Shri Kalpesh K.Kinariwala, Surat V. The Addl.CIT.,Range-3, Surat

ITA 316/AHD/2013

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9410 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-03-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 03-12-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 04-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: VILAS V SHINDE
• Assessee Lawyers: M K PATEL
• Keywords: Gift; Period of limitation; Reasonable cause; Time period of passing order
• Section: 143(3); 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD SMC BENCH AHMEDABAD BEFORE S/SHRI RAJPAL YADAV, JM, & MANISH BORAD, AM. ITA NO.316/AHD/2013 ASST. YEAR: 2008-09 KALPESH K. KINARIWALA, 85, GIDC,KHATODARA, B/H SUB-JAIL, SURAT. VS. ADDL. CIT-RANGE-3, SURAT APPELLANT RESPONDENT PAN AOKPK3851P APPELLANT BY SHRI M. K. PATEL, AR RESPONDENT BY SHRI VILAS V. SHINDE, DR DATE OF HEARING: 3/12/2015 DATE OF PRONOUNCEMENT: 2/03/2016 O R D E R PER MANISH BORAD, ACCOUNTANT MEMBER . THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF LD. CIT(A)-IV, SURAT DATED 7.11.2012. PENALTY ORDER U/S 271D OF THE IT ACT, 1961 (IN SHORT THE ACT) FOR ASST. YEAR 2008-09 WAS FRAMED BY ADDL. CIT, RANGE-3, SURAT ON 25.8.2011. GROUNDS OF APPEAL [1] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AS WELL AS LAW ON THE SUBJECT, THE PENALTY ORDER PASSED BY THE LEARNED ADDL. CIT RANGE - 3, SURAT U/S.271D LEVYING PENALTY TO THE TUNE OF RS.76,000/- IS BARRED BY LIMITATION AND HEN CE BAD-IN LAW AND WITHOUT JURISDICTION. [2] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AS WELL AS LAW ON THE SUBJECT, THE DEMAND NOTICE ISSUED U/S .156 ON ITA NO. 316/AHD/2013 ASST. YEAR 2008-09 2 PASSING THE PENALTY ORDER OUGHT TO HAVE BEEN SIGNED BY THE ADDL. CIT RANGE -3 SURAT. [3] ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AS WELL AS LAW ON THE SUBJECT, THE A.O. OUGHT TO HAVE CONSI DERED THAT THE LOAN TRANSACTION IN CASH IS WITH SISTER CONCERN S (FAMILY MEMBERS) ONLY. [4] ON THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LEARNED CIT(A)-IV, SURAT ERRED IN CONFIRMING THE PENALTY WI THOUT APPRECIATING THE FACTS OF THE CASE AS WELL AS WITHO UT CONSIDERING THE JUDGMENT OF THE HON'BLE HIGH COURT OF GUJARAT IN THE CASE OF CIT VS SHREE AMBICA FLOUR MILLS CORP ORATION REPORTED IN (2008) 6 DTR (GUJ) 169 FAVOURABLY. YOUR APPELLANT THEREFORE PRAYS THAT LOOKING TO THE FACTS AND CIRCUMSTANCES OF THE CASE, THE PENALTY LEVIED BY TH E LEARNED ASSESSING OFFICER AND CONFIRMED BY THE CIT(A)-IV, S URAT TO THE TUNE OF RS.76,000/- MAY PLEASE BE DELETED. YOUR APPELLANT FURTHER RESERVES HIS RIGHT TO ADD, A LTER OR TO AMEND ANY OF THE AFORESAID GROUNDS AT THE TIME OF H EARING OF AN APPEAL. 