2005 (9) TMI 75 - HC - Income Tax

Summary

Issues:
Appeal under section 260A of the Income-tax Act, 1961 - Substantial question of law within the meaning of section 260A - Imposition of penalty under section 271D of the Act - Contravention of section 269SS of the Act.

Analysis:
The appeal was filed by the assessee under section 260A of the Income-tax Act, 1961, challenging the order passed by the Income-tax Appellate Tribunal regarding the imposition of a penalty under section 271D of the Act for the assessment year 1998-99. The main issue for consideration was whether the appeal involved any substantial question of law. The High Court, after hearing the counsel for the appellant and examining the case record, concluded that the appeal did not raise any substantial question of law but was primarily a question of fact. Therefore, the appeal was dismissed.

The dispute in the case centered around the imposition of a penalty under section 271D of the Act due to the assessee receiving a loan amount in cash exceeding Rs. 20,000, thereby violating the provisions of section 269SS of the Act. The penalty amount was initially set at Rs. 3,19,420 by the Assessing Officer, later reduced to Rs. 2,89,420 by the Commissioner of Income-tax (Appeals), a decision upheld by the Tribunal. The High Court noted that the Tribunal had thoroughly examined the transactions and found that the money received in cash was not credited as share application money, leading to the conclusion that the penalty was justified. The Court agreed with the Tribunal's findings and upheld the decision.

The High Court emphasized that the case primarily involved factual determinations rather than legal questions, as the Tribunal had independently assessed the facts and concluded that the explanation provided by the assessee was insufficient. The Court reiterated that it could not re-examine the facts or explanations offered by the parties. Since the Tribunal's decision was based on a factual analysis and did not involve any substantial question of law, the High Court affirmed the Tribunal's findings and dismissed the appeal. Consequently, the appeal was rejected, and the decision to impose the penalty under section 271D of the Act was upheld.