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Judgment
PER VIMAL KUMAR, JM:
This appeal of Assessee is against order dated 01.07.2024 of the Learned Commissioner of Income Tax (Appeals)-3, Noida [hereinafter referred to as ‘the Ld. CIT(A)’] passed u/s 250 of the Income Tax Act, 1961, [hereinafter referred to as ‘the Act’] arising out of penalty order dated 28.02.2024 of the Ld. Assessing Officer/JCIT u/s 271D of the Act for Assessment Year 2017-18.
Brief facts of the case are that a search and seizure operation u/s 132 of the Act was carried out at the business and residential premises of Sharda Group of family and Agarwal family on 08.03.2020. Further survey u/s 133A of the Income Tax Act was conducted in four connected cases including the assessee. During the search proceedings, certain incriminating materials were found from premises of assessee. On perusal of Annexure-A2 (LP-1), an agreement dated 07.05.2016 was found and seized in the premises. As per agreement S/Sh. Sushil Kumar, Shashi Bhushan Gupta and Rajeev Agarwal had entered into an agreement to transfer a (Brick kiln) with name Harish Udhyog Bhatta to Pankaj Kumar for consideration of Rs.50,11,000/- out of which Rs.10,11,000/- was received in cash as advance. The said transaction was not reported by the assessee in return of income. Assessee is a sole proprietor of M/s A.K. Polymer Product had received cash of Rs.10.11,000/- in violation of provisions of section 269SS. So, order dated 27.06.2023 for considering imposition of penalty was passed. The show cause notice dated 08.08.2023 u/s 271D of the Act was issued. Assessee filed written submissions dated 16.08.2023. A show cause notice u/s 271D dated 23.11.2023 was issued. Assessee made compliance by filing written submissions dated 11.01.2024 through email. On completion of proceedings, Ld. AO vide order dated 28.02.2024 imposed penalty of Rs.10,11,000/-u/s 271D of the Act.
Against penalty order dated 28.02.2024 of Ld. AO, the assessee filed appeal before the Ld. CIT(A) which was dismissed vide order dated 01.07.2024.
4 Being aggrieved appellant assessee preferred present appeal on following grounds of appeal:
“1.The Ld. CIT(Appeals) has erred in confirming the Penalty of Rs.10,11,000 without considering the submissions of the Appellant and in absence of any corroborative evidence in support of cash advance received as per the seized documents. Further the lower authorities erred in not appreciating the corroborative evidence furnished and relied upon by the appellant.
2.The order of Ld. CIT(A) is against law and facts of case.”
Ld. Authorized Representative for appellant assessee submitted that on 08.03.2022 an agreement to sale was found and seized from premises of appellant assessee. The case was referred by ACIT on 27.06.2023 show cause notice was issued by Addl. CIT on 08.08.2023 penalty order u/s 271D was passed on 28.02.2024. First notice u/s 143(2) dated 27.06.2022 was issued after search for assessment, the penalty proceedings by ACIT were in pursuance to letter dated 27.06.2023 on basis on information of Investigation Wing dated 27.06.2022. Section 275 provides limitation for imposing of penalty order u/s 271D dated 28.02.2024 was barred by time. As per section 275(1), the limitation for passing penalty order was 30.09.2022. Reliance was placed on decision of Hon’ble Delhi High in ITA No.547/2024 titles as CIT (TDS)-2, Delhi vs. Turner General Entertainment Networks India Pvt. Ltd. order dated 06.11.2024 and Ram Krishan Verma vs. Addl. CIT [2023] 157 taxmann.com 7 (Jaipur-Trib) dated 03.07.2019.
Ld. Departmental Representative relied on orders of the departmental authorities.
From the examination of record in light of rival contention, it is crystal clear that an agreement dated 07.05.2016 was seized during the search and seizure operation dated 08.03.2020. The ACIT, Circle Meerut vide letter dated 27.06.2023 has referred the case for considering the imposition of penalty u/s 271D of the Act. In pursuance to show cause notice dated 08.08.2023 penalty order u/s 271D dated 28.02.2024 has been passed by Ld. AO. Ld. CIT(A) vide order dated 01.07.2024 upheld penalty order dated 28.02.2024.
According to ratio of judgment of Hon’ble in the case of CIT (TDS)-2, Delhi vs. Turner General Entertainment Networks India Pvt. Ltd. (supra), it is well settled that as per section 275(1)(c) no order in imposing penalty could be passed after expiry of six months from the end of month in which the action for imposing of penalty was initiated.
In view of above material facts and well settled of principle of law, it is held that penalty order dated 28.02.2024 having been passed in pursuance to letter dated 27.06.2023 referring the case for consideration the imposition of penalty being barred by time, is illegal. As such the impugned orders dated 28.02.2024 and 01.07.2024 of Ld. AO and Ld. CIT(A) are quashed. Therefore, grounds of appeal are accepted.
In the result, the appeal of the assessee is allowed.