2. BRIEFLY STATED FACTS ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND HE HAS FILED HIS RETURN OF INCOME FOR ASST. YEAR 2008- 09 ON 5.1.2009 DECLARING TOTAL INCOME AT RS.1,24,460/-. THE CASE W AS SELECTED FOR SCRUTINY ASSESSMENT THROUGH CASS AND NOTICE U/S 143 (2) OF THE ACT WAS ISSUED ON 28.8.2009. DURING THE ASSESSMENT PROC EEDINGS IT WAS OBSERVED BY THE ASSESSING OFFICER FROM THE DETAILS SUBMITTED BY THE ASSESSEE THAT CASH LOAN OF RS.19,000/- EACH ON 11.4 .2007, 26.4.2007, 14.5.2007 AND 25.5.2007 WERE TAKEN FROM M/S JAY MAHALAXMI TEXTILES. IN TOTAL ASSESSEE ACCEPTED CASH LOAN OF RS.76,000/- FROM M/S JAY MAHALAXMI TEXTILES. INCOME OF THE ASSESSEE WAS ASSESSED AT THE RETURNED INCOME. HOWEV ER, PENALTY U/S 271D OF THE ACT WAS INITIATED FOR THE CONTRAVEN TION OF PROVISIONS OF SECTION 269SS OF THE ACT BY THE ASSESSEE BY WAY OF ACCEPTING LOAN OF EXCEEDING RS.20,000/- DURING THE YEAR. ITA NO. 316/AHD/2013 ASST. YEAR 2008-09 3 3. AGGRIEVED, ASSESSEE WENT IN APPEAL BEFORE LD. CI T(A). HOWEVER, LD. CIT(A) CONFIRMED THE PENALTY IMPOSED U /S 271D OF THE ACT BY OBSERVING AS UNDER :- 4. I HAVE GONE THROUGH THE PENALTY ORDER AND THE SU BMISSIONS OF THE APPELLANT. IT IS SEEN THAT THE PENALTY PROCEEDINGS U/S. 271D WAS INI TIATED BY THE ADDL. CIT, RANGE-3 ON 26.04.2011. THE PENALTY ORDER U/S. 271D OF THE A CT WAS PASSED ON 25.08.2011. THE -APPELLANT'S CONTENTION THAT PENALTY U/S. 271D WAS INITIATED ON 30.11.2010 AND THE ORDER WAS PASSED ON 25.08.2011 AND THUS THE PENALTY ORDER WAS BARRED BY LIMITATION IS INCORRECT. THE IT AT, CHANDIGARH, SPECIAL BENCH IN THE CASE OF DIWANCHAND AMRUTLAL VS. DCIT, HISSAR RANGE (2006) 98 ITD 200 (CHD) (SB) /[2005] 98 TTJ 947 (CHD) (SB) HAS HELD THAT IN THE CASE OF PENALTY U/S. 271D PERIOD OF LIMITATION FOR PURPOSE OF SEC. 275 IS TO BE RECKONED FROM THE DATE WHEN PENAL TY PROCEEDINGS ARE INITIATED BY THE ADDL. CIT AND NOT FROM THE DATE ON WHICH THE ASSESS MENT PROCEEDINGS HAVE BEEN COMPLETED. ACCORDINGLY RELYING ON THE RULING GIVEN IN THE ABOVE CASE, IT IS HELD THAT THE ORDER PASSED BY THE ADDL. CIT, RANGE-3 ON 25.08 .2011 WAS PASSED WELL WITHIN TIME AS PER THE PROVISIONS OF SECTION 275(L)(C) OF THE IT ACT AND IS IN ORDER. THE PENALTY ORDER U/S 271 D HAS BEEN SIGNED BY THE ADDL CIT, RANGE -3 SURAT WHILE THE DEMAND NOTICE AND CHALLAN HAVE BEEN RIGHTLY SIGNED BY THE ITO WARD 3(1), SURAT AS THE JURISDICTION OVER THE APPELLANT VESTS WITH THE LATTER. ACCORDINGLY THE FIRST TWO GROUNDS OF APPEAL ARE DISMISSED. 