1. The Revenue is aggrieved by an order dated July 26, 2004, passed by the Income-tax Appellate Tribunal in I.T.A No. 24 (Del)/2001. The impugned order has been passed in respect of the block period April 1, 1986 to March 31, 1997. It appears that the assessee had received an amount of Rs. 3 lakhs in cash from M/s. D.S Imports. According to the Assessing Officer, the amount represented undisclosed income in the hands of the assessee while according to the assessee it was a deposit made by M/s. D.S Imports.
2. Notwithstanding the fact that the Revenue was of the view that the amount was undisclosed income, penalty proceedings were initiated against the assessee for the violation of the provisions of section 269SS of the Income-tax Act, which provides that loans or deposits in excess of Rs. 20,000 should not be received in cash.
3. The assessee approached the Commissioner of Income-tax (Appeals) who passed an order on October 6, 2000 in which it was recorded that the assessee had received a deposit of Rs. 3 lakhs in cash in contravention of section 269SS of the Act and penalty under section 271D of the Act was imposable against the assessee.
4. Feeling aggrieved, the assessee filed an appeal out of which the impugned order dated July 26, 2004 has arisen.
5. In so far as the quantum issue is concerned, the Commissioner of Income-tax (Appeals) in a separate order dated September 6, 2000, came to the conclusion (in paragraph 7.2 of the said order) that the addition under section 158BC of the Act could not be sustained and that the Assessing Officer could at best have taken action under section 147 of the Act. Accordingly, the addition of Rs. 3 lakhs was deleted without prejudice to the action that the Assessing Officer may take for taxing this amount in regular assessment proceedings including proceedings under section 147 of the Act.
6. Against the order dated September 6, 2000, the Revenue preferred an appeal before the Income-tax Appellate Tribunal. By an order dated October 6, 2004, the Tribunal (in paragraph 9 of the said order) upheld the view taken by the Commissioner of Income-tax (Appeals) in his order dated September 6, 2000. The Tribunal held that the receipt was outside the scope of undisclosed income defined under section 158B(b) of the Act.
7. On these facts, we are of the view that the Revenue could not, on the one hand, contend that the amount of Rs. 3 lakhs is undisclosed income in the hands of the assessee and at the same time seek to initiate proceedings against the assessee for violation of the provisions of section 269SS of the Act which deals with cash deposits or loans in excess of Rs. 20,000.
8. The Revenue, having taken the stand that the income was undisclosed income in the hands of the assessee, it could not resort to proceedings under section 269SS read with section 271D of the Act, as held by the Tribunal.
9. Additionally, we agree with learned counsel for the assessee that since the block assessment could not be sustained, penal action may be permissible (if at all) only after a regular assessment is made. Under these circumstances, in our opinion, no substantial question of law arises in this appeal.
10. Dismissed.