2010 (3) TMI 882 - AT - Income Tax

Summary

Issues involved: The judgment involves the interpretation and application of sections 269SS, 271D, 269T, 271E, and 273B of the Income Tax Act.

Summary:

Issue 1: Violation of section 269SS - Cash loans exceeding Rs. 20,000

The appeals by the revenue were against the CIT(A)'s order regarding the violation of section 269SS, where the assessee advanced loans exceeding Rs. 20,000 in cash. The Addl. CIT imposed penalties under section 271D for the assessment years 2004-05, 2005-06, and 2006-07.

Details:
- The assessee, an auto financier, was assessed under section 153A post a search under section 132.
- The Addl. CIT found a violation of section 269SS and levied penalties under section 271D.
- The CIT(A) subsequently deleted the penalties imposed under section 271D, leading to the revenue's appeal.

Issue 2: Applicability of sections 269SS and 271D

The tribunal analyzed sections 269SS and 271D, emphasizing that these sections do not apply in cases where the assessee received money in cash instead of advancing or accepting loans in cash. Therefore, the penalty under section 271D could not be imposed for receiving cash from the borrower.

Conclusion:
The tribunal upheld the CIT(A)'s decision to delete the penalties under section 271D, as the sections 269SS and 271D were deemed inapplicable to the scenario where the assessee received cash. Consequently, the revenue's appeals were dismissed.