4.2 AS REGARDS THE THIRD GROUND OF APPEAL PERTAININ G TO LOAN ACCEPTED FROM M/S. JAY MAHALAXMI TEXTILES ON VARIOUS DATES AMOUNTING TO ?7 6,000/-IN CASH IN CONTRAVENTION OF THE PROVISIONS OF SEC. 269SS OF THE ACT ARE CONC ERNED THE APPELLANT SUBMITTED THAT THE APPELLANT HAD ENTERED INTO LOAN TRANSACTIONS WI TH SISTER CONCERNS ONLY. THE TRANSACTIONS CARRIED OUT WITH SISTER CONCERNS THROU GH IN CASH ARE GENUINE, BONAFIDE AND WITHOUT ANY MALAFIDE INTENTION. THE APPELLANT RELIE D THE GUJARAT HIGH COURT'S DECISION IN THE CASE OF CIT V/S. SHREE AMBICA FLOUR MILLS CO RPORATION, 2008 6 DTR (GUJ.) 169. 4.3 I HAVE GONE THROUGH THE PENALTY ORDER, SUBMISSI ONS OF THE APPELLANT AND THE JUDICIAL DECISIONS RELIED UPON BY THE APPELLANT. TH E FACT OF THE CASE CITED BY THE APPELLANT IS VERY DIFFERENT FROM THE FACTS OF HIS O WN CASE. IN THE CASE CITED BY THE APPELLANT THERE WERE BUSINESS AS WELL AS GIFT TRANS ACTIONS BETWEEN THE APPELLANT AND HIS SISTER CONCERNS AND THERE WAS A REASONABLE GROU ND FOR CARRYING OUT THE TRANSACTION IN CASH. HOWEVER, IN THE CASE OF THE APPELLANT THER E ARE LOAN TRANSACTIONS IN CASH ON VARIOUS DATES. IN FACT ON EACH DATE THE CASH AMOUNT HAS BEEN KEPT AT A UNIFORM FIGURE OF RS.19,000/- WHILE THE TRANSACTIONS HAVE TAKEN PL ACE ON DIFFERENT DATES. IN OTHER WORDS THE APPELLANT HAS ACCEPTED LOAN IN CASH OF RS .19,000/- EACH ON 11.04.2007, ITA NO. 316/AHD/2013 ASST. YEAR 2008-09 4 26.04.2007, 14.05.2007, 25.05.2007 FROM M/S. JAY MA HALAXMI TEXTILES. IT IS STRANGE TO NOTICE THAT ON EACH DATE THE LOAN TRANSACTION IN CASH IS ?19,000/-, I.E. THE APPELLANT HAS DELIBERATELY KEPT IT BELOW RS.20,000/-. 4.4 SEC.269SS OF THE IT ACT CLEARLY STIPULATES THAT NO PERSON SHALL TAKE OR ACCEPT ANY LOAN OR DEPOSIT OTHERWISE THAN BY AN A/C PAYEE CHEQ UE OR A/C PAYEE BANK DRAFT. IN THE PROVISOS TO SEC. 269SS THE EXHAUSTIVE LIST OF EXCEP TIONS OR THE LIST OF PERSONS WITH WHOM TRANSACTIONS IN CASH ABOVE THE SPECIFIED AMOUN T DOES NOT ATTRACT PENALTY UNDER THE ACT IS CLEARLY SPECIFIED. AS THE LOAN OR DEPOSI T TRANSACTIONS IN CASH AGGREGATING TO MORE THAN RS.20,000/- IN THE FY BETWEEN SISTER CONC ERNS IS NOT INCLUDED IN THAT LIST OF EXCEPTIONS IT IS AMPLY CLEAR THAT LOAN TRANSACTIONS BETWEEN SISTER CONCERNS ATTRACT THE PROVISIONS OF SECTION 269 SS OF THE IT ACT. AS THE APPELLANT HAS ACCEPTED LOANS EXCEEDING RS.20,000/- IN CASH IN CONTRAVENTION OF S EC. 269SS OF THE IT ACT, THE ADDL. CIT, RANGE-3 HAS CORRECTLY IMPOSED A PENALTY OF RS. 76,000/- U/S. 27ID OF THE IT ACT. THE PENALTY ORDER IS THEREFORE CONFIRMED AND THIS G ROUND OF APPEAL IS DISMISSED. 