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2018 (6) TMI 1848 - AT - Income TaxPenalty levied u/s 271D - assessee has received cash exceeding ₹20,000/- from the Trust - assessee contended before AO that there was no loan or deposit - HELD THAT:- We have carefully gone through the judgment of Madras High Court in Idhayam Publications Ltd. [2006 (1) TMI 97 - MADRAS HIGH COURT] assessee contended before the Assessing Officer that there was no loan or deposit. AO rejected the claim of the assessee and levied penalty. The Tribunal, however, found that the proprietor of the sister concern, which deposited the funds, was one of the directors of the company and there was a running current account in his name. Therefore, there is no violation of Section 271D of the Act. In this case also, Shri A.N. Radhakrishnan is one of the directors in the assessee-company and he is also a trustee in other two Trusts. Therefore, this Tribunal is of the considered opinion that it is not a fit case for levying penalty under Section 271D of the Act. Period of limitation - Moreover, for the assessment years 2008-09 and 2009-10, the penalty proceeding was initiated almost after six years. In view of the judgment of Madras High Court in M. Srinivasa Rao [2007 (9) TMI 32 - HIGH COURT , MADRAS] penalty proceeding should have been initiated within reasonable time even though no limitation was provided in the Income-tax Act. The threat of initiating penalty proceeding cannot be allowed to hang over the head of the assessee for an unreasonable period of time. There should be an end to the proceeding, that also within a reasonable period. Hence, in view of the judgment of Madras High Court in M. Srinivasa Rao (supra), the penalty proceeding initiated by the Assessing Officer for assessment years 2008-09 and 2009- 10, after the expiry of almost six years, is barred by limitation. Appeals filed by the assessee are allowed.
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