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Income Tax Appellate Tribunal, “B”, BENCH KOLKATA
Before: SHRI A. T VARKEY, JM &DR. A.L.SAINI, AM
O R D E R
Per Dr. Arjun Lal Saini, AM:
The captioned appeal filed by the Assessee, pertaining to Assessment Year 2011-12, is directed against an order passed by the ld. Commissioner of Income Tax(Appeals), Durgapur in Appeal No.07/CIT(A)/DGP/2015-16 dated, 22.06.2017, which in turn arises out of a penalty order passed by the Jt. CIT u/s 271D of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’), dated 11.03.2015.
The ground of appeal raised by the assessee is as under: “1.For that the order passed u/s 271D by the Ld. Joint Commissioner of Income Tax is illegal and without jurisdiction as the order is barred by limitation and violative of the provision envisaged u/s 271(1)(c) of the Income Tax Act. 2.For that the ld. Joint Commissioner of Income Tax, in consideration of the facts and circumstances of the case, erred in imposing penalty of Rs.16,00,000/- u/s 271D as he did not dwell upon the reasonable cause of failure stated by the appellant.
Jagannath Banerjee Assessment Year: 2011-12 3.For that the appellant reserves its right to add to, to alter and/or to amend the ground/s taken and adduce paper/s and document/s at the time of hearing.” 3.The brief facts qua the issue are that in the assessee`s case under consideration, the assessment was completed assessment u/s 143(3) of the Act, on 17.03. 2014. During the course of assessment proceedings, the Income Tax Officer observed that the assessee had taken Loan in cash of Rs.8,00,000/- from Smt. Mangala Banerjee and Rs.8,00,000/- from Kousik Banerjee, in contravention of provisions of section 269SS of Income Tax Act 1961. The Jt. CIT imposed the penalty u/s.271D because the amount of loan was taken by the assessee in contravention of the provisions of section 269SS read with section 271D at Rs.16,00,000/- (Rs.8,00,000 +Rs.8,00,000). Therefore, the Jt. CIT imposed penalty u/s 269SS at Rs.16,00,000/-. The Jt. CIT issued a show casue notice to the assessee on 22.07.2014 asking the assessee, that why the penalty u/s 271D should not be imposed. Thereafter, the Jt. CIT issued notices on 08.08.2014, 19.08.2014 and 29.08.2014 but none appeared on behalf of the assessee. Subsequently, another date of hearing was fixed by the Jt. CIT on 26.02.2015, no response to the said notice. The assessed filed its written statement on 25.02.2015 stating reasons the loan so taken in cash. The Jt. CIT has passed the penalty order on 11.03.2015.
At the outset, the ld. Counsel for the assessee submitted before us that in this case, the penalty proceedings were initiated on 22.07.2014 and as per section 275(1)(c) of the Income Tax Act, penalty order should have been made within six months, i.e. up to 31.01.2015. In this case, the penalty order had been made by the Jt. CIT on 11.03.2015, which is not a valid penalty order because it has been framed by the Jt. CIT after 6 Months. In the assessee`s case under consideration, Page | 2