(1), which became operative from 1-4-1989, the provision of divided cases for the purpose of prescribing limitation for completing penalty proceedings into three categories: (1) Category I covers cases where the assessment to which the proceedings for imposition of penalty relate is the subject-matter of an appeal to the Dy. CIT(A) or the CIT(A) under section 246 or with effect from 1-6-2000, section 2464 or an appeal to the Tribunal under section 253 Category II covers cases where the relevant assessment is the subject-matter of revision under section 263, and Category III covers all other cases not falling within category I and category II (m) which is governed by clause (c). By dividing into three categories the period of limitation for cases falling under category (i), ie, clause (1)(a) is 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 the order of the Dy. CIT(A) or the CIT(A) or, as the case may be, the Tribunal is received by the Chief CIT or CIT, whichever period expires later. 22. The period of limitation for the cases falling under category II is six months from the end of the month in which such order on revision is passed and the period of limitation for the cases falling under the above category III is 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, whichever period expires later. In the last category, filing of appeal in respect of order passed in proceedings during which penalty proceedings were initiated is not relevant. To this effect, a Circular No. 551, dated 23-1-1990 [(1990) 82 CTR (St.) 325] and another Circular No. 554, dated 13-2-1990 [(1990) 82 CTR (St.) 280] were issued by the CBDT. 17 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT 23. A close scrutiny of section 275 which is reproduced hereinabove shows that clause (1)(a) covers those cases where the penalty proceedings are in respect of a default related to principal assessment for a particular assessment year and the penalty proceedings are required to be initiated in the course of that proceedings only. In such cases where the relevant assessment order or other orders are the subject-matter of an appeal to the CIT(A) under section 246 or an appeal to the Tribunal under section 253, 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 the order of CIT(A) or, as the case may be, of the Tribunal is received by the Chief CIT or CIT, whichever period expires later. Apparently, clause (a) governs the categories which are integrally refated to the assessment proceedings and are not independent of it. 24. We have also noticed that this provision was brought into effect in 1970 with effect from 1-4-1971, so that proceedings may not require rectification or modification depending on the outcome of the appeal against the orders passed in the relevant assessment proceedings or the other proceedings in the course of which the penalty proceedings are required to be initiated. 25. We have also noticed that sections 271 and 273 were the two original penalty provisions, which require the penalty proceedings to be initiated during the course of relevant assessment proceedings or the other relevant proceedings, as the case may be. The penalty proceedings could also be initiated during the appellate proceedings arising out of the relevant assessment proceedings. It is only where the assessment proceedings are independent and not directly linked to the assessment proceedings that the result of such proceedings in the course of which the penalty proceedings were initiated does not affect the levy of penalty. On such penalty proceedings, independent of the assessment proceedings, clause (c) has been made applicable. In this category, the period of limitation for completing the perialty proceedings is linked with the initiation of the penalty proceedings itself. In such cases, the penalty proceedings can be initiated independent of any proceedings but obviously, the penalty proceedings can be initiated only when the default is brought to the notice of the concerned authority which may be during the course of any proceedings and, therefore, for this type of cases where the penalty proceedings have been initiated in corinection with the defaults for which no statutory mandate is there about any particular proceedings during the course of which only such penalty proceedings can be initiated, a different period of limitation has been prescribed under clause (c) as a separate category. In cases falling under clause (c), penalty proceedings are to be completed within six months from the end of the month in which the proceedings during which the action for imposition of penalty is initiated, are completed, or six months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later. There is no provision under clause (c) for the extended period of limitation commensurating with completion of the appellate proceedings, if any, arising from 18 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT the proceedings during the course of which such penalty proceedings are initiated as in the case where the penalty proceedings are linked with the assessment proceedings or the other relevant proceedings 26. The expression 'other relevant thing' used in section 275(1)(a) and clause (b) of sub-section (1) of section 275 is significantly missing from clause (c) of section 275(1) to make out this distinction very clear. 27. We are, therefore, of the opinion that since penalty proceedings for default in not having transactions through the bank as required under sections 26955 and 269T are not related to the assessment proceedings but are independent of it, therefore, the completion of appellate proceedings arising out of the assessment proceedings or the other proceedings during which the penalty proceedings under sections 271D and 271E may have been initiated has no relevance for sustaining or not sustaining the penalty proceedings and, therefore, clause (a) of sub-section (1) of section 275 cannot be attracted to such proceedings. If that were not so, clause (c) of section 275(1) would be redundant because otherwise, as a matter of fact every penalty proceeding is usually initiated when during some proceedings such default is noticed, though the final fact finding in this proceeding may not have any bearing on the issues relating to establishing default, e.g., penalty for not deducting tax at source while making payment to employees, or contractor, or for that matter not making payment through cheque or demand draft where it is so required to be made. Either of the contingencies does not affect the computation of taxable income and levy of correct tax on chargeable income; if clause (a) was to be invoked, no necessity of clause (c) would arise.