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TMI Blog2016 (7) TMI 1691X X X X Extracts X X X X X X X X Extracts X X X X ..... peal order passed by the Ld. CIT(A)-Nashik confirming the levy of penalty levied by Jt. CIT, Range 1, Nashik under S.271-D of the Act of Rs.4,18,000/- without properly appreciating the provisions of S.273-B of the Act is contrary to the provisions of law. It be set aside. 2. On the facts and in the circumstances of the case and in law the lower authorities failed to appreciate the legal position emanating from the loan etc. from wife who is considered to be half-body of the husband and therefore not a loan/deposit from any third party. The transaction is not covered by S.269SS of the Act and therefore no penalty was leviable for violation of S.269SS of the Act u/s 271-D. The penalty levied and sustained be quashed. 3. On the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se notice to the assessee as to why penalty under section 271D of the Act should not be levied. The case of the assessee before the JCIT was that he was a builder, developer and was the proprietor of his business. He further pointed out that his wife was a civil engineer and she is used to do the job of drafting and getting the plans approved from the Nashik Municipal Corporation. In this regard, he pointed out that there was running account with his wife and wherein, there were cash transactions which were more than Rs.20,000/-. His claim before the JCIT that there was genuinety of the transactions and further, he had a bonafide belief that the family transactions were not covered under section 269SS of the Act. The amount was stated to ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incorrect. He referred to the CBDT Circular No.9/DV of 2016, dated 26.04.2016, wherein it has been observed that initiation of penalty proceedings should be during the course of assessment proceedings. The Circular clearly provides that where the Assessing Officer was below the rank of JCIT, then he was advised to make a reference to Range Head regarding violation of provisions of section 269SS of the Act and 269T of the Act, in the course of assessment proceedings or any other proceedings under the Act. 8. The learned Departmental Representative for the Revenue on the other hand, placed reliance on the orders of authorities below. 9. On perusal of record and after hearing both the learned Authorized Representatives, the issue which arise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter completion of assessment proceedings, the power exercised by the JCIT, Range-1, Nashik was not correct. In this regard, reliance was placed on Circular issued by the CBDT (supra). The learned Departmental Representative for the Revenue objected to the said reliance of assessee on the premise that the said Circular issued by CBDT was dated 26.04.2016 and was not available at the relevant time. 10. Under the provisions of section 272A(3)(c) of the Act, it is provided that any penalty imposable under sub-section (1) or (2) of the said section shall be imposed by the Joint Director or Joint Commissioner in respect of cases other than the cases covered in clauses (a) & (b) of sub-section (3). The issue which arises before the Tribunal is th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T that the statutory provisions clearly state that the competent authority to levy penalty is the Joint Commissioner, therefore, only the Joint Commissioner can initiate proceedings to levy penalty and such initiation of penalty proceedings could not be done by the Assessing Officer. The CBDT has further acknowledged that statement in the assessment order that the proceedings under section 271D and 271E of the Act are initiated is consequential since the initiation is by an authority who is incompetent. The proceedings in this regard can be initiated only by issuance of notice by the JCIT and the same has to be initiated in the course of assessment proceedings or any other proceedings under the Act. In the above said circumstances, penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X
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