TMI Blog2015 (7) TMI 196X X X X Extracts X X X X X X X X Extracts X X X X ..... given or taken. The entire process is on the basis of surmises and presumptions. It is also a fact that the assessee is no more and has expired. Considering the totality of the facts of the case, we are of the opinion that it is not a fit case for levy of penalty u/s.271D of the I.T. Act in absence of any direct evidence to show that the assessee, in the instant case, has accepted cash loan in violation of provisions of section 269SS. In this view of the matter, we set-aside the order of the CIT(A) and direct the AO to cancel the penalty levied u/s.271D. Since the assessee succeeds on merit, we refrain ourselves from deciding the legal arguments advanced by the Ld. Counsel for the assessee to the proposition that the penalty order is barred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er dated 25-06-2009 for initiation of penalty proceedings u/s.271D and 271E of the I.T. Act. After rejecting the various explanations given by the assessee the Addl.CIT held that the assessee has accepted the loan/deposit of ₹ 6 lakhs in contravention of the provisions of section 269SS of the I.T. Act and therefore is liable for levy of penalty u/s.271D of the I.T. Act. He, therefore, directed the assessee to pay ₹ 6 lakhs by way of penalty u/s.271D of the I.T. Act. 3. In appeal the Ld.CIT(A) upheld the penalty so levied by the Addl.CIT by observing as under : 7. I have carefully considered the facts of the case and rival contentions. On perusal of the same it has been noticed that Shri K.N. Mutha is undisputedly engaged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n or in the provisos providing for exceptions that if the entries of loan accepted or given have not been made in the books of accounts of the borrower and lender, then the provisions of section 269SS shall not be applicable. The second contention raised by the appellant is also rejected. The A.O. is, therefore, justified in holding that the appellant has accepted cash loan of ₹ 6,00,000/- from Shri K.N. Mutha. The case of the appellant is clearly covered by the provisions of section 269SS of the Act and not covered by exceptions provided in the said section. The appellant has not brought on record any reasonable cause for committing default u/s 269SS of the Act as envisaged by provisions of section 273B of the Act. In view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etter dated 25-06-2009 has made reference for initiation of penalty proceedings u/s.271D and 271E of the I.T. Act. Referring to the decision of the Mumbai Bench of the Tribunal in the case of Lodha Builders Pvt. Ltd. and others Vs. ACIT reported in (2014) 34 ITR (Tribunal) 157 (Mumbai) he submitted that the Tribunal in the said decision while explaining the meaning of action for imposition of penalty has held that the AO making reference to Addl.CIT for initiation of penalty is date of action for imposition of penalty and not date of show cause notice by Addl.CIT. Referring to provisions of section 275(1)(c) of the I.T. Act, he submitted that penalty order has to be passed within 6 months from the end of the month in which the action wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e order of the CIT(A) submitted that the same is not barred by limitation. 7. We have considered the rival arguments made by both the sides, perused the orders of the AO and the CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions relied on by both the sides. We find the AO referred the matter to the Addl.CIT for initiation of penalty proceedings u/s.271D and 271E of the I.T. Act since a number of signed dated/undated cheques were impounded from the premises of one Shri Kachrulal Nathmal Mutha according to which the assessee appears to have taken a cash loan of ₹ 6 lakhs from Shri Kachrulal Nathmal Mutha during the A.Y. 2006-07. We find before the CIT(A) the assessee submitted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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