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2016 (7) TMI 1691 - AT - Income TaxLevy of penalty u/s 271D - competent authority to levy penalty - assessee had accepted loan / deposit in cash from his wife - violation of provisions of section 269SS - JCIT observed that the assessee had failed to prove the business exigency forcing him to accept the amount in cash and further the said transactions were conducted against some business urgency also and there was no major shortage was proved by the assessee - HELD THAT:- 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 Commissioner in respect of cases other than the cases covered in clauses (a) & (b) of sub-section (3). As considered by the CBDT that the statutory provisions clearly state that the competent authority to levy penalty is the Joint Commissioner, therefore, only the Joint Commissioner can initiate proceedings to levy penalty and such initiation of penalty proceedings could not be done by the AO. The CBDT has further acknowledged that statement in the assessment order that the proceedings under section 271D 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 assessment 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. Merits of levy of penalty under section 271D assessee was running business of contractor and his wife was a civil engineer and was also carrying on her activities. During the course of present assessment proceedings, the assessee had accepted cash from his wife. The wife of assessee was also attached to construction business of the buildings as civil engineer. The assessee claims that where he had received the aforesaid cash amount in cash from his wife, then no adverse interference is called for. There is merit in the claim of assessee as the intention of introducing the present section 269SS of the Act was to prevent the adjustment of entries by way of cash loans. However, the assessee has received the said cash from his wife and in such circumstances, there is no merit in holding the assessee to have defaulted and being liable for levy of penalty under section 271D - On this count also, we direct the AO to delete penalty levied u/s 271D.
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