Baldev Singh Vs Addl. CIT (ITAT Chandigarh)
Chapter-XXI of the Income Tax Act deals with penalty imposable/leviable. Penalty under various sections are imposable by the revenue authorities, where they are satisfied that particular default defined under the respective section/s has been committed by the assessee. The language of section is clear that the penalty can be imposed only if there is violation of one or more of the circumstances mentioned in the section. The levy of penalty for failure to perform statutory obligation prescribed under the Act is a matter of discretion of the authorities to be exercised judicially and on consideration of relevant circumstances and the law laid down by the Apex Court on the issue of levy of penalty. Imposition of penalty in the given set of circumstances is not mandatory but discretionary and in order to exercise its power on levy of penalty under the respective section/s, primary conditions is that the proceedings in respect of the said assessee for the captioned assessment year should be pending before the Assessing Officer to come to the conclusion that the given set of facts and circumstances merits the initiation of penalty proceedings in the case. In the facts of the present case before us, no proceedings were initiated for the financial year 2004-05 i.e. assessment year 2005-06, which is the year to which the aforesaid transaction of accepting and payment of the cash loan relates. The show cause notice was issued to the assessee by the Assessing Officer, however, in the proceedings relating to assessment year 2007-08 and even penalty proceedings were in initiated under sections 271D and 271E of the Act while completing assessment order relating to assessment year 2007-08. We find no merit in the said initiation of penalty proceedings under sections 271D and 271E of the Act relating to assessment year 2005-06, while completing assessment proceedings relating to assessment year 2007-08.
The assessee in the present case has also raised the plea of reasonable cause, that the person advancing the loan was agriculturist and had no bank account. Accordingly, we delete the penalty levied under sections 271D and 271E of the Act.
