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Proceedings for levy of penalty under section 271E of the Income-tax Act, 1961 in relation to a default under section 269T of the 1961 Act. Petitioner seeks to quash penalty orders dated November 19, 1993, July 12, 1994, and December 20, 1994. Detailed Analysis: The petitioner-firm filed a return of income for the assessment year 1990-91, which was processed by the Income-tax Officer under section 143(3) of the 1961 Act. The Income-tax Officer accepted the returned figures with minor additions and granted continuation of registration under section 185 of the 1961 Act. However, proceedings under section 271E of the 1961 Act were initiated in relation to a cash repayment, leading to a penalty being imposed. The petitioner-firm provided explanations, but a penalty was levied by the Deputy Commissioner of Income-tax, which was later reduced by the Commissioner (Appeals) and further contested before the Income-tax Appellate Tribunal. The Income-tax Appellate Tribunal, in its order dated November 19, 1993, upheld the penalty of Rs. 25,000 under section 271E, which was challenged by the petitioner-firm through an application under section 254 of the 1961 Act. The application was rejected, leading to the filing of a writ petition to challenge the orders. During the hearing, the petitioner argued that the Tribunal erred in levying the penalty based on an incorrect assumption regarding the petitioner's conduct and failure to submit relevant documents. The petitioner contended that the penalty was imposed for technical defaults and not submitting documents. Reference was made to a previous case to support the argument. Upon reviewing the material on record, it was observed that the petitioner failed to prove the repayment of a certain amount by crossed cheque or bank draft as required by section 269T of the 1961 Act. The penalty under section 271E was imposed due to the non-compliance with the provisions. A comparison with a previous case highlighted the importance of proving a reasonable cause for contravening the law. Ultimately, the court found that the petitioner did not demonstrate a reasonable cause for the non-compliance with section 269T, leading to the conclusion that the Income-tax Appellate Tribunal's decision to impose the penalty was justified. The court dismissed the writ petition, stating that there was no basis for interference under article 227 of the Constitution. In conclusion, the judgment upheld the penalty under section 271E of the Income-tax Act, 1961, emphasizing the importance of complying with the statutory provisions and demonstrating a reasonable cause for any contraventions.
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