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TMI Blog2023 (12) TMI 338X X X X Extracts X X X X X X X X Extracts X X X X ..... 1961 (the "Act") pertaining to Assessment Year ("A.Y.") 2014-15 on reference made by the ITO, Ward-2(1), Ghaziabad ("AO"). 2. The assessee has challenged the order of the Ld. CIT(A) on the following grounds:- "1. On the facts and circumstance of the case, the order passed by the Ld. Commissioner of Income Tax (Appeals) (CIT(A)] NFAC dt. 02.02.2023 is bad both in the eye of Law and on facts and decided the appeal on the ground which were never raised by the appellant. 2. That the learned CIT(A) erred in not deciding the following grounds as raised by the appellant (I) That the Learned JCIT issue the penalty order U/s 271E imposing penalty of Rs. 140000.00 without jurisdiction illegal, wrong, void and liable to be canceled. (II) Tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... A.Y. 2014-15 and no proceedings for the relevant assessment year were pending at any point of time, so initiation of penalty proceedings u/s 271E for A.Y. 2014-15 is illegal and invalid. The assessee relied on the following case judgments:- Baldev Singh Vs ACIT No: 1125 & 1126/CHD/2011 (ITAT Chandigarh). Annexure-1) Kirti Kumar Vs ACIT, Lucknow ITA No.:81/L/KW/2014 (ITAT Lucknow) Annexure-2. CIT Vs Manohar Lal Thakral ITA No: 812 of 2010 (Punjab & Haryana HC) Since no proceedings were pending for A.Y. 2014-15, therefore initiation of penalty 271E of the I.T. Act is bad in law and illegal. 2. That no cause of action arose to initiate the penalty proceedings as the assessment order for A.Y. 2014-15 which was the foundation of penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... old senior citizen reputed assessee "that he trying to get assessment completed through manipulated document and incorrect information." 7. For repayment made to Smt. Nirmal Jain vide Ch No. 042137 dated 12.04.2014. since the matter is related to A.Y. 2015-16, separate reply is being furnished and the said repayment was duly covered by account payee cheque. So, it is requested to drop the penalty proceedings u/s 271E of the I.T. Act for repayment of loan of Rs. 1,40,000/- to Sh. S C Jain on dated 21.03.2014 relevant to A.Y. 2014-15." 5. The explanation was not acceptable to the Ld. JCIT. According to him passing of order under section 143(3) of the Act before levy of penalty under section 271E of the Act is not at all required. The info ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence. The onus to establish the same with the aid of impeccable evidence is squarely upon the defaulter and would be de-hors other provisions of the Act." 7. This has brought the assessee before the Tribunal and all the grounds of appeal relate thereto. 8. The Ld. AR submitted the brief synopsis contained at pages 1 to 3 of the Paper Book which is reiteration of the arguments advanced by the assessee before the Ld. JCIT/CIT(A). The Ld. AR placed strong reliance on the decision of the Hon'ble Punjab & Haryana High Court in the case of CIT vs. Shri Manohar Lal Thakral in ITA No. 812 of 2010 decided on 14.01.2011 and decisions of ITAT Chandigarh in the case of Baldev Singh vs. Addl. CIT in ITA No. 1125 and 1126/Chd/2011 dated 28.02.2012 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m. Rather, the opening para 5.2 of his appellate order begins with incorrect statement contrary to the facts on records that during the course of assessment proceedings for A.Y. 2014-15 the Ld. AO noticed that the assessee has repaid his loans through bearer cheque and therefore was liable for penalty. The undisputed fact on record is that the Ld. AO during the course of assessment proceedings for A.Y. 2015-16 had collected information from Allahabad Bank which revealed that the amount of Rs. 1,40,000/- was repaid by the assessee vide cheque No.- 042133 on 21.03.2014 (relevant to A.Y. 2014- 15) to Shri S.C. Jain. The same information from the bank revealed that the assessee had repaid an amount of Rs. 50,000/- vide bearer cheque No. 042137 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see. No such action was taken. 12. It is not in dispute that there were no proceedings pending before the Ld. AO qua the assessee for A.Y. 2014-15. We, therefore hold that initiation of penalty proceedings under section 271E of the Act on the basis of assessment order for A.Y. 2015-16 is bad in law and imposition of impugned penalty by Ld. JCIT and confirmation thereof by the Ld. CIT(A) is not sustainable. The plea of Ld. Sr. DR that penalty under section 271D and 271E can be initiated dehors any pending proceedings for relevant A.Y. is devoid of merit. 13. We agree with the contention of the assessee that the Ld. CIT(A) decided the appeal on ground of 'reasonable cause' which was not raised by the assessee before him. The assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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