5. IN THE RESULT, THE APPEAL IS DISMISSED. 4. AGGRIEVED, ASSESSEE IS NOW IN APPEAL BEFORE THE TRIBUNAL. 5. IN THE FIRST FOLD OF HIS CONTENTIONS LD. AR SUBM ITTED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF MANUFACTURIN G OF GREY DUPATTAS UNDER THE NAME AND STYLE OF M/S JAY AMBE T EXTILES AND THE CASH LOAN WAS TAKEN FROM SISTER CONCERN M/S JAY MAH ALAXMI TEXTILES WHOSE PROPRIETOR IS ASSESSEES BROTHER. THIS TRANSA CTION WAS REQUIRED TO BE MADE AS ONE OF THE PURCHASE PARTY OF THE ASSE SSEE I.E. DORIWALA DYED YARNS INSISTED FOR THE CASH PAYMENT I N RESPECT OF THE PURCHASE MADE. HOWEVER, DUE TO SHORTAGE OF CASH IN THE HAND OF ASSESSEE, HE HAD TO BORROW FROM HIS SISTER CONCERN VIZ. JITESH R. KINARIWALA FOR MAKING PAYMENT TO THE PURCHASER. THE TRANSACTIONS CARRIED OUT BETWEEN THE SISTER CONCERNS IN CASH ARE GENUINE, BONA FIDE AND WITHOUT ANY MALA FIDE INTENTION. FURTHER T HE SISTER CONCERN IS ALSO ASSESSED TO TAX IN THE SAME WARD WITH THE SAME ASSESSING OFFICER AND DURING THE RELEVANT YEAR THE THEN ASSES SING OFFICER, ITA NO. 316/AHD/2013 ASST. YEAR 2008-09 5 FRAMED THE SCRUTINY ASSESSMENT IN BOTH THE CASES AN D ACCEPTED THE RETURNED INCOME FILED BY THEM. 6. AS REGARDS SECOND FOLD OF CONTENTIONS OF LD. AR, HE SUBMITTED THAT THE THEN LEARNED A.O. VIDE PARA 4 OF HIS ASSES SMENT ORDER DATED 30-11-2010 INITIATED THE PENALTY PROCEEDINGS U/S.27 LD OF THE I.T.ACT BY ISSUING SEPARATE PENALTY NOTICE U/S.274 R.W.S. 2 71 OF THE ACT DATED 30-11-2010 VIDE PENALTY REG.NO.5/83/10-11. THE COPY OF ASSESSMENT ORDER ALONG WITH PENALTY NOTICE ISSUED BY THE LEARN ED A.O. IS SUBMITTED ALONG WITH APPEAL MEMO IN FORM NO.35. BEFORE COMING TO THE ISSUE, IT IS RELEVANT TO GO TH ROUGH THE PROVISIONS OF SECTION 275 OF THE I.T. ACT. THE RELE VANT PROVISIONS OF SECTION 275(1)(C) IS REPRODUCED HEREWITH FOR BETTER UNDERSTANDING:- NO ORDER IMPOSING A PENALTY UNDER THIS CHAPTER SHALL BE PASSED- (C) IN ANY OTHER CASE, AFTER THE EXPIRY OF THE FINANCIAL YEAR IN WHI CH THE PROCEEDINGS, IN THE COURSE OF WHICH ACTION FOR THE IMPOSITION OF PENALTY HAS BEEN INITIATED/ ARE COMPLETED, OR SIX M ONTH FROM THE END OF THE MONTH IN WHICH ACTION FOR IMPOSITION OF PENA LTY IS INITIATED WHICHEVER PERIOD EXPIRES LATER. IN THIS CASE, THE ORIGINAL