TMI Blog2023 (8) TMI 1094X X X X Extracts X X X X X X X X Extracts X X X X ..... the part of the AO is absent in the case of the assessee then the penalty levied u/s 271D is not valid. Hon ble Supreme Court in Jain Laxmi Rice Mills [ 2015 (11) TMI 1453 - SUPREME COURT] has affirmed the view of the Hon ble High Court that in absence of satisfaction recorded regarding the penalty proceedings u/s 271E of the Act the order of levy of penalty is not valid. As decided in Vijayaben G. Zalavadia [ 2022 (5) TMI 1572 - ITAT AHMEDABAD] held impugned penalty under Section 271E is not permissible in the absence of regular assessment framed against the assessee by the Revenue. Hence, the same is not found to be sustainable. Therefore, it is pre-requisite condition that the initiation of penalty 271D/271E of the Act, there must be assessment proceedings or proceeding arising from assessment order are pending in the case of the assessee. Accordingly we hold that the penalty levied u/s 271D of the Act without any assessment proceedings in the case of the assessee is not valid and liable to be quashed - Decided in favour of assessee. - SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI B.M. BIYANI, ACCOUNTANT MEMBER For the Assessee : Shri Ram Gilda AR F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee and confirmed the penalty levied u/s 271D of the Act. 4. Before the Tribunal the Ld. AR of the assessee has submitted that the assessee is having small salary income which is below taxable limit, therefore the assessee did not file any return of income for year under consideration. He has further submitted that due to low income of the assessee the assessee was not eligible for any bank loan whereas the assessee was to purchase a house and therefore, the assessee taken loan in question. He has further submitted that the assessee has taken loan of Rs.6 lacs for A.Y.2008-09 Rs.4 lacs during the assessment year 2009- 10 and the same was repaid by the assessee during A.Y. 2009-10 itself. He has submitted that the initiation of the penalty proceedings u/s 271D 271E was invalid as there was no satisfaction recorded by the AO in the case of assessee or in the case of Shri Ramesh Chand Upadhya. He has further submitted that there is an inordinate delay in levying penalty u/s 271D and 271E of the Act as the same was levied in the year 2017 whereas the transaction of cash loan and repayment of the same pertains to A.Y. 2008-09 2009-10 respectively. 5. Ld. AR has relied ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or an appeal to the Appellate Tribunal under section 253, after the expiry of the financial year in which the proceedings, in the course of which action for the imposition of penalty has been initiated, are completed, or six months from the end of the month in which the order of 4 the Deputy Commissioner (Appeals) or] 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 financial year in which the order of the Commissioner (Appeals) is received by the [Principal Chief Commissioner or] Chief Commissioner or [Principal Commissioner or] Commissioner, whichever ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of section 274 shall apply in respect of the order imposing or enhancing or reducing penalty under this sub-section] 2. The provisions of this section as they stood immediately before their amendment by the Direct Tax Laws (Amendment) Act, 1987 (4 of 1988 ), shall apply to and in relation to any action initiated for the imposition of penalty on or before the 31st day of March, 1989.] 2 Explanation.- In computing the period of limitation for the purposes of this section,- (i) the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129; (ii) any period during which the immunity granted under section 245H remained in force; and (iii) any period during which a proceeding under this Chapter for the levy of penalty is stayed by an order or injunction of any court, shall be excluded.]] 9. The limitation for passing the order imposing penalty under chapter- XXI has been provided by considering all possible situation where the assessment order or other order is subject matter of appeal of the order is revised under section 263 or assessment order or other orders are subject matter of appeal before the Hon ble High ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... account payee drafts to M/s. Babyloan Builders Pvt. Ltd., Gurgaon and, therefore, penalty under Section 271E was leviable. 5. The Assessing Officer had levied the penalty amounting to Rs. 11,02,6107- which has been deleted by the Tribunal. The Tribunal while deleting the penalty recorded that the return of the assessee was processed as on 31.12.2003 and the notice u/s. 274 read with section 271E of the Act was issued on 12.06.2007. Such notice was issued when there was no proceedings pending before the Assessing Officer. Relying upon Delhi High Court judgment in CIT v. Standard Brands Ltd. [20061 285 ITR 295/155 Taxman 383, the Tribunal further observed that action for penalty may be permissible only after regular assessment has been framed and since no regular assessment order had been passed in this case, the recourse to penalty proceedings under Section 27IE were not justified. The findings recorded by the Tribunal read thus:- Having heard the parties and having perused the material on record, we find the grievance of the assessee to be correct. In this case, the return of the assessee was processed u/s. 143(l)(a) of the Income-tax Act, on 31.12.2003. Notice u/s. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st be assessment proceedings or proceeding arising from assessment order are pending in the case of the assessee. Accordingly in the facts and circumstances of the case and following the judgment of Hon ble Supreme Court as well as Coordinate Bench of the Tribunal in case of Vijayaben G. Zalavadia vs. JCIT (supra), we hold that the penalty levied u/s 271D of the Act without any assessment proceedings in the case of the assessee is not valid and liable to be quashed. We order accordingly. For A.Y. 2009-10 under section 271D 271E 12. There are two penalty orders passed u/s 271D 271E of the Act. The facts and circumstances for levy of the penalty u/s 271D of the Act are identical for A.Y. 2008-09as the assessee has taken loan of Rs.4 lac in cash during this year and also repaid the said loan. Further there is no return of income on behalf of the assessee and there was no initiation of assessment proceedings on behalf of the AO and only initiation of the penalty proceedings u/s 271D 271E of the Act without any assessment proceedings as well as recording of satisfaction are not valid. Accordingly in view of our findings on this issue for A.Y.2008-09 the penalty levied u ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
