Shriram Doodh Jillha M.S.D.V. Sangh Ltd., Ahmednagar V. Assistant Commissioner of Income-tax, Ahmednagar

ITA 1187/PUN/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9162 (ITAT-PUNE)
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 12-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK AGGARWAL
• Keywords: Initiation of penalty proceedings; Competent authority
• Section: 143(3); 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 1187 /P U N/201 7 / ASSESSMENT YEAR : 20 1 3 - 1 4 SHRIRAM DOODH JILLHA MADHYAVARTI SAHAKARI DOODH VYAVASAIK SANGH LTD. A/P BABHALESHWAR, TAL. RAHATA, DIST. AHMEDNAGAR 413737 . / APPELLANT PAN: A AAJS0393L VS. THE A SST. COMMISSIONER OF INCOME TAX, AHMEDNAGAR CIRCLE, AHMEDNAGAR . / RESPONDENT . / ITA NO. 1188 /P U N/201 7 / ASSESSMENT YEAR : 20 13 - 14 SHRIRAM DOODH JILLHA MADHYAVARTI SAHAKARI DOODH VYAVASAIK SANGH LTD. A/P BABHA LESHWAR, TAL. RAHATA, DIST. AHMEDNAGAR 413737 . / APPELLANT PAN: AAAJS0393L VS. THE ASST. COMMISSIONER OF INCOME TAX, AHMEDNAGAR CIRCLE, AHMEDNAGAR . / RESPONDENT / APPELLANT BY : SHRI M.K. KULKARNI / RESPONDENT BY : SHRI VIVEK AGGARWAL / DATE OF HEARING : 24 .0 7 . 2017 / DATE OF PRONOUNCEMENT: 26 . 0 7 .201 7 ITA NO S . 1 187 & 1188 /P U N/20 1 7 2 / ORDER PER SUSHMA CHOWLA, J M : BOTH T H E APPEAL S FILED BY THE ASSESSEE ARE AGAINST S EPARATE ORDER S OF CIT (A) - 2 , PUNE , BOTH DATED 15 .03.2017 RELATING TO ASSESSMENT YEAR 20 1 3 - 1 4 AGAINST PENALTY LEVIED UNDER SECTIONS 271E AND 271D OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) , RESPECTIVELY . 2 . BOTH THE APPEALS OF ASSESSEE WERE HEARD TOGE THER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 3. THE ASSESSEE IN ITA NO. 1187/PUN/2017 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE PENALTY LEVIED BY JT. CIT OF RS.71,00,000/ - U/S 271 - E OF THE ACT WITHOUT PROPERLY APPRECIATING THE SUBMISSIONS MADE BY THE ASSESSEE. THE ORDER OF THE LD. CIT(A) BE SET ASIDE CANCELLING THE PENALTY LEVIED. 2) ON THE FACTS A ND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE CASE OF THE ASSESSEE IS FULLY COVERED BY THE PROVISIONS OF S.273B AND BY THE JUDICIAL PRECEDENT OF THE HON'BLE SUPREME COURT IN AB SHANTHIS CASE. THERE IS NO EVIDENCE POINTED OUT BY THE AUTHORITIES BELOW REGARDING EVASION OF TAXES BY RETURNING THE LOANS IN CASH. THE ORDER OF THE LD. CIT(A) BE SET ASIDE. 