Shri Sunil Kumar Sood Vs JCIT (ITAT Delhi)
Assessee had taken cash loan from his wife for purchase of two properties during the F.Y. 2007-08. He submitted that the provisions of section 269SS do not bar genuine cash transactions of loan but bar only those transactions which are entered with the intention to evade taxes. These provisions are made to counteract evasion of tax but not to bar cash transactions between close relations. He submitted that in the instant case, it is not a case where unaccounted cash was found in the course of search and seizure operations. The assessee was helped by his wife for acquiring two properties out of which one was for the residence of family members and the other property was for office purposes.
Various benches of the Tribunal are holding that transaction of loan between husband and wife does not attract the provisions of section 269SS of the Act. The Kolkata Bench of the Tribunal in the case of Tuhinara Begum Hoogly Vs. JCIT Range 2, Hoogly ITA No. 2256/Kol/2014 order dated 04.10.2017 under somewhat similar circumstances cancelled the penalty levied u/s 271 D of the Act.
Since in the present case also the assessee had taken the loan from his wife for the purchase of house which is for the benefit of the whole family, therefore, following the decision cited [supra], we hold that penalty levied u/s 271D of the Act in the instant case is not justified. We, therefore, set aside the order of the ld. CIT(A) and direct the Assessing Officer to cancel the penalty so levied.
Initiation of Penalty Proceeding U/s. 271D after a gap of more than four and half years from the completion of assessment proceedings u/s 143(3) is barred by limitation
In the instant case was passed on 09.12.2009. Penalty notice u/s 271 D was issued to the assessee on 28.08.2014. Thus, there is gap of more than four and half years from the date of completion of assessment order and initiation of penalty proceedings. Although there is no time limit prescribed for initiation of penalty proceedings under the said provisions, however the courts are invariably holding that such proceedings should be initiated within a reasonable time. Since in the instant case such penalty proceedings have been initiated after a gap of more than four and half years from the completion of assessment proceedings u/s 143(3) of the Act, therefore, initiation of penalty proceedings, in our opinion, is barred by limitation.
