| The Tax Publishers2020 TaxPub(DT) 1283 (Mum-Trib) INCOME TAX ACT, 1961
Section 271D Section 271E Section 269SS. 269T, 273B/275(1)(c)
This Bench was of the view that, since the issue in all these appeals was decided by the Jurisdictional High Court and SLPs were also dismissed by the Supreme Court no purpose would be served even if the issue was referred for Special Bench before 12-6-2012, there was therefore, a reasonable cause within the meaning of section 273B hence, no penalty under section 271D/271E would be levied.
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Penalty under section 271D/271E - Reasonable cause - Loans/deposits taken/repaid through Journal entries before 12-6-2012 -
AO in the course of the assessment proceedings noticed that assessee recorded journal entries in its books of accounts accepting and repaying loans/deposits otherwise than account payee cheque or draft more than Rs. 20,000 from various group concerns of the assessee. The AO was of the view that there was contravention of provisions of section 269SS/269T since assessee received and repaid loan/deposit over and above Rs. 20,000 otherwise than by Account Payee Cheque or draft and accordingly an order under section 271D/271E was passed levying penalty. CIT(A) deleted the penalties. The only issue in all the appeals was as to whether there was a reasonable cause within the meaning of the provisions of section 273B on the loans/deposits taken and repaid through journal entries by the assessee within its group concerns. Held: It was not in dispute that in all these cases the journal entries were passed prior to the decision of the Triumph International Finance (I) Ltd. rendered on 12-6-2012. Therefore, the ratio of the decision in the case of the CIT v. Ajinath Hitech Builders Private Ltd. and others squarely applies to the facts of the assessee case. There was a reasonable cause within the meaning of the provisions of section 273B in passing the journal entries for the loans/deposits taken and repaid by the assessee, as all these entries were made prior to 12-6-2012 and the ratio of the decision of the Bombay High Court in the case of CIT v. Ajinath Hitech Builders Private Ltd.& Ors. was squarely applicable. Thus, there was no infirmity in the order passed by the CIT(A) in deleting the penalty.
Followed:CIT v. Ajinath Hitech Builders Private Ltd. & Ors. ITA. Nos. 171, 172, 202, 203, 218 & 219 of 2015, dated 6-2-2018 : 2018 TaxPub(DT) 764 (Bom-HC),Aashthavinayak Estate Co. Ltd. ITA No. 602/Mum/2017, dt. 31-5-2018, Dy. CIT v. Mahavir Build Estate (P) ltd. ITA No. 1480 & 1481/Mum/2017, dated 13-3-2019. Relied:Dy. CIT v. Lodha Constructions & Ors. ITA No. 110,111, 139 to 142/Mum/2017, dated 30-7-2018. Distinguished:Triumph International Finance (I) Ltd. (2012) 22 Taxmann.com 138 (Bom.) rendered on 12-6-2012 : 2012 TaxPub(DT) 2091 (Bom-HC).
REFERRED : V.N. Parekh Securities Pvt. Ltd. v. Asstt. CIT ITA. No. 6082 & 6083/Mum/2009, dated 16-8-2013.
FAVOUR : In assessee's favour.
A.Y. :
INCOME TAX ACT, 1961
Section 254
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