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) OUGHT TO HAVE FOLLOWED THE JURISDICTIONAL TRIBUNALS JUDGMENT RELIED UPON BEFORE HIM WHICH DECISION IN TURN FOLLOWED THE CBDT CIRCULAR ON THE ISSUE. THE LD. CIT(A) DISTINGUISHED THE SAID JUDGMENT BY OBSERVING THAT NOWHERE IN S.271E IT IS MENTIONED THAT THE REFERENCE BY THE A.O. TO THE JT. CIT IS TO BE MADE ONLY IN THE COURSE O F ASSESSMENT PROCEEDINGS. THE HONBLE TRIBUNAL RELIED UPON THE SAID CIRCULAR TO DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. THE BOARD CIRCULAR IS BINDING ON ALL THE AUTHORITIES IN VIEW OF HON'BLE SUPREME COURT IN UNION OF INDIA & OTHERS V. KAMLAKSHI FINA NCE CORPORATION 1992 SUPP (1) SUPREME COURT CASES 648. THE ORDER OF THE LD. CIT(A) BE SET ASIDE. 4) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS OBLIGED TO CONSIDER THE INTENTION OF THE LEGISLATURE ENACTING THE PROVISIO NS OF S.269SS/269T WHICH IS REFLECTED IN THE HEAD - LINE ITA NO S . 1 187 & 1188 /P U N/20 1 7 3 REQUIREMENT AS TO MODE OF ACCEPTANCE/REPAYMENTS OF LOANS/DEPOSITS TO COUNTERACT EVASION OF TAX. THIS IN ITSELF CLARIFIED THAT THE PROVISIONS ARE ATTRACTED WHEN EVASION OF TAX IS NOTICED. IN THE ABS ENCE OF ANY FINDING OF EVASION OF TAX THE PROVISIONS ARE NOT ATTRACTED. THIS VIEW WAS PLEADED BEFORE LD. CIT(A) BUT WAS NOT ACCEPTABLE TO HIM. THE DECISION OF THE LD. CIT(A) IS CONTRARY TO LAW. THE ORDER OF THE LD. CIT(A) BE SET ASIDE CANCELLING THE PE NALTY LEVIED. 4. THE ASSESSEE IN ITA NO.1188/PUN/2017 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - 1) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS NOT JUSTIFIED IN CONFIRMING THE PENALTY LEVIED BY JT. CIT OF RS. 26 ,00,00 0/ - U/S 271 D OF THE ACT WITHOUT PROPERLY APPRECIATING THE SUBMISSIONS MADE BY THE ASSESSEE. THE ORDER OF THE LD. CIT(A) BE SET ASIDE CANCELLING THE PENALTY LEVIED. 2) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE CASE OF THE ASSESSEE I S FULLY COVERED BY THE PROVISIONS OF S.273B AND BY THE JUDICIAL PRECEDENT OF THE HON'BLE SUPREME COURT IN AB SHANTHIS CASE. THERE IS NO EVIDENCE POINTED OUT BY THE AUTHORITIES BELOW REGARDING EVASION OF TAXES BY RETURNING THE LOANS IN CASH. THE ORDER OF THE LD. CIT(A) BE SET ASIDE. 3) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) OUGHT TO HAVE FOLLOWED THE JURISDICTIONAL TRIBUNALS JUDGMENT RELIED UPON BEFORE HIM WHICH DECISION IN TURN FOLLOWED THE CBDT CIRCULAR ON THE ISSU E. THE LD. CIT(A) DISTINGUISHED THE SAID JUDGMENT BY OBSERVING THAT NOWHERE IN S.271 D IT IS MENTIONED THAT THE REFERENCE BY THE A.O. TO THE JT. CIT IS TO BE MADE ONLY IN THE COURSE OF ASSESSMENT PROCEEDINGS. THE HONBLE TRIBUNAL RELIED UPON THE SAID CIRC ULAR TO DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. THE BOARD CIRCULAR IS BINDING ON ALL THE AUTHORITIES IN VIEW OF HON'BLE SUPREME COURT IN UNION OF INDIA & OTHERS V. KAMLAKSHI FINANCE CORPORATION 1992 SUPP (1) SUPREME COURT CASES 648. THE ORDER OF THE LD. CIT(A) BE SET ASIDE. 4) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LD. CIT(A) WAS OBLIGED TO CONSIDER THE INTENTION OF THE LEGISLATURE ENACTING THE PROVISIONS OF S.269SS/269T WHICH IS REFLECTED IN THE HEAD - LINE REQUIREMENT AS TO MODE OF ACCEPTANCE/REPAYMENTS OF LOANS/DEPOSITS TO COUNTERACT EVASION OF TAX. THIS IN ITSELF CLARIFIED THAT THE PROVISIONS ARE ATTRACTED WHEN EVASION OF TAX IS NOTICED. IN THE ABSENCE OF ANY FINDING OF EVASION OF TAX THE PROVISIONS ARE NOT ATTRACTED. THIS VIEW WAS PLEADED BEFORE LD. CIT(A) BUT WAS NOT ACCEPTABLE TO HIM. THE DECISION OF THE LD. CIT(A) IS CONTRARY TO LAW. THE ORDER OF THE LD. CIT(A) BE SET ASIDE CANCELLING THE PENALTY LEVIED. 5. THE ONLY ISSUE RAISED IN BOTH THE APPEALS IS AGAINST LE VY OF PENALTY UNDER SECTIONS 271D AND 271E OF THE ACT. ITA NO S . 1 187 & 1188 /P U N/20 1 7 4 6 . THE ASSESSEE HAS CHALLENGED THE SAID LEVY OF PENALTY AT THE JURISDICTIONAL LEVEL ITSELF. THE ASSESSEE IS AGGRIEVED BY INITIATION OF PROCEEDINGS BY THE ASSESSING OFFICER, WHEREIN THE SAID PENALTY H AD TO BE LEVIED BY THE JOINT COMMISSIONER OF INCOME TAX ON RECEIPT OF INFORMATION FROM THE ASSESSING OFFICER. THE CASE OF ASSESSEE BEFORE US IS THAT THE SAID INFORMATION HAD TO BE PASSED ON BY THE ASSESSING OFFICER DURING THE COURSE OF PENDENCY OF ASSESSM ENT PROCEEDINGS AND NOT AFTER ITS COMPLETION AND HENCE, THE SAME IS INVALID. IN THIS REGARD, RELIANCE WAS PLACED ON THE RATIO LAID DOWN BY THE PUNE BENCH OF TRIBUNAL IN SHRI DEVIDAS RAMCHANDRA KULKARNI VS. JCIT IN ITA NO.444/PN/2013, RELATING TO ASSESSMEN T YEAR 2009 - 10, ORDER DATED 29.07.2016. 7 . BRIEFLY, IN THE FACTS OF THE CASE, FOR THE YEAR UNDER CONSIDERATION, THE ASSESSMENT PROCEEDINGS WERE INITIATED AGAINST THE ASSESSEE. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTED BY THE ASSESSING OFF ICER THAT THE ASSESSEE HAD RECEIVED DEPOSITS IN CASH AND HAD ALSO REPAID THE SAME OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR BANK DRAFT EXCEEDING RS.20,000/ - , AGGREGATING RS.71 LAKHS. SIMILARLY, THE ASSESSEE HAD ACCEPTED DEPOSITS IN CASH EXCEEDING RS.20 ,000/ - OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR BANK DRAFT, AGGREGATING TO RS.26 LAKHS. THE ASSESSMENT PROCEEDINGS WERE COMPLETED BY THE ASSESSING OFFICER VIDE ORDER PASSED UNDER SECTION 143(3) OF THE ACT, DATED 02.02.2016. THE ASSESSING OFFICER PASS ED ON THE INFORMATION TO THE OFFICE OF JOINT COMMISSIONER OF INCOME TAX, AHMEDNAGAR RANGE, VIDE LETTER DATED 17.02.2016 I.E. AFTER THE DATE OF COMPLETION OF ASSESSMENT . T HE JT. COMMISSIONER HELD THE ASSESSEE TO HAVE VIOLATED THE PROVISIONS OF SECTION 269S S OF THE ACT AND LEVIED PENALTY UNDER SECTION 271D OF THE ACT AT RS.26 LAKHS. FURTHER, THE JOINT COMMISSIONER OF ITA NO S . 