\" Hon'ble High Court in this case held that CIT v. Hissaria Bros. [2007] 291 ITR 244/[2008] 169 Taxman 262 (Raj.), completion of appellate proceedings arising out of assessment proceedings has no relevance over sustaining such penalty proceedings. In such matter, clause (c) of section 275(1) would be applicable. In the above decision Hon'ble High Court held that on such penalty proceedings, independent of the assessment proceedings, clause (c) has been made applicable. In this category, the period of limitation for completing the penalty proceedings is linked with the initiation of the penalty proceedings itself In such cases, the penalty proceedings can be initiated independent of any proceedings but obviously, the penalty proceedings can be initiated only when the default is brought to the notice of the concerned authority which may be during the course of any proceedings and, therefore, for this type of cases where the penalty proceedings have been initiated in connection with the defaults for which no statutory mandate is there about any particular proceedings during the course of which only such penalty proceedings can be initiated, a different period of limitation has been prescribed under clause (c) as a separate category. In cases falling under clause (c), penalty proceedings are to be completed within six months from the end of the month in which the proceedings during which the action for imposition of penalty is initiated, are completed, or six months from the end of the 19 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT month in which action for imposition of penalty is initiated, whichever period expires later. In the present case, the Penalty u/s 271D was initiated on 24.12.2021. The penalty order was passed on 22.06.2022. Hence, the order is passed six months from the end of the month in which action for imposition of penalty is initiated. Hence, the penalty order is passed within the prescribed time limit. The order of the Hon'ble High Court was affirmed by Hon'ble Supreme Court in the case of Commissioner of Income-tax, Bikaner v. Hissaria Brothers, Hanumangarh Jn. (2016) 74 taxmann.com 22 (SC)/[2016] 243 Taxman 174 (SC)/[2016] 386 ITR 719 (SC)/(2016) 288 CTR 244 (SC)[22-08-2016]. The ITAT Chennai Bench 'A' in the case of Sri Sai Balaji Gas Cylinder (P.) Ltd. v. Assistant Commissioner of Income-tax (OSD) [2023] 155 taxmann.com 319 (Chennai -Trib.) [09-06-2023] considered this issue and held as under- 12. We have gone through the arguments of the Ld. Counsel for the assessee in light of provisions of sec. 271D & 271E of the Act, and in light of limitation prescribed u/s.275(1)(c) of the Act. After careful consideration, we are of the considered view that the action for imposition of penalty proceedings is initiated, when the AO imposing penalty is issued notice u/s. 274 r.w.s.271D & 271E of the Act, which is very clear from the provisions of sec.275(1)(c) of the Act, that no order imposing penalty under this chapter shall be made, unless the assessee has been heard or has been given a reasonable opportunity of being heard. Therefore, we are of the considered view that there is no merits in the arguments of the Ld. Counsel for the assessee that the limitation as provide u/s 275(1)(c) of the Act, commence the moment, the AO sent a proposal to the Joint / Addl. CIT for imposition of penalty. We further noted that the AO who is competent to initiate and levy penalty u/s. 271D & 271E of the Act, is the Joint/Add! CIT is concerned range, but not the AO. Therefore, the date of proposal sent by the AO to the Joint/Addl. CIT for initiation of penalty proceedings is not relevant, because, the satisfaction of the AO who is competent to initiate penalty proceedings u/s. 271D & 271E of the Act, is necessary and important to decide whether penalty proceedings can be initiated or not. Therefore, the actual date that needs to be reckoned for the purpose of limitation as prescribed u/s. 275(1)(c) of the Act, is the date of notice issued u/s.274 r.w.s.271D & 271E of the Act, but not the date of proposal sent by the AO. In this case, if you consider the date of notice issued u/s 274 r.w.s.271D & 271E of the Act, le. 03.08.2018, the limitation prescribed u/s. 275(1)(c) of the Act runs up to 28.02.2019 since the AO passed order imposing penalty u/s 271D & 271E of the Act, on 20.06.2019. In our considered view, the order passed by the AO is well within time limit prescribed sec. 275(1)(c) of the Act, and thus, we reject the arguments taken by the Ld. Counsel for the assessee on limitation. The assessee has relied upon the decision of the Hon'ble Delhi High Court in the case of Rishikesh Buildcon (P.) Ltd. (supra), and argued that the Hon'ble Delhi High Court held that the limitation prescribed u/s. 275(1)(c) of the Act, commenced from 20 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT the date the AO sent a proposal to the Joint/Addl. CIT for penalty proceedings, but not from the date the Officer imposing penalty notice issued u/s 274 r.w.s.271D & 271E of the Act. We find that the Hon'ble Delhi High Court had considered the issue in light of the facts where there is a huge gap of nearly five years from the date, the AO sent a proposal to the Officer imposing penalty and the notice issued by the Officer imposing penalty and under those facts, the Hon'ble Delhi High Court came to the conclusion that the limitation prescribed u/s. 275(1)(c) of the Act, runs from the date the AD sent proposal for initiation of penalty proceedings. In the present case, the AO sent a proposal for initiation of penalty proceedinge on 24 07 2018 and the AO issued notice u/s 2710 & 2718 of the Act on 03.08.2018, within less than a month. Therefore, we are of the considered view that the ratio laid down by the Hon'ble Delhi High Court in the above case, is not applicable to the facts of the present case The assessee had also relied upon the decision of the Hon'ble Delhi High Court in the case of Mahesh Wood Products (P) Ltd., We find that the facts of the case before the Hon'ble Delhi High Court are entirely different to the facts of the present case, and thus, we are of the considered view that the case laws relied upon by the Ld Counsel for the assessee is not applicable to the facts of the present case Following the decision of the Hon'ble ITAT it is held that the action for imposition of penalty proceedings is initiated, when the AddI. CIT imposing penalty is issued notice u/s.274 r.w.s.271D & 271E of the Act, which is very clear from the provisions of sec.275(1)(c) of the Act, that no order imposing penalty under this chapter shall be made, unless the assessee has been heard or has been given a reasonable opportunity of being heard. The date of proposal sent by the AO to the Joint/Addl. CIT for