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2014 (6) TMI 140 - ITAT DELHIDeletion of penalty u/s 271E - Violation of section 269T of the Act – transfer of loan by journal entry - period of limitation – Held that:- When there is any acceptance/ repayment of loan in violation of section 269SS/269T, it is the AO who has to prima facie satisfy himself whether there is a violation of section 269SS/269T and if there is a violation then he may initiate the penalty proceedings u/s. 271D/271E and thereafter should refer the matter to the Joint Commissioner of Income Tax who will finally decide and if satisfied, will levy the penalty u/s 271D/271E - The AO when noticed the transfer of loan by journal entry, he prima facie formed an opinion of violation of section 269T. The assessment order is followed by the penalty notice issued on the same date - the period of limitation is to be counted from the date of the initiation of the penalty proceedings by the AO - the penalty proceedings was initiated in the course of assessment proceedings in the financial year 2011-12, such financial year expired on 31.3.2012 - Six months from the initiation of penalty proceedings also expired on 30.6.2012 - The penalty order has been passed on 14.9.2012 which was certainly after the period of limitation prescribed u/s. 275(1)(c) - CIT(A) rightly held that the penalty order to be barred by limitation. U/s 269T no person shall repay the loan otherwise, than by an account payee cheque or account payee bank draft drawn in the name of the person who has made the loan - the assessee has transferred the loan by way of journal entry to his wife - When the assessee has transferred the loan from himself to his wife by way of journal entry, it is only the substitution of one debtor by another debtor - creditors has not received any amount and since the creditors has not received any amount, it cannot be said that there is a repayment of loan - Section 269 would come into play only when there is actual repayment of loan - Merely because loan is assigned by the assessee to his wife by way of journal entry, it cannot be said that there is a repayment of loan, otherwise, than by account payee cheque or account payee bank draft, so as to penalize the assessee u/s 271E – CIT(A) was of the view that the assessee is not liable to be penalised u/s. 271E – thus, there was no justification to interfere with the order of the CIT(A) – Decided against Revenue.
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