ASSESSMENT ORDER WAS FRA MED BY THE THEN A.O. ON 30-11-2010 FOR THE A.Y.2008-09 WHEREIN HE ALSO INITIATED THE PENALTY PROCEEDINGS U/S.271D BY ISSUI NG SEPARATE NOTICE U/S.274 R.W.S. 271 OF THE ACT DATED 30-11-2010. ON GOING THROUGH THE ITA NO. 316/AHD/2013 ASST. YEAR 2008-09 6 RELEVANT PROVISIONS OF SECTION 275(1) (C) OF THE AC T/ IT REVEALS THE PENALTY ORDER OUGHT TO HAVE BEEN PASSED BY THE ADDL .CIT WITHIN THE SAME FINANCIAL YEAR IN WHICH ACTION FOR IMPOSITION OF PENALTY HAS BEEN INITIATED I.E.31-03-2011 OR WITHIN SIX MONTH FROM T HE END OF THE MONTH IN WHICH ACTION FOR IMPOSITION OF PENALTY IS INITIA TED I.E. 31.05.2011 WHICH-EVER DATE EXPIRES LATER. THUS, IN THIS CASE, THE TIME LIMIT FOR LEVY OF PENALTY EXPIRED ON 31-05-2011 AS THE ASSESSMENT ORDER WAS PASSED ON 30-11-2010 FOR THE A.Y.2008-09. HENCE, TH E PENALTY ORDER PASSED BEYOND THE LIMITATION PERIOD ON 25-08-2011 W HICH OUGHT TO HAVE BEEN PASSED ON. OR BEFORE 31-05-2011 IS BAD-IN -LAW AND WITHOUT JURISDICTION AND REQUIRES TO BE QUASHED. THE ASSESSEE RELIES ON THE DIRECT JUDGMENT OF THE H ON'BLE HIGH COURT OF MUMBAI IN THE CASE OF CIT V/S. CHHAJER PAC KAGING & PLASTIC (P) LTD REPORTED IN (2008) 214 CTR (BOM) 389. THE C OPY OF JUDGMENT (GIST) IS SUBMITTED FOR YOUR KIND PERUSAL. 7. ON THE OTHER HAND, LD. DR SUPPORTED THE ORDERS O F LOWER AUTHORITIES. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN APPEAL IS ARISING OUT OF TH E FACT ACCEPTED BY THE ASSESSEE ABOUT THE CASH LOAN OF RS.76,000/- TAK EN FROM SISTER CONCERN. AS THE CASH LOAN TAKEN WAS IN CONTRAVENTIO N OF THE PROVISIONS OF SECTION 269SS OF THE ACT, PENALTY U/S 271D WAS INITIATED BY THE ASSESSING OFFICER AND THE SAME WAS CONFIRMED BY LD. CIT(A). THE LD. AR MADE TWO FOLDS CONTENTIONS IN THIS REGAR D WHICH ARE (I) ITA NO. 316/AHD/2013 ASST. YEAR 2008-09 7 PENALTY UNDER SECTION 271D SHOULD NOT BE INITIATED BECAUSE THE CASH LOAN WAS TAKEN FROM SISTER CONCERN FOR THE BUSINESS PURPOSES AND (II) PENALTY ORDER HAS BEEN PASSED AFTER THE EXPIRY OF S TATUTORY TIME LIMIT MENTIONED IN SECTION 275C. 9. FIRST WE WILL DECIDE THE ISSUE ON THE FIRST CONT ENTION OF THE ASSESSEE. DURING ASSESSMENT PROCEEDINGS IT WAS OBSE RVED THAT CASH LOAN OF RS.76,000/- WAS RECEIVED FROM M/S JAY MAHAL AXMI TEXTILE IN FOUR INSTALMENT RS.19,000/- EACH ON 11.4.2007, 26.4 .2007, 14.5.2007 AND 25.5.2007. THE ASSESSEE HAS HIMSELF ACCEPTED TH AT THIS CASH LOAN WAS TAKEN TO REPAY THE SUNDRY DEBTORS BECAUSE THERE WAS SHORTAGE OF CASH WITH THE ASSESSEE. IN OTHER WORDS, ASSESSEE