initiation of penalty proceedings is not relevant, because, the satisfaction of the Joint/Addl. CIT who is competent to initiate penalty proceedings u/s. 271D & 271E of the Act, is necessary and important to decide whether penalty proceedings can be initiated or not. Therefore, the actual date that needs to be reckoned for the purpose of limitation as prescribed u/s. 275(1)(c) of the Act, is the date of notice issued u/s 274 r.w.s.271D & 271E of the Act, but not the date of proposal sent by the AO or the date of assessment order. The appellant placed reliance on the decision of High Court Of Rajasthan in the case of Commissioner of Income-tax, Udaipur v. Jitendra Singh Rathore (2013) 31 taxmann.com 52 (Rajasthan)/[2013] 352 ITR 327 (Rajasthan)/[2013] 257 CTR 18 (Rajasthan) [10-01-2013) Hon'ble High Court in that case held as under- \"In the present case, the first show cause notice for initiation of proceedings was issued by the Assessing Officer on 25-3-2003 and was served on the assessee on 27-3-2003 Obviously, the later period also expired on 30-9-2003 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 for the penalty under 21 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT section 271D on 28-5-2004 was clearly hit by the bar of limitation and has rightly been set aside in the orders impugned. [Para 9] Even when the authority competent to impose penalty under section 2710, was the Joint Commissioner, the period of limitation for the purpose of such penalty proceedings was not to be reckoned from the issue of first show cause by the Joint Commissioner, but the period of limitation was to be reckoned from the date of issue of first show cause for initiation of such penalty proceedings.\" In the case relied upon by the appellant, it was held that the period of limitation for the purpose of such penalty proceedings was not to be reckoned from the issue of first show cause by the Joint Commissioner but the period of limitation was to be reckoned from the date of issue of first show cause for initiation of such penalty proceedings. The assessee in the present case has not established that the fist show cause notice for initiation of such penalty proceedings was initiated by JCIT or the AO before 24.12.2021. Hence, the decision relied upon by the appellant are not found to be applicable on the facts of the present case. Considering the provisions of Income Tax act, the order for imposing the penalty is considered as passed within the prescribed time limit. In view of the foregoing discussion and considering facts of the case and considering the provisions of section 269SS of the Act, 1961, it is concluded that the assessee has violated the provisions of section 269SS of the I. T. Act, 1961 without any reasonable cause. Therefore, the decision of JCIT in levying penalty u/s 271D of the I. T. Act, for violation of provisions of section 269SS of the 1. T. Act is upheld. Accordingly, the penalty of Rs. 25,00,000/- imposed u/s 271D of the I. T Act for A.Y. 2016-17 is confirmed. 5. The last Ground of Appeal is that the appellant craves to add/alter/amend the Grounds of Appeal before the final hearing is completed. 5.1 The appellant has not added, altered or amended any of the above-mentioned grounds of appeal. Accordingly, such mention by the appellant in its ground is treated as general in nature, no needing any specific adjudication and is accordingly treated as disposed off. 6. In the result, the appeal of the appellant is treated as dismissed. 5. As the assessee did not find any favour, from the appeal so filed before the ld. CIT(A), the assessee has preferred the present appeal before this Tribunal on the ground as reproduced hereinabove. To support the 22 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT various grounds raised by the assessee, ld. AR of the assessee, has filed a detailed written submission which reads as under : “Briefly stated the facts of the case are that a search was conducted on 07.09.2017, at the residential cum office premises of the assessee. During the course of search, certain loose papers were found from the premises of the assessee, which were inventorised as Exhibit-22 of Ann.-AS. These impugned loose papers (page-90-92) were a sale agreement of shops, situated at the ground floor of Millenium Apartment, which was constructed and owned by Millenium Builhome Pvt. Ltd., and the assessment of which has been completed by the AO u/s 153C. During the course of assessment, the Ld.AO on the basis of these papers (page-91 & 92, ignoring page-90), concluded that the assessee has accepted cash of Rs.25,00,000/- in the form of advance against sale of these shops, and had thus, violated the provisions of section 269SS. It would be pertinent to mention that the advance had been accepted by the assessee in his capacity as Director of Millenium Builhome Pvt. Ltd., and not in his individual capacity. The AO passed on this information to the Addl.CIT, who levied penalty u/s 271D. The penalty order passed by the Addl.CIT was time barred. The appeal of the assessee was dismissed by the CIT(A) on the legal as well as factual issue. Submission on the grounds of apeal Ground No.1 The Ld.CIT(A) has erred in confirming the penalty order dated 22.06.2022 passed by the JCIT- Central, Udaipur which was clearly barred by limitation u/s 275(1)(c) of the Act At the outset, it is submitted that based on the undisputed facts available on record, imposition of penalty vide the impugned order u/s 271D passed by the ld. JCIT, Jaipur on 22.06.2022, is clearly barred by the limitation in as much as, the law u/s 275(1)(c) reads as under: 275. (1) No order imposing a penalty under this Chapter shall be passed x---------------x-----------------------x-------------------x------------------------------x-----------x 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, whichever period expires later. It may be noted that the provision uses the phrase initiation of action for imposition of penalty which does not mean the imposition of penalty itself but it is a preliminary exercise and the AO being the first person who can possibly notice the contravention, mostly during the course of assessment proceedings and the competent authority being JCIT, who is the person to impose the penalty, therefore, the fact of contravention must be noted by the AO who may refer it to the JCIT. 23 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT Such reference is the initiation of action for imposition of penalty, as contemplated by the law. Thus, the law contained u/s 275(1)(c) does not provide that the limitation to be reckoned from the end of the month in which the competent authority (JCIT) issued a SCN, which is not the initiation of such action for he may