TMI Blog2008 (5) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of penalty proceedings has to be construed with reference to the steps taken by the Joint Commissioner of Income-tax which started on 3-9-2003 and not by the Income-tax Officer's notice dated 1-8-2003 since as enjoined by section 271E(2), Joint Commissioner of Income-tax is the only competent authority to levy penalty under section 271E of the Income-tax Act, 1961. 2. Whether the learned Income-tax Appellate Tribunal was justified in quashing the penalty after arriving at the conclusion there was no passing of money while ignoring the entries made by the assessee in his books of account indicating the reduction in the balance amount payable to the creditor. 2. The brief facts of the case are that there was a depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income-tax Appellate Tribunal, and having considered the arguments, I hold that no penalty in the facts and circumstances of the case is leviable, since it is a time barring matter and there is no passing of the money. 3. Heard Sri D.D. Chopra, learned Senior Standing Counsel and Sri Ratnesh Chandra, learned counsel for the assessee. For the convenience it is useful to refer sections 271E, 273B and 275(1)( c). 271E. Penalty for failure to comply with the provisions of section 269T.-(1) If a person repays any loan or deposit referred to in section 269T otherwise than in accordance with the provisions of that section, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or dep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onths from the end of the month in which the order of the Commissioner (Appeals) or, as the case may be, the Appellate Tribunal is received by the Chief Commissioner or Commissioner, whichever period expires later : Provided that in a case where the relevant assessment or other order is the subject-matter of an appeal to the Commissioner (Appeals) under section 246 or section 246A, and the Commissioner (Appeals) passes the order on or after the 1st day of June, 2003 disposing of such appeal, an order imposing penalty shall be passed before the expiry of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed, or within one year from the end of the financ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on merit properly and, therefore, to decide the matter afresh on merit, the matter should be sent back to the Tribunal. 5. Learned counsel for the assessee submitted that the notice for the penalty was issued by the Income-tax Officer on 1-8-2003 and the penalty order was passed by the Joint Commissioner on 29-3-2004 and, therefore, in view of the section 275(1)(c) of the Act, the order passed by the Joint Commissioner was beyond time. He, however, admitted that if the date of issuing the notice by the Joint Commissioner is to be considered which was on 3-9-2003, the order of the Joint Commissioner was within time. He further submitted that on merit the present case does not fall within the purview of section 271E of the Act. In su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nsider whether the period of six months should be calculated from the date of notice issued by the Income-tax Officer or by the Joint Commissioner of Income-tax who was competent to levy the penalty under section 271E of the Act. 8. In this view of the matter, the order of the Tribunal is erroneous. Question No. 1 is answered in favour of the revenue and against the assessee. 9. So far as the question on merit is concerned, perusal of the order of the Tribunal reveals that the issue has not been properly considered by the Tribunal. The Tribunal has not recorded any finding that whether on the facts and circumstances there was any default under section 269T of the Act and the penalty under section 271E of the Act was leviab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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