TMI Blog2016 (4) TMI 303X X X X Extracts X X X X X X X X Extracts X X X X ..... - - Dated:- 2-3-2016 - Shri Rajpal Yadav, JM, Manish Borad, AM. For The Appellant by Shri M. K. Patel, AR For The Respondent by Shri Vilas V. Shinde, DR ORDER PER Manish Borad, Accountant Member. This appeal of the assessee is directed against the order of ld. CIT(A)-IV, Surat dated 7.11.2012. Penalty order u/s 271D of the IT Act, 1961 (in short the Act) for Asst. Year 2008-09 was framed by Addl. CIT, Range-3, Surat on 25.8.2011. Grounds of appeal [1] On the facts and in the circumstances of the case as well as law on the subject, the penalty order passed by the learned ADDL. CIT Range - 3, Surat u/s.271D levying penalty to the tune of ₹ 76,000/- is barred by limitation and hence bad-in law and without jurisdiction. [2] On the facts and in the circumstances of the case as well as law on the subject, the demand notice issued u/s.156 on passing the penalty order ought to have been signed by the Addl. CIT Range -3 Surat. [3] On the facts and in the circumstances of the case as well as law on the subject, the A.O. ought to have considered that the loan transaction in cash is with sister concerns (family members) only. [4] On the facts a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of limitation for purpose of Sec. 275 is to be reckoned from the date when penalty proceedings are initiated by the Addl. CIT and not from the date on which the assessment proceedings have been completed. Accordingly relying on the ruling given in the above case, it is held that the order passed by the Addl. CIT, Range-3 on 25.08.2011 was passed well within time as per the provisions of section 275(l)(c) of the IT Act and is in order. The penalty order u/s 271 D has been signed by the Addl CIT, Range -3 Surat while the demand notice and challan have been rightly signed by the ITO Ward 3(1), Surat as the jurisdiction over the appellant vests with the latter. Accordingly the first two grounds of appeal are dismissed. 4.2 As regards the third ground of appeal pertaining to loan accepted from M/s. Jay Mahalaxmi Textiles on various dates amounting to ?76,000/-in cash in contravention of the provisions of Sec. 269SS of the Act are concerned the appellant submitted that the appellant had entered into loan transactions with sister concerns only. The transactions carried out with sister concerns through in cash are genuine, bonafide and without any malafide intention. The appellan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s taken from sister concern M/s Jay Mahalaxmi Textiles whose proprietor is assessee s brother. This transaction was required to be made as one of the purchase party of the assessee i.e. Doriwala Dyed Yarns insisted for the cash payment in respect of the purchase made. However, due to shortage of cash in the hand of assessee, he had to borrow from his sister concern viz. Jitesh R. Kinariwala for making payment to the purchaser. The transactions carried out between the sister concerns in cash are genuine, bona fide and without any mala fide intention. Further the sister concern is also assessed to tax in the same ward with the same Assessing Officer and during the relevant year the then Assessing Officer, framed the scrutiny assessment in both the cases and accepted the returned income filed by them. 6. As regards second fold of contentions of ld. AR, he submitted that the then learned A.O. vide para 4 of his assessment order dated 30-11-2010 initiated the penalty proceedings u/s.27lD of the I.T.Act by issuing separate penalty notice u/s.274 r.w.s. 271 of the Act dated 30-11-2010 vide penalty Reg.No.5/83/10-11. The copy of assessment order along with penalty notice issued by the l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in this regard which are (i) penalty under section 271D should not be initiated because the cash loan was taken from sister concern for the business purposes and (ii) penalty order has been passed after the expiry of statutory time limit mentioned in section 275C. 9. First we will decide the issue on the first contention of the assessee. During assessment proceedings it was observed that cash loan of ₹ 76,000/- was received from M/s Jay Mahalaxmi Textile in four instalment ₹ 19,000/- each on 11.4.2007, 26.4.2007, 14.5.2007 and 25.5.2007. The assessee has himself accepted that this cash loan was taken to repay the sundry debtors because there was shortage of cash with the assessee. In other words, assessee has categorically accepted that cash loan exceeding ₹ 20,000/- has been accepted during a year from the sister concern M/s Jay Mahalaxmi Textile Ltd. It will be proper to go through the section 269SS and section 271D which read as under :- [Mode of taking or accepting certain loans and deposits. 269SS. No person shall, after the 30th day of June, 1984, take or accept from any other person (hereafter in this section referred to as the depositor), any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n or deposit so taken or accepted.] [(2) Any penalty imposable under sub-section (1) shall be imposed by the 34[Joint] Commissioner.] 10. From going through the above provisions of the section 269SS and sec.271D of the Act we find that the case of the assessee squarely falls under the provisions of section 269SS of the Act and a clear contravention has been made by the assessee of the provisions of section 269SS of the Act as the assessee has accepted loan and was deposited which exceeded ₹ 20,000/- i.e. ₹ 76,000/- otherwise by account payee cheque or draft or by electronic transfer through bank account during the year. It is pertinent to note that assessee is based at Surat and the sister concern from whom loan was taken is also based in Surat and there was no reason for taking loan in cash and as the assessee has made contravention of section 269SS of the Act then penalty proceedings u/s 271D has been rightly imposed because there was no reasonable cause put forward by the assessee before the lower authorities and before us which could have proved that there was a reasonable cause due to which the loan was taken in cash. We are of the view that penalty u/s 271D ..... X X X X Extracts X X X X X X X X Extracts X X X X
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