wake up after 10-20 year, issues SCN and impose penalty in 6 month, is against legislative intent. Therefore, the phrase action for imposition of penalty should mean the action taken by any other income tax authority for eg. the AO in this case, but not by the competent authority. Supporting Case Laws: This legislative intention is very clear and this contention is fully supported by decisions of Hon’ble Rajasthan High Court. JCIT Vs. Jitendra Singh Rathore [2013] 352 ITR 327(Raj) held as under: “Penalty under s. 271D—Limitation under s. 275—Applicability of cl. (a) or cl. (c) of s. 275(1)—Show-cause notice was served on the assessee by AO on 27th March, 2003—Thereafter, the matter was referred to the Jt. CIT on 22nd March, 2004— Penalty levied by Jt. CIT by order dt. 28th May, 2004 was clearly barred by limitation—Sec. 275(1)(c) was applicable to the case—Even when the authority competent to impose penalty under s. 271D was the Jt. CIT, the period of limitation for the purpose of such penalty proceedings was not to be reckoned from the issue of show cause by the Jt. CIT, but the period of limitation was to be reckoned from the date of issue of first show cause for initiation of such penalty proceedings”. CIT Vs. Hissaria Brothers [2016] 386 ITR 719 (SC) “Penalty under ss. 271D and 271E—Limitation under s. 275— Computation— Penalty orders under ss. 271D and 271E passed beyond six months from the end of the month in which the assessments were completed were barred by limitation— CIT vs. Hissaria Bros. (2007) 211 CTR (Raj) 156 affirmed.” Application over the Facts of Present case: No penalty u/s 271D could be imposed after the expiry of limitation prescribed being the later of (a) expiry of the related financial year or (b) within a period of 6 months from the end of the month in which action for imposition of penalty was taken by the Assessing Officer. The ld. JCIT in the impugned penalty order has observed that the assessment for AY 2016-17 was completed by the ACIT, Central Circle, Kota u/s 143(3) r.w.s. 153A of the Act on 28.12.2019 stating as under: As per page No. 91 & 92 of Exhibit-22 Sh. Ajay Kumar Baikliwal has made agreement with Sh. Mayank Jain and Sh. Harish Kohli for sale of six shops situated at ground floor of multistory Millennium Apartment and received Rs. 25,00,000/- advance in cash on 06.06.2015 which is contrary to the provisions of section 269SS. Accordingly, a reference was made by the ACIT Central Circle 24 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT Kota to this office for considering initiating penalty proceedings u/s 271D of the Income Tax Act against the assessee. Thus, the relevant proceedings are the assessment proceedings which stood completed on 28.12.2019 falling in the FY ending on 31.03.2020, which is the first time limit. The action for imposition of penalty can also be said to be the date of the assessment order itself i.e., 28.12.2019 during the course of which, the AO observed the contravention of S.269SS receiving cash in excess of the prescribed limit. Hence 6 months from 31.12.2019 expires on 30.06.2020, which is the second time limit, and being the later time limit, the JCIT was supposed to have imposed the penalty on/before 30.06.2020. However, as against 30.06.2020, the Jt. CIT imposed the penalty much later i.e. on 22.06.2022. Therefore, the same is clearly barred by limitation and has to be quashed. Levy of penalty was held to be barred by limitation .[ S. 153A, 269SS, 269T, 271D, 271E, 275 (1) (c) ] Dismissing the appeal of the revenue, the Court held that; under section 275 (1) (c) of the Income-tax Act, 1961, the starting point of “initiation” of penalty proceedings, would be the date on which the Assessing Officer wrote a letter to the Additional Commissioner recommending the issuance of the notice. Though the Additional Commissioner had the discretion whether or not to issue a notice, if he did decide to issue a notice, the limitation would begin to run from the date of the letter sent by the Assessing Officer recommending “initiation” of the penalty proceedings. In the assessee’s case, the limitation under section 275 (1) (c) began to run on July 23, 2012 and the last date for passing the penalty orders was January 31, 2013. Therefore, the penalty orders issued on February 26, 2013 were barred by limitation. No question of law arose. (AY. 2009- 10) PCIT v. Mahesh Wood Products Pvt. Ltd. (2017) 394 ITR 312/154 DTR 154 (Delhi) (HC) Further it may be clarified that the provisions contained u/s 275(1)(a) have got no relevance and are not applicable on the facts of this case because the completion of the appellate proceedings whether arising from assessment or any other proceedings during which penalty proceedings for S.271D and 271E are initiated have got no relation with the computational or assessment aspect therefore such appellate proceedings are not relevant for sustaining such type of penalties. Even otherwise, no appeal was filed by the assessee against the assessment order. It has been held that in such cases, S.275 (1)(a) has got no application. Kindly refer CIT Vs. Hissaria Brothers [2016] 386 ITR 719 (SC) (para 27). “27. By these amendments, the three categories were made for applying limitation for completing the penalty proceedings taking into consideration the various penalty proceedings for default of certain provisions of the Income-tax Act which are not necessarily linked with proceedings for any particular assessment year in the course of which only penalty proceedings were required to be initiated. Such consequences of default were not linked with the principal assessment proceedings for any specific assessment year but were independent of it.” 25 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT In this regard, CBDT issued circular No.10/2016 dated 26.04.2016 (copy enclosed) making it clear that the period of limitation of penalty proceedings u/s 271D & 271E of the Act is governed by the provisions of section 275(1)(c) of the Act. The assessee would finally like to place reliance on the decisions of jurisdictional ITAT, Jaipur, wherein the penalty levied u/s 271D has been deleted on legal issue of the same getting time barred, without going into the merits of the case- (i) Ram Kishan Verma vs. Addl. CIT in ITA No.405/JP/2019 (ii) Jagdish Chandra Suwalka vs. JCIT in ITA No.376/JP/2022 In case M.D.S. University vs. ACIT(TDS) (2014) 161 TTJ (Jp)(UO) 11, it was held as under: \"Penalty under s. 271C--Limitation under s. 275(1)(c)--Computation—Proceedings for levying the penalty under s. 271C were initiated vide order dt. 19th March, 2009 which fell in the financial year 2008-09 ending on 31st March, 2009 and the action for imposition of penalty was initiated on 24th Dec., 2009 when the reference was made by the AO to the Addl. CIT (TDS)--Accordingly, six months from the end of the month in which the action for imposition of penalty was initiated expired on 30th June, 2010--Hence, the order imposing penalty under s. 271C could have been passed on or before 30th June, 2010-- Therefore, order levying penalty under s. 271C passed by the Addl. CIT on 18th Aug., 2010 was barred by limitation.