1 187 & 1188 /P U N/20 1 7 5 INCOME TAX ALSO HELD THE ASSESSEE TO HAVE VIOLATED THE PROVISIONS OF SECTION 269T OF THE ACT AND LEVIED PENALTY UNDER SECTION 271E OF THE ACT AT RS.71 LAKHS. 8 . THE CIT(A) HAS UPHELD THE LEVY OF PENALTY UNDER SECTIONS 271D AND 271E OF THE ACT. 9 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE WHICH ARISES IN THE PRESENT APPEAL IS AGAINST LEVY OF PENALTY UNDER SECTION 271D OF THE ACT AT RS.26 LAKHS. THE SAID PENALTY HAS BEEN LEVIED FOR VIOLATION OF PROVISIONS OF SECTION 269SS OF THE ACT ON THE PREMISE THAT THE ASSESSEE HAD ACCEPTED THE DEPOSITS OTHERWISE THAN BY CROSSED CHEQUE OR BANK DRAFT EXCEEDING RS.20,000/ - , DURIN G THE YEAR. FURTHER, PENALTY UNDER SECTION 271E OF THE ACT HAS BEEN LEVIED FOR VIOLATING THE PR OVISIONS OF SECTION 269T OF THE ACT, WHEREIN THE ASSESSEE WAS FOUND TO HAVE REPAID THE DEPOSITS IN CASH I.E. OTHERWISE THAN BY CROSSED CHEQUE OR BANK DRAFT EXCE EDING RS.20,000/ - . THE SAID VIOLATION OF THE PROVISIONS OF SECTIONS 269SS AND 269T OF THE ACT WERE NOTED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS . AS PER PROVISIONS OF THE ACT, PENALTY UNDER SECTIONS 271D AND 271E OF THE ACT I S TO BE LEVIED BY THE JT. COMMISSIONER, RANGE HEAD, ONCE THE INFORMATION IN THIS REGARD IS GIVEN BY THE ASSESSING OFFICER CONCERNED. THE ASSESSING OFFICER OTHER THAN THE JT. COMMISSIONER IS NOT EMPOWERED TO LEVY THE SAID PENALTY. HOWEVER, THE ACT PROVIDE S THAT THE INFORMATION FOR VIOLATION OF PROVISIONS OF SECTIONS 269SS AND 269T OF THE ACT IS TO BE PROVIDED BY THE ASSESSING OFFICER TO THE JT. COMMISSIONER, RANGE HEAD, BEFORE COMPLETION OF ASSESSMENT PROCEEDINGS. IN THE FACTS OF THE PRESENT CASE, THE ASS ESSMENT PROCEEDINGS WERE COMPLETED ON 02.02.2016 VIDE ORDER ITA NO S . 1 187 & 1188 /P U N/20 1 7 6 PASSED UNDER SECTION 143(3) OF THE ACT, THEREFORE, THE INFORMATION WAS PASSED TO THE OFFICE OF THE JT. COMMISSIONER, RANGE HEAD , VIDE LETTER DATED 17.02.2016. THE SUBMISSIONS OF THE ASSESSEE IN T HIS REGARD ARE THAT ONCE THE ASSESSMENT ORDER HAS BEEN PASSED, THEN THE ASSESSING OFFICER BECOMES EX - OFFICIO TO THE SAID ASSESSMENT PROCEEDINGS AND HENCE, COULD NOT PASS ON INFORMATION TO THE JT. COMMISSIONER, RANGE HEAD ON 17.02.2016. IN THIS REGARD, HE HAS PLACED RELIANCE ON THE RATIO LAID DOWN BY THE PUNE BENCH OF TRIBUNAL IN SHRI DEVIDAS RAMCHANDRA KULKARNI VS. JCIT (SUPRA) AND ALSO PLACED RELIANCE ON CBDT CIRCULAR DATED 26.04.2016. 