HAS CATEGORICALLY ACCEPTED THAT CASH LOAN EXCEEDING RS. 20,000/- HAS BEEN ACCEPTED DURING A YEAR FROM THE SISTER CONCERN M/S JAY MAHALAXMI TEXTILE LTD. IT WILL BE PROPER TO GO THRO UGH THE SECTION 269SS AND SECTION 271D WHICH READ AS UNDER :- [MODE OF TAKING OR ACCEPTING CERTAIN LOANS AND DEPO SITS. 269SS. NO PERSON SHALL, AFTER THE 30TH DAY OF JUNE, 1984, TAKE OR ACCEPT FROM ANY OTHER PERSON (HEREAFTER IN THIS SECTION REFERRED TO AS TH E DEPOSITOR), ANY LOAN OR DEPOSIT OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR ACCOUN T PAYEE BANK DRAFT 7A [ OR USE OF ELECTRONIC CLEARING SYSTEM THROUGH A BANK ACCOUNT ] IF, ( A ) THE AMOUNT OF SUCH LOAN OR DEPOSIT OR THE AGGREGA TE AMOUNT OF SUCH LOAN AND DEPOSIT ; OR ( B ) ON THE DATE OF TAKING OR ACCEPTING SUCH LOAN OR D EPOSIT, ANY LOAN OR DEPOSIT TAKEN OR ACCEPTED EARLIER BY SUCH PERSON FROM THE D EPOSITOR IS REMAINING UNPAID (WHETHER REPAYMENT HAS FALLEN DUE OR NOT), T HE AMOUNT OR THE AGGREGATE AMOUNT REMAINING UNPAID ; OR ITA NO. 316/AHD/2013 ASST. YEAR 2008-09 8 ( C ) THE AMOUNT OR THE AGGREGATE AMOUNT REFERRED TO IN CLAUSE ( A ) TOGETHER WITH THE AMOUNT OR THE AGGREGATE AMOUNT REFERRED TO IN CLAUS E ( B ), IS [TWENTY] THOUSAND RUPEES OR MORE : PROVIDED THAT THE PROVISIONS OF THIS SECTION SHALL NOT APPL Y TO ANY LOAN OR DEPOSIT TAKEN OR ACCEPTED FROM, OR ANY LOAN OR DEPOSIT TAKEN OR ACCE PTED BY, ( A ) GOVERNMENT ; ( B ) ANY BANKING COMPANY, POST OFFICE SAVINGS BANK OR CO-OPERATIVE BANK ; ( C ) ANY CORPORATION ESTABLISHED BY A CENTRAL, STATE O R PROVINCIAL ACT ; ( D ) ANY GOVERNMENT COMPANY 9 AS DEFINED IN SECTION 617 OF THE COMPANIES ACT, 1956 (1 OF 1956) ; ( E ) SUCH OTHER INSTITUTION, ASSOCIATION OR BODY OR CL ASS OF INSTITUTIONS, ASSOCIATIONS OR BODIES WHICH THE CENTRAL GOVERNMENT MAY, FOR REA SONS TO BE RECORDED IN WRITING, NOTIFY 10 IN THIS BEHALF IN THE OFFICIAL GAZETTE : 11 [ PROVIDED FURTHER THAT THE PROVISIONS OF THIS SECTION SHALL NOT APPL Y TO ANY LOAN OR DEPOSIT WHERE THE PERSON FROM WHOM THE LOAN OR DEPO SIT IS TAKEN OR ACCEPTED AND THE PERSON BY WHOM THE LOAN OR DEPOSIT IS TAKEN OR ACCE PTED ARE BOTH HAVING AGRICULTURAL INCOME AND NEITHER OF THEM HAS ANY INCOME CHARGEABL E TO TAX UNDER THIS ACT.] EXPLANATION. FOR THE PURPOSES OF THIS SECTION, 12 [( I ) 'BANKING COMPANY' MEANS A COMPANY TO WHICH THE BA NKING REGULATION ACT, 1949 (10 OF 1949), APPLIES AND INCLUDES ANY BA NK OR BANKING INSTITUTION REFERRED TO IN SECTION 51 OF THAT ACT ;] ( II ) 'CO-OPERATIVE BANK' SHALL HAVE THE MEANING ASSIGN ED TO IT IN PART V OF THE BANKING REGULATION ACT, 1949 (10 OF 1949) ; ( III ) 'LOAN OR DEPOSIT' MEANS LOAN OR DEPOSIT OF MONEY. ] [ PENALTY FOR FAILURE TO COMPLY WITH THE PROVISIONS O F SECTION 269SS . 