\" The facts in the case of Jagdish Chandra Suwalka and the assessee are almost identical, as is reflected from the table below- Event Jagdish Chandra Suwalka Date Ajay Bakliwal Date Passing of Assessment order u/s 143(3) 28.12.2017 28.12.2019 Whether appeal filed No No Reference made by AO Not mentioned 02.03.2021 SCN issued by JCIT 06.11.2018 24.12.2021 Reply filed to SCN 04.01.2019 05.01.2022 Penalty order passed 28.05.2019 22.06.2022 The Hon’ble ITAT, after considering the decisions in the case of jurisdictional High Court, allowed the appeal of the assessee. In view of the law settled by Apex court, and the binding decisions of jurisdictional ITAT on the issue, the impugned penalty deserves to be quashed as having been levied after it became barred by limitation. Ground No.2. The Ld.CIT(A) has erred in confirming the penalty order dated 22.06.2022 passed by the JCIT- Central, Udaipur imposing penalty of Rs. 25,00,000/- under section 271D without appreciating the fact that the assessee had received the impugned amount not in his individual capacity but in the 26 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT capacity of Director of the company M/s Millennium Build Home Private Limited and the penalty, if any was to be levied, it had to be done in the hands of the Company. The facts of the case are that the assessment was completed on 28.12.2019 u/s 143(3) r.w.s.153A on the returned income. In para 5 of the assessment order, the Ld. A.O. has discussed regarding Violation of section 269SS, referring to page-91 & 92 of Ann-22 found and seized during the search, stating that the assessee had made agreement with Sh. Mayank Jain and Harish Kohli, for sale of his six shops situated at ground floor of his multistory building Millenium Apartmant and received Rs.25,00,000/- in cash on 06.06.2015 which is contrary to the provisions of section 269SS. At this juncture, it would be pertinent to mention that the scrutiny assessments of Millennium Build Home Private Limited u/s 143(3) r.w.s. 153C for AY 2012-13 to AY 2018-19 have been completed by the same AO and the issue involved in all these years was cash advances received on booking of flats/shops in Millenium Apartments. The AO was well aware that Millenium Build Home Private Limited is the owner of Millenium Apartments but still he chose to initiate the penalty proceedings for contravention of section 269SS, by misrepresenting the facts, by using the word ‘his’ making it to believe that the assessee was the owner of the shops and had the right to accept the advance as individual. The books of the assessee were before the AO and he was told that no such receipts are appearing in it. But he heavily relied on the language of the deed. It may be mentioned that the deeds are typed by deed writers and they have a set proforma which they invariably cut paste in deeds alike. This act on the part of the AO was malafide. In spite of the assessee telling him that the transaction related to Millennium Build Home Private Limited, he preferred to ignore it. Without further verifying the facts from the books of accounts of the assessee and without referring to the complete document of sale deed, the AO jumped to the conclusion that there is a violation of section 269SS on the part of Ajay Bakliwal. The AO, while referring the case to the JT.CIT for imposition of penalty, conveniently held back page-90 (the first page of the sale agreement) as the same would have revealed that the advance was being accepted by the assessee on behalf of the Company. In reply to the SCN against imposition of penalty issued by Jt.CIT, it was again reiterated that the advances have been received by Millennium Build Home Private Limited against sale of its shops, but the same was ignored. It may be mentioned that the money was being received by Millenium Buildhome Pvt. Ltd. against sale of its stock-in-trade, through the assessee. In such an eventuality, if there was any violation of section 269SS, the same is on the part of the Company and not Ajay Bakliwal. Finally, on page-5 of the assessment order, he has observed that since it is established and accepted by the assessee that transaction in cash above Rs.20,000/- occurred for sale of immovable property, therefore provision of section 269SS is applicable in the case of the assessee. The matter will be referred to the competent authority for taking necessary action. The assessment was finalized on 28.12.2019 accepting the returned income, after taking approval from the Jt.CIT 27 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT u/s 153D. The Ld.JCIT also gave the approval mechanically without looking into the above aspect. Thereafter, the AO went into hibernation. After 14 months, he woke up from his slumber and referred the matter to the Jt.CIT imposition of penalty. It would be pertinent to mention that the impugned property, i.e. Shops in Millenium Apartment, never appeared in the balance sheet of the assessee for any Financial year. So, when assessee is not the owner of these properties, how come the advance received against sale of these shops be considered in the hands of the assessee. Moreover, the cash advance received against the shops was never credited to the books of the assessee. The Jt.CIT ought to have proved this fact before inposing the penalty. The sale deed, relying on which, penalty has been imposed by the Jt.CIT, in no unambiguous terms, mentions that the advance against the impugned property is being taken by Ajay Bakliwal in his capacity as director of Millenium Buildhome Pvt. Ltd. Inspite of this fact, without verification of record of the assessee, the Competent Authority drew adverse inference and imposed penalty u/s 269SS of Rs. 25,00,000/-/- which is not in accordance with law & facts of the case. Without prejudice to the above, there did exist a reasonable cause in terms of section 273B of the Act. The amendment to section 269SS was made by Finance Act, 2015, to include the word specified sum. In order to curb generation of black money by way of dealings in cash in immovable property transactions it was proposed to amend section 269SS, of the Income-tax Act so as to provide that no person shall accept from any person any loan or deposit or any sum of money, whether as advance or otherwise, in relation to transfer of an