10. WE FIND THAT SIMILAR ISSUE WAS ADJUDICATED BY THE TRIBUNAL IN SHR I DEVIDAS RAMCHANDRA KULKARNI VS. JCIT (SUPRA) AND IT WAS OBSERVED AS UNDER: - 9. ON PERUSAL OF RECORD AND AFTER HEARING BOTH THE LEARNED AUTHORIZED REPRESENTATIVES, THE ISSUE WHICH ARISES IN THE PRESENT APPEAL IS AGAINST LEVY OF PENALTY UNDER SECTION 271D OF THE ACT. THE ASSESSING OFFICER, WARD 1(3), NASHIK HAD COMPLETED THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 28.12.2011. THE PERUSAL OF ASSESSMENT ORDER DOES NOT REFLECT ANY OBSERVATIONS ABOUT THE RECEIPT OF ANY CASH LOAN BY THE AS SESSEE. THEREAFTER, THE ASSESSING OFFICER, NASHIK HAD MADE A REFERENCE UNDER SECTION 272A(3)(C) OF THE ACT TO THE JCIT, RANGE - 1, NASHIK FOR INITIATING PENALTY PROCEEDINGS UNDER SECTION 271D OF THE ACT ON THE PREMISE THAT DURING THE YEAR, THE ASSESSEE HAD ACCEPTED THE LOAN / DEPOSIT IN CASH FROM HIS WIFE SMT. C.D. KULKARNI OF RS.4,18,000/ - . THE PERUSAL OF ORDER PASSED UNDER SECTION 271D OF THE ACT REFLECTS THAT THE ASSESSING OFFICER, WARD 1(3), NASHIK HAD STATED THAT THE SAID INFORMATION CAME TO HIS KNOWLE DGE DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 2009 - 10. SINCE THE ASSESSEE HAD ACCEPTED THE 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 ASSE SSEE 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 COMP LETED 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 DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE OBJECTED TO THE SAID RELIANCE OF ASSESSEE ON THE PREMISE THAT THE SAID CIRCULAR ISSUED BY CBDT WAS DATED 26.04.2 016 AND WAS NOT AVAILABLE AT THE RELEVANT TIME. ITA NO S . 1 187 & 1188 /P U N/20 1 7 7 10. UNDER THE PROVISIONS OF SECTION 272A(3)(C) OF THE ACT, IT IS PROVIDED THAT ANY PENALTY IMPOSABLE UNDER SUB - SECTION (1) OR (2) OF THE SAID SECTION SHALL BE IMPOSED BY THE JOINT DIRECTOR OR JOINT COMMISS IONER IN RESPECT OF CASES OTHER THAN THE CASES COVERED IN CLAUSES (A) & (B) OF SUB - SECTION (3). THE ISSUE WHICH ARISES BEFORE THE TRIBUNAL IS THAT WHERE THE ASSESSMENTS HAVE BEEN COMPLETED BY A PERSON OTHER THAN JOINT COMMISSIONER, THEN AT WHAT JUNCTURE, THE ASSESSING OFFICER MAKING A REFERENCE TO THE JCIT, FOR INITIATING PENALTY PROCEEDINGS UNDER SECTION 271D OF THE ACT SHOULD SEND THE INTIMATION IN THIS REGARD. THE INFORMATION THAT THE ASSESSEE HAD ACCEPTED THE CASH LOAN FROM HIS WIFE HAD ADMITTEDLY COM E TO THE KNOWLEDGE OF ASSESSING OFFICER, WARD 1(3), NASHIK DURING THE COURSE OF ASSESSMENT PROCEEDINGS ITSELF, WHICH IS CLEARLY MENTIONED IN THE ORDER PASSED UNDER SECTION 271D OF THE ACT. ONCE SUCH INFORMATION HAD COME TO HIS KNOWLEDGE, THEN IT WAS INCUM BENT UPON THE ASSESSING OFFICER TO HAVE FORWARDED THE SAID INFORMATION TO THE JCIT I.E. RANGE HEAD BEFORE COMPLETION OF ASSESSMENT, SINCE AFTER THE COMPLETION OF ANY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER BECOMES NON GRATA TO SAID PROCEEDINGS. THIS POSITION AND STATUS OF THE ASSESSING OFFICER TO MAKE A REFERENCE TO 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 A SSESSMENT 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 JO INT COMMISSIONER CAN INITIATE PROCEEDINGS TO LEVY PENALTY AND SUCH INITIATION OF PENALTY PROCEEDINGS COULD NOT BE DONE BY THE ASSESSING OFFICER. THE CBDT HAS FURTHER ACKNOWLEDGED THAT STATEMENT IN THE ASSESSMENT ORDER THAT THE PROCEEDINGS UNDER SECTION 27 1D AND 271E OF THE ACT ARE INITIATED IS CONSEQUENTIAL SINCE THE INITIATION IS BY AN AUTHORITY WHO IS INCOMPETENT. THE PROCEEDINGS IN THIS REGARD CAN BE INITIATED ONLY BY ISSUANCE OF NOTICE BY THE JCIT AND THE SAME HAS TO BE INITIATED IN THE COURSE OF ASSE SSMENT PROCEEDINGS OR ANY OTHER PROCEEDINGS UNDER THE ACT. IN THE ABOVE SAID CIRCUMSTANCES, PENALTY ORDER PASSED IN THE PRESENT CASE BY WAY OF REFERENCE MADE BY THE ASSESSING OFFICER TO JCIT VIDE LETTER DATED 03.05.2012 IS BEYOND LIMITS PRESCRIBED, WHERE THE ASSESSMENT ORDER WAS COMPLETED ON 28.12.2011. HENCE ON THIS COUNT, PENALTY ORDER MERITS TO BE DISMISSED AND THE SAME IS SO DISMISSED. 11. THE TRIBUNAL WHILE DECIDING THE ISSUE HAS REFERRED TO THE CBDT CIRCULAR AND HAVE HELD THAT PENALTY PROCEEDINGS ARE TO BE INITIATED BY ISSUANCE OF NOTICE BY THE JCIT AND THE SAME HAD TO BE INITIATED IN THE COURSE OF ASSESSMENT PROCEEDINGS OR ANY OTHER PROCEEDINGS UNDER THE ACT. APPLYING THE SAID RATIO TO THE FACTS OF THE PRESENT CASE, WHEREIN THE ASSESSMENT ORDER U NDER SECTION 143(3) OF THE ACT WAS COMPLETED ON 02.02.2016 AND THEREAFTER, THE INFORMATION WAS PASSED ON TO THE JCIT, RANGE HEAD, BY THE ASSESSING OFFICER VIDE LETTER DATED 17.02.2016 AND THE PENALTY PROCEEDINGS WERE INITIATED ITA NO S . 1 187 & 1188 /P U N/20 1 7 8 THEREAFTER, THEN THE SAID PEN ALTY PROCEEDINGS ARE INITIATED BEYOND THE LIMIT PRESCRIBED UNDER THE ACT AND CONSEQUENTLY, THE PENALTY ORDER PA SSED IN THE CASE CANNOT STAND. ACCORDINGLY, WE HOLD THAT PENALTY ORDER PASSED UNDER SECTION 271D AND 271E OF THE ACT IS BEYOND THE TIME LIMIT PR ESCRIBED UNDER THE ACT AND THE SAME MERITS TO BE DISMISSED. ACCORDINGLY, WE HOLD SO. THUS, THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWED. 1 2 . IN THE RESULT, BOTH THE APPEALS OF ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON THIS 26 TH DAY OF JU LY , 201 7 . SD/ - SD/ - (ANIL CHATURVEDI ) (SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 26 TH JU LY , 201 7 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - 2 , PUNE ; 4. / THE PR. CIT - I, PUNE ; 5. , , / DR B , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITA T, PUNE