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2023 (5) TMI 63 - ITAT DELHIPenalty u/s 271E and 271D - cash deposits and repayment of deposits were found to be in contravention of section 269SS and 269T - penalty after the expiry of limitation period - whether or not penalty is barred by limitation within the meaning of section 275(1)(c) - HELD THAT:- We hold that the initial first SCN dated 04.05.2016 and other notices issued before 29.11.2016 by the Ld. JCITs were legally valid and penalty order should have been passed within the specified date upto which the period of limitation as per the provisions of section 275(1)(c) subsisted. This has not been done. Initiation of penalty proceedings by issuing fresh SCN dated 29.11.2016 and consequent levy of impugned penalty under section 271D and 271E are not in accordance with law having been passed beyond the time limit described under section 275(1)(c) of the Act. We, therefore, hold that the impugned penalty imposed under section 271D and 271E of the Act is not sustainable and both the impugned penalty orders passed under section 271D and 271E of the Act on 24.04.2017 are liable to be quashed. Reasonable cause for violation of the provision of section 269SS and 269T - As assessee has discharged the onus which lay upon it to establish the existence of reasonable cause for violation of the provision of section 269SS and 269T of the Act. In our opinion, the explanation offered by the assessee before the Ld. JCIT/CIT(A) was reasonable but was discarded merely because they proceeded on the premise that breach of condition provided under section 269SS and 269T shall necessarily lead to penal consequences which understanding in our humble opinion is not in accordance with law. We, therefore, cancel the penalty levied under section 271D and 271E. Appeals filed by the assessee are allowed.
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