immovable property otherwise than by an account payee cheque or account payee bank draft or by electronic clearing system through a bank account, if the amount of such loan or deposit or such specified sum is twenty thousand rupees or more. This amendment was made applicable from 01.06.2015. The advance was accepted on 06.06.2015. The assessee was given to believe that the advance on transfer of immovable property was in respect of capital asset, as in such cases only there is possibility of generation of black money. The assessee had received advance on sale of his stock. He was also guided by the decision of Allahabad High Court in the case of CIT & Anr. v. Kailash Chandra Deepak Kumar (2009) 32 DTR 336 / 317 ITR 351wherein it was held that when the assessee receives advance from his customers for supply of goods in cash exceeding the limits prescribed in section 269SS, penalty under section 271D was held to be not leviable. In view of the above facts, it is clear that penalty under Section 271D has been wrongly and arbitrarily imposed, which may kindly be deleted.” 28 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT 6. The ld. AR of the assessee in addition to the above written submission so filed vehemently argued that the assessee the order passed in the case of the assessee barred by limitation and for that he cited a judicial precedent of the case decided by the co-ordinate bench of Jaipur in the case of Jagdish Chandra Suwalka vs. JCIT in ITA No.376/JP/2022 and submitted that the fact of that case and that of the case of the assessee similar and thereby he submitted that the order passed being barred by limitation the levy of penalty has no force and the order is required to be quashed on that technical reason. So far as the merit of the case sale deed was found in that sale deed first page is related to Millenium Buildhome wherein the assessee is director and the transaction is duly recorded in the cash book of Millenium Buildhome [ page 9 to 86]. As regards the cancellation deed he has submitted the first page wherein it is categorically evident that the transaction is for and on behalf of the company Millenium where he is director and therefore, the contention raised by the ld. AO is against the evidence on record and thereby he contested even on merits and thereby prayed to delete the levy of penalty. 7. The ld DR is heard who relied on the findings of the lower authorities and more particularly advanced the similar contentions as stated in the 29 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT order of the ld. CIT(A). As regards the legal ground ld. DR submitted that the period cited as being barred by limitation was covered by the Covid-19 and therefore, the said ground has no force. As regards the acceptance of the money by company the same is not mentioned in the audit report that the same is accepted in violation of provision of section 296SS of the Act. Based on those arguments he supported the order of the ld. CIT(A) and also filed following written submissions on 30.01.2025 and 02.03.2021 as under:- “Written submission dated 30.01.2025 Subject: Non-Receipt of Documents as Directed by the Hon'ble ITAT in the Case of Ajay Bakliwal AY-2016-17/ITA NO 1278/JPR/2024-Compliance Issue Sir. This is to bring to your kind attention that during the hearing of the case of Ajay Bakliwal, the Hon'ble Bench had directed the Authorized Representative (AR) to submit the following documents by 30/01/2025: 1. Auditor's comments on the cash transaction of ₹25,00,000/-. 2. Declaration of the same cash by M/s Millennium Buildhome in its books and cash book. 3. Copy of the cash book of M/s Millennium Buildhome for the relevant period. 4. 4. Details of repayments made by M/s Millennium Buildhome of the said amount. The AR had relied upon these documents during the hearing but did not produce them before the Hon'ble Bench. Consequently, the Hon'ble Bench directed the Senior Departmental Representative (Sr. DR) to offer comments in the form of a rejoinder once these documents were submitted. However, as of date, the office of the DR has not received any paper book or written submission from the AR. Due to this non-compliance, the directions of 30 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT the Hon'ble Bench cannot be completed, and the Department is unable to offer its rejoinder on the matter. अिनता अिनता अिनता अिनता \u0007रनेश \u0007रनेश \u0007रनेश \u0007रनेश संयु\u000f संयु\u000f संयु\u000f संयु\u000f आयकर आयकर आयकर आयकर आयु\u000f आयु\u000f आयु\u000f आयु\u000f ( ( ( (व व व व. . . .\u0015व \u0015व \u0015व \u0015व. . . .ू ू ू ू.) .) .) .) आयकर आयकर आयकर आयकर अपीलीय अपीलीय अपीलीय अपीलीय अिधकरण अिधकरण अिधकरण अिधकरण- - - -१ १ १ १. . . . जयपुर जयपुर जयपुर जयपुर” Written submission dated 02.03.2021 To, The Addl. Commissioner of Income-tax, Central Range, Udaipur. Sub:- Reference for penalty u/s 271D of the I.T. Act, 1961 for violation of section 269SS in the case of Shri Ajay Bakliwal (PAN-ABZPB7775P) for AY 2016-17- Reg. Sir, Kindly, refer to above cited subject. In connection to above cited subject, it is submitted as per Page No.91 & 92 of Exhibit-22 Sh. Ajay Kumar Bakliwal had made agreement with Sh. Mayank Jain and Sh. Harish Kohli for sale of his six shops situated at ground floor of his multistory Millenium Apartment and received Rs. 25,00,000/- advance in cash on 06.06.2015 which is contrary to the provisions of section 269SS. Scanned copy of relevant pages is reproduced hereunder:- 31 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT 32 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT During the assessment proceeding, the assessee was asked to submit details regarding the above transaction. The assessee has replied that the deal was cancelled and the amount was returned. The assessee has accepted that he has taken cash of Rs. 25,00,000/- from Shri Mayank Jain and Shri Harish Kohli as advance against sale of seven shops at Milenium Apartment Parvatipuram, Kunhadi Kota on 06.06.2.015. The assessee returned the amount in cash on cancellation of deal on 23.02.2016. These facts have been accepted by the assessee. 