INCOME TAX ACT, 1961

Penalty under section 271D and 271E- Contravention of sections 269SS and 269T-No unaccounted transaction

AO levied penalty under sections 271D and 271E on ground that the assessee had contravened the provisions of sections 269SS and 269T by accepting cash loans exceeding Rs. 20,000. CIT (A) as well as Tribunal deleted the penalty by holding that the contravention alleged against the assessee did not result in any unaccounted transaction such as lending and repayment and that both the lending and repayment were entered in the books of account of the assessee and the figure involved was meager and that the same was incurred only for meeting the sudden demand of overdraft account. Held:Tribunal after endorsing the findings of CIT (A) that the contravention alleged against the assessee did not result in any unaccounted transaction such as lending and repayment and that both the transactions were entered in the books of the assessee and the figure involved was also meager and that the same was incurred only for meeting the sudden demand of overdraft account, found that the order of CIT (A) was a well reasoned one and the same did not suffer from any infirmity requiring any interference. The findings of Tribunal were essentially factual and no question of law much a less substantial question of law arose for consideration of the High Court. It was to be held that there was no reason whatsoever to interfere with the findings of Tribunal that there was reasonable cause for the assessee for not strictly complying with the provisions of section 269SS. Therefore, Tribunal was justified in holding that the penalty under sections 271D and 271E could not be imposed for violation of sections 269SS and 269T.

Income Tax Act, 1961 Section 271D read with section 271E

Case Law Analysis:Referred:CIT v. Parma Nand [2004] 266 ITR 255 (Delhi).

Decision: In favour of Assessee.
A.Y. 1989-90

CIT v. Ratna Agencies