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2015 (8) TMI 693 - ITAT KOLKATA

2015 (8) TMI 693 - ITAT KOLKATA - TMI - Penalty proceedings u/s. 271D - violation of section 269SS - revision order passed by CIT u/s. 263 - Held that:- Hon’ble Calcutta High Court in the case of CIT vs. Linotype & Machinery Ltd., (1989 (7) TMI 9 - CALCUTTA High Court) held that the failure of the A.O. to initiate proceedings under section 271D for violation of section 269SS could not be considered as an error calling for revision under section 263. We therefore, find merit in the contention of .....

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ision order passed by CIT-XVI, Kolkata vide M. No. CIT-XVI/263/13-14/3755-758 dated 17.12.2013. Assessment was framed by ACIT, Circle-48, Kolkata u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as the Act ) for Assessment Year 2009-10 vide his order dated Nil. 2. The only issue in this appeal of assessee is against the revision order passed by CIT u/s. 263 of the act for revising the assessment framed by AO. For this, assessee has raised following effective ground no.2: 2. That .....

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10. It IS also found from the records that the assessee had taken unsecured loan of ₹ 6,00,000/- in total from various persons in cash and each of the case the loan amount was above ₹ 20,000/- i.e., in violation of Sec. 269SS. The assessee in the course of proceeding u/s. 263 admitted that 'we have taken cash loan in excess of ₹ 20,000/- during our extreme exigency which may kindly be condone by your honour...... 10.1. From the record it is seen that the AO had collected lo .....

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of the Act to initiate penalty proceedings u/s. 271D of the Act for violation of provision of section 269SS of the Act, Ld. Counsel for the assessee on this proposition filed copy of judgment of Hon ble Calcutta High court in the case of CIT Vs. Linotype & Machinery Ltd. (1991) 192 ITR 337 (Cal) wherein exactly on similar proposition Hon ble Calcutta High court has dealt the issue at para 6 & 7 of its order, which read as under: 6. At the hearing, Dr. Pal, learned counsel, has drawn our .....

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271(1)(a) and 273(b). Here, we find ourselves in complete agreement with the view taken by the Tribunal. It is well-established that, proceedings for the levy of penalty whether under Section 271(1)(a) or under Section 273(b) are proceedings independent of and separate from the assessment proceedings. Though the expression 'assessment' is used in the Act with different meanings in different contexts, so far as Section 263 is concerned, it refers to a particular proceeding that is being .....

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proceedings. As the Tribunal has pointed out, though it is usual for the Income-tax Officer to record in the assessment order that penalty proceedings are being initiated, this is more a matter of convenience than of legal requirement. All that the law requires, so far as the penalty proceedings are concerned, is that they should be initiated in the course of proceedings for assessment. It is sufficient if there is some record somewhere, even apart from the assessment order itself, that the Inc .....

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rt of the assessment proceedings and that the failure of the Income-tax Officer to record in the assessment order his satisfaction or the lack of it in regard to the leviability of penalty cannot be said to be a factor vitiating the assessment order in any respect. An assessment cannot be said to be erroneous or prejudicial to the interests of the Revenue because of the failure of the Income-tax Officer to record his opinion about the leviability of penalty in the case." Finally, Hon ble Ca .....

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o the interests of the Revenue. In the context of Section 263, the expression "assessment" refers to the particular "proceeding" which is to be considered. The Commissioner, in dealing with assessment proceedings and the assessment order, cannot expand his powers to deal with penalty proceedings when they are not before him. 10. In our view, the Tribunal in this case has come to a correct conclusion. In the assessment order, the Income-tax Officer did not record that the pena .....

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ty. For failure of the Income-tax Officer to record in the assessment order his satisfaction or the lack of it, the assessment order cannot be said to be erroneous or prejudicial to the interests of the Revenue. The Income-tax Officer must record his opinion about the leviability of the penalty on the facts of the case. The Income-tax Officer has to be satisfied that the assessee had furnished a statement of advance tax payable by him which he knew or had reason to believe to be untrue. 11. The .....

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