33 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT Since it is established and accepted by the assessee that transaction in cash above Rs. 20,000/- occurred for sale of immovable property, therefore, provision of section 269SS is applicable in the case of the assessee. In the light of above facts and circumstance of the case, it appears that Shri Ajay Bakliwal has taken cash of Rs.25,00,000/- during AY 2016-17. Section 269SS provides that any No person shall take or accept from any other person (herein referred to as the depositor), any loan or deposit or any specified sum, otherwise than by an account payee cheque of account payee bank draft or use electronic clearing system through a bank account, if- (a) The amount of such loan or deposit or specified sum or the aggregate amount of such loan, deposit and specified sum; or (b) On the date of taking or accepting such loan or deposit or specified sum, any loan or deponit or specified sum taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), the amount or the aggregate amount remaining unpaid; or (c) The amount or the aggregate amount referred to in clause(a) together with the amount or the aggregate referred to in clause (b), is twenty thousand rupees or more, The amount or the aggregate amount referred to in clause(a) together with the amount or the aggregate referred to in clause (b), is twenty thousand rupees or more, Thus it is clear that no person can accept any loan, deposit and specified sum of Rs. 20,000/- or more otherwise than by way of an account payee cheque or an account payee draft. Section 271D of the Income Tax Act, 1961 provides that if a loan, deposit and specified sum is accepted in contravention of the provisions of section 269SS then a penalty equivalent to the amount of such loan, deposit and specified sum will be levied by the competent authority. In present case, assessee has taken cash of Rs. 25,00,000/- and violated the provisions of section 269SS of the L.T. Act, 1961. Hence, assessee is liable for penalty proceedings under section 271D of the LT. Act, 1961. Therefore, a reference is hereby made to the Addl. Commissioner of Income Tax, Central 34 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT Range, Udaipur for further action under section 271D rws 269SS of the 1.T. Act, 1961. Submitted for kind information and further necessary action. Encl: As above Yours faithfully. (Ranjeet Singh) Asstt. Commissioner of Income Tax Central Circle, Kota 8. We have heard the rival contentions and perused the material placed on record. In this appeal the assessee has effectively challenged the order of levy of penalty u/s. 271D of the Act on limitations as well as on the merits of the case. Since the issue of limitations raised by the assessee goes into the route of levy of penalty, we take up the ground no. 1 raised by the assessee. To decide that issue first we refer the provision where the limitation for levy of penalty is prescribed and that is dealt by the provision of section 275 of the Act which reads as under: Bar of limitation for imposing penalties. 275. (1) No order imposing a penalty under this Chapter shall be passed— (a) in a case where the relevant assessment or other order is the subject-matter of an appeal to the 28-29[Joint Commissioner (Appeals) or to the] Commissioner (Appeals) under section 246 or section 246A or an appeal to the Appellate Tribunal under section 253, 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 the order of the 28- 29[Joint Commissioner (Appeals) or the] Commissioner (Appeals) or, as the case 35 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT may be, the Appellate Tribunal is received by the 30[***]Principal Commissioner or Commissioner, whichever period expires later : Provided that in a case where the relevant assessment or other order is the subject-matter of an appeal to the 31[Joint Commissioner (Appeals) or to the] Commissioner (Appeals) under section 246 or section 246A, and 31[the Joint Commissioner (Appeals) or] 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 31[the Joint Commissioner(Appeals) or] the Commissioner (Appeals) is received by the 32[***] 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 263 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, whichever period expires later. As is evident from the copy of the paper book filed wherein at page 87 assessee enclosed a letter dated 02.03.2021 written by the ACIT, Central Circle, Kota to the Additional Commissioner of income Tax, Central Range, Udaipur making a reference for levy of penalty u/s. 271D of the Act in the case of the assessee. Based on that reference the order levying penalty was passed on 22.06.2022 by the Addl. CIT. Whereas the assessment in this case was passed on 28.12.2019. In this case end financial year is March 2020 and six month ends on 30.06.2020. The extension of the issue of notice on 36 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT account of covid-19 was up to 30.06.2020. Therefore, reference made on 02.03.2021 exceeds the permissible time limit and thereby the passing of an order become barred by limitation. As serviced by the assessee in the written submission on that aspect of the matter the decision of our Jurisdictional High Court was relied in the case of JCIT Vs. Jitendra Singh Rathore [2013] 352 ITR 327(Raj). The relevant part of the observation of the High Court reads as under 8. In the present case, the notice for issuance of the penalty proceedings under Section 271D of the Act for the alleged contravention of provisions of Section 269SS was issued to the assessee, of course by the AO, on 25.03.2003. Even if the matter had otherwise been in appeal before the CIT(A) against the original assessment order and the appeal was decided on 13.02.2004, the same was hardly of relevance so far the penalty proceedings under Section 271D were concerned. As held by this Court in Hissaria Bros. (supra), completion of appellate proceedings arising out of assessment proceedings has no relevance over sustaining such penalty proceedings. As held clearly by this Court, in such a matter, clause (c) of Section 275 (1) would be applicable. Section 275(1)(c) could be noticed as under:- \"275. Bar of limitation for imposing penalties. (1) No order imposing a penalty under this Chapter shall be 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, whichever period expires later.\" 9. In the present case, the first show cause notice for initiation of proceedings was issued by the AO on 25.03.2003 and was served on the assessee on 27.03.2003. Obviously, the later period also expired on 30.09.2003 when six months expired from the end of the month in which the action for imposing the 37 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT penalty was initiated. The order as passed by the Joint Commissioner of Income Tax for the penalty under Section 271D on 28.05.2004 was clearly hit by the bar of limitation and has rightly been set aside in the orders impugned. 