271D. [(1)] IF A PERSON TAKES OR ACCEPTS ANY LOAN OR DE POSIT IN CONTRAVENTION OF THE PROVISIONS OF SECTION 269SS , HE SHALL BE LIABLE TO PAY, BY WAY OF PENALTY, A S UM EQUAL TO THE AMOUNT OF THE LOAN OR DEPOSIT SO TAKEN OR ACCEP TED.] [(2) ANY PENALTY IMPOSABLE UNDER SUB-SECTION (1) S HALL BE IMPOSED BY THE 34 [JOINT] COMMISSIONER.] 10. FROM GOING THROUGH THE ABOVE PROVISIONS OF THE SECTION 269SS AND SEC.271D OF THE ACT WE FIND THAT THE CASE OF TH E ASSESSEE SQUARELY FALLS UNDER THE PROVISIONS OF SECTION 269S S OF THE ACT AND A CLEAR CONTRAVENTION HAS BEEN MADE BY THE ASSESSEE O F THE PROVISIONS ITA NO. 316/AHD/2013 ASST. YEAR 2008-09 9 OF SECTION 269SS OF THE ACT AS THE ASSESSEE HAS ACC EPTED LOAN AND WAS DEPOSITED WHICH EXCEEDED RS.20,000/- I.E. RS.76 ,000/- OTHERWISE BY ACCOUNT PAYEE CHEQUE OR DRAFT OR BY EL ECTRONIC TRANSFER THROUGH BANK ACCOUNT DURING THE YEAR. IT IS PERTINE NT TO NOTE THAT ASSESSEE IS BASED AT SURAT AND THE SISTER CONCERN F ROM WHOM LOAN WAS TAKEN IS ALSO BASED IN SURAT AND THERE WAS NO R EASON FOR TAKING LOAN IN CASH AND AS THE ASSESSEE HAS MADE CONTRAVEN TION OF SECTION 269SS OF THE ACT THEN PENALTY PROCEEDINGS U/S 271D HAS BEEN RIGHTLY IMPOSED BECAUSE THERE WAS NO REASONABLE CAUSE PUT F ORWARD BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES AND BEFORE US WHICH COULD HAVE PROVED THAT THERE WAS A REASONABLE CAUSE DUE T O WHICH THE LOAN WAS TAKEN IN CASH. WE ARE OF THE VIEW THAT PENALTY U/S 271D HAS BEEN RIGHTLY IMPOSED AND CONFIRMED BY LD. CIT(A). A CCORDINGLY, WE DISMISS GROUND NOS.1 & 3 OF ASSESSEES APPEAL. 11. GROUND NO.2 IS OF GENERAL NATURE HENCE NO ADJUD ICATION IS REQUIRED. 12. NOW WE TAKE UP GROUND NO.4 WHICH HAS BEEN THE S ECOND FOLD OF CONTENTION OF LD.AR THAT PENALTY ORDER ISSUED U/S 2 71D WAS BARRED BY LIMITATION PROVIDED IN SECTION 275(1(C) OF THE ACT. TO EXAMINE THIS ASPECT LET US FIRST GO THROUGH THE PROVISIONS OF SE CTION 275(1)(C) WHICH READS AS UNDER :- SEC.275(1)- NO ORDER IMPOSING A PENALTY UNDER THIS CHAPTER SHALL BE PASSED - (C) IN ANY OTHER CASE AFTER THE EXPIRY OF THE FINAN CIAL YEAR IN WHICH THE PROCEEDINGS IN THE COURSE OF WHICH ACTION FOR THE I MPOSITION OF PENALTY HAS BEEN ITA NO. 316/AHD/2013 ASST. YEAR 2008-09 10 INITIATED, ARE COMPLETED, OR SIX MONTHS FROM THE EN D OF THE MONTH IN WHICH ACTION FOR IMPOSITION OF PENALTY IS INITIATED WHICHEVER PE RIOD EXPIRES LATER. 