TMI Blog2022 (1) TMI 235X X X X Extracts X X X X X X X X Extracts X X X X ..... OURT] - Decided against revenue. - ITA No.205/SRT/2017 - - - Dated:- 30-12-2021 - Shri Pawan Singh, Judicial Member And Dr. Arjun Lal Saini, Accountant Member For the Assessee : Shri P.M.Jagasheth CA For the Revenue : Ms. Anupama Singla Sr.DR ORDER UNDER SECTION 254(1) OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by Revenue is directed against the order of ld. Commissioner of Income Tax (Appeals-4), Surat dated 14.08.2017 for the Assessment Year (A.Y.) 2008-09. Initially this appeal was adjudicated and dismissed vide order dated 23.08.2019 due to Low Tax Affect. However, the order dated 23.08.2019 was recalled on filing Miscellaneous Application(M.A.) by the Revenue in M.A.No.31/SRT/2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut on assessee group on 05.11.2012. Consequent upon search notice under section 153A of the Act was served on the assessee for filing return for the year under consideration. In response to notice under section 153A of the Act, the assessee filed return of income on 02.09.2013 declaring income of ₹ 4,17,540/-. No additional income was offered in the return of income, filed in response to notice under section 153A. The assessment was completed under section 143(3) rws153A on 07.02.2015, in accepting return of income. Subsequently, the Joint Commissioner of Income Tax (ld.JCIT) levied penalty under section 271D of the Act. The ld.JCIT while passing the penalty order recorded that assessee firm received loan of ₹ 75 lakhs in cash f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... avin K.Jain in ITA No.1817/AHD/2013 dated 15.02.2017 and Kolkata Tribunal in R.Jawl in ITA No.2425/Kol/2013. Aggrieved by the order of the ld.CIT(A), the Revenue has filed present appeal before this Tribunal. 4. We have heard the submission of ld. Senior Departmental Representative (ld. Sr. DR) for the Revenue and ld.Authorised Representative(ld.AR) for the assessee and have gone through the orders of the Lower Authorities carefully. The ld.Sr.DR for the Revenue submits that during the course of search action, certain incriminating material was found and seized. On the basis of seized material, it was proved that assessee firm has received loan in cash from one of its partners. The said transaction was in violation of section 269SS of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITR 521] (2015) 64 taxmann.com 75 (SC). 6. In alternative submission, the ld.AR of the assessee further submits that provision of section 269SS of the Act are not attracted when money is exchanged inter-se between partner and partnership firm. It is settled legal position under law that firm is not a separate legal entity. All its rights and liabilities are vested in its partner. In taking or giving loan from partners in cash, no penalty under section 271D is levieable. To support his submission, the ld.AR relied upon the decision of Hon ble Delhi High Court in CIT vs. Muthoot Financiers 371 ITR 408 Delhi [2015] 55 taxmann.com 202 (Del). Hon ble Rajasthan High Court in CIT vs. Lokpat Film Exchange (Cinema) 304 ITR 179 (Raj), Hon ble Mad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessment was passed with the prior approval of Addl. CIT. We further find that while passing the assessment order, no reference to the office of ld.JCIT, under section 271D for levying penalty was made by A.O. 9. Before us, the ld.AR of the assessee vehemently submitted that in absence of satisfaction regarding initiation was recorded, therefore, no penalty is leviable. To support his submission, the ld.AR relied on the decision of Hon'ble Apex Court in CIT vs. Jal Laxmi Rice Mills (supra). We find that Hon'ble Supreme Court in CIT vs. Jal Laxmi Rice Mills held that where no satisfaction was recorded for initiating penalty under section 271E of the Act, the impugned penalty order deserved to be set-aside. In our view, the ra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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