Penalty Whether “Reasonable Cause” can be a Ground for Deletion of Penalty under section 271D?

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The Tax Publishers Income Tax--Penalty Whether 'Reasonable Cause' can be a Ground for Deletion of Penalty under Section 271D? Akhilesh Kumar Sah In this write-up the learned author examines an issue as to whether a reasonable cause can be a ground for deletion of penalty under Section 271D imposed for contravention of Section 269SS of the Act, which provides that no person shall take or accept any loan or deposit if it exceeds Rs. 20,000. Section 271D of the Act provides that a person who takes or accepts any loan or deposit in contravention of the provision of Section 269SS of the Act, he would be liable to pay by way of penalty a sum equal to the amount of the loan or deposit so taken or accepted. Section 273B provides that notwithstanding anything contained in the provisions of Section 271D, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provision if he proves that there was reasonable cause for such failure. With the help of a case law recently decided by Allahabad High Court in CIT v. Smt Dimpal Yadav with CIT v. Akhilesh Kumar Yadav [ITA No. 174 of 2015 with ITA No. 71 of 2013] decided on 21-8-2015, the learned author concludes that where a reasonable cause is shown by assessee-penalty under Section 271D cannot be imposed for contravention of Section 269SS of the Act. 1. Introduction According to Section 271D(1) of the Income Tax Act, 1961 (for short, 'the Act') if a person takes or accepts any loan or deposit or specified sum in contravention of the provisions of Section 269SS of the Act, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit or specified sum so taken or accepted. SUBSCRIBE FOR FULL CONTENT

The Tax Publishers

Income Tax--Penalty

Whether 'Reasonable Cause' can be a Ground for Deletion of Penalty under Section 271D?

Akhilesh Kumar Sah

In this write-up the learned author examines an issue as to whether a reasonable cause can be a ground for deletion of penalty under Section 271D imposed for contravention of Section 269SS of the Act, which provides that no person shall take or accept any loan or deposit if it exceeds Rs. 20,000. Section 271D of the Act provides that a person who takes or accepts any loan or deposit in contravention of the provision of Section 269SS of the Act, he would be liable to pay by way of penalty a sum equal to the amount of the loan or deposit so taken or accepted. Section 273B provides that notwithstanding anything contained in the provisions of Section 271D, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provision if he proves that there was reasonable cause for such failure. With the help of a case law recently decided by Allahabad High Court in CIT v. Smt Dimpal Yadav with CIT v. Akhilesh Kumar Yadav [ITA No. 174 of 2015 with ITA No. 71 of 2013] decided on 21-8-2015, the learned author concludes that where a reasonable cause is shown by assessee-penalty under Section 271D cannot be imposed for contravention of Section 269SS of the Act.

1. Introduction

According to Section 271D(1) of the Income Tax Act, 1961 (for short, 'the Act') if a person takes or accepts any loan or deposit or specified sum in contravention of the provisions of Section 269SS of the Act, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit or specified sum so taken or accepted.