13. GOING THROUGH THE FACTS AS AVAILABLE ON RECORD, WE FIND THAT ASSESSMENT U/S 143(3) OF THE ACT FOR ASST. YEAR 200 8-09 WAS COMPLETED ON 30.11.2010. IN THIS ORDER IT WAS MENTI ONED THAT PENALTY U/S 271D ARE INITIATED SEPARATELY. ACCORDINGLY ON 2 6.4.2011 A SHOW CAUSE NOTICE WAS ISSUED AND SERVED UPON THE ASSESSE E AND PENALTY PROCEEDINGS U/S 271D OF THE ACT WAS INITIATED AND P ENALTY ORDER U/S 271D OF THE ACT WAS FRAMED ON 28.8.2011. SO THE TWO DATES WHICH ARE IMPORTANT ARE 31.3.2011 BEING THE LAST DATE OF FINANCIAL YEAR, AS THE ASSESSMENT WAS COMPLETED ON 30 TH NOVEMBER 2010 AND SECOND IMPORTANT DATE IS SIX MONTH FROM THE END OF THE MON TH IN WHICH PENALTY PROCEEDINGS WERE INITIATED I.E. AFTER THE E ND OF APRIL, 2011 SIX MONTHS COMPLETE ON 31.10.2011. MEANING THEREBY PENA LTY PROCEEDINGS SHOULD HAVE BEEN COMPLETED LATEST BY 31 .10.2011 (BECAUSE LATER OF THE TWO DATES MENTIONED ABOVE I.E . 31.3.2011 AND 31.10.2011). THE LD. AO HAS FRAMED THE PENALTY ORDE R ON 25.8.2011 WHICH IS WITHIN THE STATUTORY TIME LIMIT. HOWEVER, LD. AR WAS IMPRESSING UPON TO TAKE THE DATE OF ASSESSMENT ORDE R U/S 143(3) OF THE ACT I.E. NOVEMBER, 2010 AS THE DATE OF INITIATI ON OF PENALTY PROCEEDINGS WHICH IN OUR VIEW IS NOT CORRECT. DUE T O THIS REASON THE FACTS OF THE CASE OF ASSESSEE ARE NOT COVERED BY TH E DECISION OF HONBLE JURISDICTION HIGH COURT IN THE CASE OF CIT VS. SHREE AMBICA FLOUR MILLS CORPORATION (2008) 6 DTR (GUJ) 169. IN OTHER WORDS THE GROUND OF THE ASSESSEE IS ACCORDINGLY DISMISSED. ITA NO. 316/AHD/2013 ASST. YEAR 2008-09 11 14. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMIS SED. ORDER PRONOUNCED IN THE OPEN COURT ON 2 ND MARCH, 2016 SD/- SD/- (RAJPAL YADAV) JUDICIAL MEMBER (MANISH BORAD) ACCOUNTANT MEMBER DATED 2/03/2016 MAHATA/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, AHMEDABAD 1. DATE OF DICTATION: 17/02/2016 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE T HE DICTATING MEMBER: 18/02/2016 OTHER MEMBER: 3. DATE ON WHICH APPROVED DRAFT COMES TO THE SR. P. S./P.S.: 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE TH E DICTATING MEMBER FOR PRONOUNCEMENT: __________ 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S./P.S.: 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK:2 /3/16 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK: 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER: 9. DATE OF DESPATCH OF THE ORDER: