2010 (11) TMI 1039 - AT - Income Tax

Summary

Issues involved: Appeal against deletion of penalty u/s. 271D and 271E for violation of Section 269SS and 269T of the Income Tax Act.

Summary:

Issue 1: Time-barred appeals
The revenue's appeals were initially time-barred, but the delay was condoned as the appeals were filed together within the stipulated time with one forwarding letter only. The ITAT found reasonable cause for the delay and proceeded to dispose of the appeals on merits.

Issue 2: Penalty imposition under Section 269SS and 269T
The Assessing Officer imposed penalties u/s. 271D and 271E for cash transactions allegedly violating Section 269SS and 269T. The Ld. CIT(A) deleted the penalties, leading to the revenue's appeals. The revenue argued that the penalties were justified, while the assessee contended that they were unwarranted due to the nature of the transactions.

Issue 3: Decision and reasoning
After considering the arguments and case laws cited, the ITAT upheld the Ld. CIT(A)'s decision to delete the penalties. The ITAT noted that the transactions were between sister concerns, not loans or deposits, and were advances without interest or stipulated return time. Citing relevant case laws and CBDT Circulars, the ITAT found no need to interfere with the Ld. CIT(A)'s order and dismissed the revenue's appeals.

In conclusion, the ITAT upheld the decision to delete the penalties, emphasizing the nature of the transactions between sister concerns and the absence of contrary material from the revenue authorities. The appeals filed by the revenue were dismissed, and the order was announced on 16.11.2010.