10. In view of the above, our answer to the formulated question of law is that even when the authority competent to impose penalty under Section 271D was the Joint Commissioner, the period of limitation for the purpose of such penalty proceedings was not to be reckoned form the issue of first show cause by the Joint Commissioner; but the period of limitation was to be reckoned from the date of issue of first show cause for initiation of such penalty proceedings. For the purpose of present case, as observed hereinabove, for the proceedings having been initiated on 25.03.2003, the order passed by the Joint Commissioner under Section 271D on 28.05.2004 was hit by the bar of limitation. The CIT(A) and the Tribunal have, thus, not committed any error in setting aside the order of penalty. 11. Consequently, the appeal fails and is, therefore, dismissed. As is evident that the in this case limitation for issue of notice expires on 30.06.2020 whereas the same was issued on 24.12.2021 and the same being issued after the statutory time line and therefore, respectfully following the observation of our own High Court we direct the ld. AO to delete the penalty. Based on this observation ground no. 1 raised by the assessee is allowed. 9. Ground no. 2 raised by the assessee deals with the levy of penalty on the merits of the case. The brief facts of the merits are that a search & seizure operation under section 132(1) of the Income-tax Act, 1961 was carried out on 07.09.2017 at the various premises of \"Resonance Group, Kota\". In that search action various incriminating documents / loose papers 38 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT were found and seized. Out of them, one 'Ikrarnama' was seized by a search party and inventoried as Exhibhit-22. As per page No 91 & 92 of Exhibit-22 Shri Ajay Kumar Baikliwal has made agreement with Shri Mayank Jain and Shri Harish Kohli for sale of his six shops situated at ground floor or his multistory Millennium Apartment and received Rs. 25,00,000/- advance in cash on 06.06.2015 which is contrary to the provisions of section 269SS. Accordingly, a reference was made by the ACIT Central Circle Kota to Addl./JCIT CIT, Central Range, Udaipur for considering initiating penalty proceedings u/s 271D of the Income Tax Act against the assessee and thereby the penalty of Rs. 25 lac was levied against the assessee. As is evident from the record that the Agreement of sale of shops at Millennium Apartment, Parvati Puram, Kota is between M/s Millennium Build Home Pvt. Limited Kota and Shri Mayank Jain & Shri Harish Kohli. It is submitted that agreement was between M/s Millennium Build Home Pvt. Ltd., and Shri Mayank Jain and Shri Harish Kohli for a total sum of Rs. 45,00,000/- and against the sale consideration a sum of Rs. 25,00,000/- was received in cash as advance on 06.06.2015. Shri Ajay Bakliwal signed that agreement as Director of M/s Millennium Build Home Pvt. Limited. Apparently, the transaction of sale of shops does not belong to Shri Ajay Bakliwal in his individual capacity. He has signed this 39 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT agreement in the representative capacity as Director of M/s Millennium Build Home Pvt Ltd, Kota, This fact is apparent from the 1st para of the agreement. In the above circumstances the transaction of sale of shops and the receipt of Rs. 25,00,000/- as advance against the sales of these shops does not belong to Shri Ajay Bakliwal in his Individual Capacity. The matter relates to M/s Millennium Build Home Pvt. Ltd, Kota. In the circumstances it is clear that the learned AO has not appreciated the fact and thereby even JCIT has not appreciated the fact that even the cancellation deed was also made by the company where the assessee acted as director of the company. While dealing with the penalty proceeding the ld. JCIT has not considered the first page of cancellation agreement and concluded that money was accepted and repaid by the assessee in his individual capacity. During the assessment proceeding the assessee was asked to submit details regarding the above transactions. The assessee has replied that the deal was cancelled, and the amount was returned. The assessee has accepted that he has taken cash of Rs, 25,00,000/- from Shri Mayank Jain and Shri Harish Kohli as advance against sale of 7 shops at Millennium Apartment, Parvati Puram, Kota on 06.06.2015 The assessee returned the amount in cash on cancellation of deal on 23.02.2016. It has also been made available the assessment order 40 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT of M/s Millennium Build Home Pvt. Ltd. who was constructing multi storied building namely Millennium Apartment, Parvati Puram, Kota and many of the flats of Millennium Apartment, Parvati Puram, Kota have been Booked by Shri Ajay Bakliwal being the director of the company. The booking as well as advance amount of these Flats of Millennium Apartment, Parvati Puram, Kota have been considered in the assessment order of M/s Millennium Build Home Pvt. Ltd. At para no 5 appearing on page 2 of the assessment order of M/s millennium Build home Pvt. Ltd for A.Y. 2016- 2017 is relevant in the above regard and the same is quoted below; \"Documents regarding receipt of cash against booking/sale of Flats in M/s Millennium Build Home Private Limited were found and seized. The assessee company was constructing a multi storied building i.e. Millennium Apartment, Parvati Puram, Kota. Many Flats have been booked by Shri Ajay Bakliwal in F.Y. 2014-15 and 2015-16. Few flats have also been booked in previous year\" The above para shows that Millennium Apartment, Parvati Puram, Kota was a Muiti storied building which was constructed and owned by M/s Millennium Build Home Private Limited and Shri Ajay Bakliwal was a director in this company. In the aforesaid circumstances the issue of sale of shops and advance taken by Shri Ajay Bakliwal in his representative capacity as director belongs to M/s Millennium Build Home Private Limited and not to Shri Ajay Bakliwal in his individual capacity Thus, the show cause notice issued by ld. AO under section 274 read with section 271D is 41 ITA No.1278/JP/2024 Ajay Bakliwal vs. ACIT also based on the wrong appreciation of the fact and thus required to be quashed. In the light of that facts ground no. 2 raised by the assessee is allowed. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 11/ 04/2025. Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 11/04/2025 *Ganesh Kumar, Sr. PS vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Ajay Bakliwal, Kota 2. izR;FkhZ@ The Respondent- ACIT, Central Circle, Kota 3. vk;dj vk;qDr@ The ld CIT 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 6. xkMZ QkbZy@ Guard File (ITA No. 1278/JP/2024) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar "
Other Referred Cases
JCIT Vs. Jitendra Singh Rathore, CIT Vs. Hissaria Brothers, Mahesh Wood Products (P) Ltd. vs. ACIT(TDS), Ram Kishan Verma vs. Addl. CIT, Jagdish Chandra Suwalka vs. JCIT, M.D.S. University vs. ACIT(TDS)
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