TMI Blog2017 (12) TMI 1518X X X X Extracts X X X X X X X X Extracts X X X X ..... g to be initiated under section 271(1)(c) of the Act. Thus, the penalty under section 271D was without any satisfaction and, therefore, no such penalty could be levied. The Assessing Officer did not record any satisfaction regarding penalty proceedings under section 271D of the I. T. Act in the assessment order. Though in that order the Assessing Officer initiated penalty proceedings under section 271(1)(c) of the Income Tax Act. Thus, the penalty under section 271D was without any satisfaction and, therefore, no such penalty could be levied - appeal allowed - decided in favor of assessee. - I. T. Appeal No. 121/Del/2016 - - - Dated:- 3-10-2017 - SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI L. P. SAHU, ACCOUNTANT MEMBER For The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s received and ₹ 26 lakhs was paid by / to him in cash on various dates during the year. The cash flow statement for deposit and withdrawal is reproduced at pages 3 to 7 of the penalty order. 3. From the table, it is clear that the company has accepted cash loan / cash deposits from Director amounting to ₹ 27,00,000/- and repayment of the same of ₹ 26,00,000/- was also made in cash, which is in violation of the provisions of section 269SS as well as section 269T of the I. T. Act, 1961. 4. The matter relating to imposition of penalty u/s 271D of the Act was referred to the Addl. CIT by Income Tax Officer, Ward 2(4), New Delhi. Accordingly, notice under section 274 read with section 271D of the I. T. Act, 1961 dated 22 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or related parties (Director) amounts to violation of section 269SS and 269T. Any payments or repayments made pursuant to current account maintained between panics cannot be considered as violation of 269SS and 269T CIT Vs. Idhayam Publications Ltd., (2006) 285 ITR 221 (Mad). In this case there was a current account in the books of the assessee in the name of the one of the directors who used to pay money into the current account and also withdraw money from the same. The department treated these payments and withdrawals as violation of section 269T as they were made in cash. Disapproving the action of the department the High Court has held that the deposit and withdrawal of money from the current account could not he considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eived is in the nature of loan which is in violations of provisions of section 269SS on which penalty u/s 271D of the Act is attracted. 6.2) Without prejudice to the above, even if the said transaction is not considered as loan, the acceptance of the above amount in cash clearly establishes its nature as deposit which is in violation of provisions of section 269SS for which penalty under section 271D is attracted. 7) As per provisions of sec.271D of the Act, a penalty equivalent to the aggregate amount of loan/deposits received is imposable upon the assessee. Accordingly, a penalty of ₹ 27,00,00.0/-, being the sum equal to the aggregate amount of loan or deposit: received in cash, as detailed above, is imposed u/s 271D of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ourt held that the penalty order passed on the basis of the original assessment order could not still survive when that assessment order had been set aside because the satisfaction recorded therein for the purpose of initiation of the penalty proceedings would also not survive. On further appeals : Held, dismissing the appeals, that in the fresh assessment order there was no satisfaction recorded regarding penalty proceedings under section 271D of the Act though in that order the Assessing Officer wanted penalty proceeding to be initiated under section 271(1)(c) of the Act. Thus, the penalty under section 271D was without any satisfaction and, therefore, no such penalty could be levied. 8.1 The assessee filed copy of the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X
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