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Issues involved:
The judgment involves the challenge to the order of the Tribunal regarding the imposition of penalty under section 271D for violation of provisions of section 269SS, based on the acceptance of cash deposits by the assessee during the relevant year. Issue 1: Justification of penalty under section 271D The Assessing Officer found that the assessee had accepted cash deposits in violation of section 269SS, leading to liability under section 271D. The explanation provided by the assessee regarding the urgency of the situation, related to the serious illness of the mother, was deemed not believable. The CIT(A) set aside the penalty, emphasizing that the cash deposits were not proved to be genuine and that no mens rea was involved. However, the Tribunal disagreed, considering the breach as clear and full-fledged, leading to the imposition of the penalty under section 271D. Issue 2: Technical breach and default The Tribunal distinguished between technical breach and technical default, emphasizing that if the requirements themselves are technical, contravention would be a technical default. In this case, the Tribunal found that the breach was not minor but significant, as the assessee failed to establish the urgency related to the cash deposits taken. The Tribunal noted discrepancies in the cash balances of the assessee, undermining the claim of urgent need for the cash deposits. The Tribunal concluded that the facts did not support the existence of any reasonable cause, leading to the dismissal of the appeal. Conclusion: The High Court upheld the imposition of the penalty under section 271D, considering the factual findings that negated the presence of any reasonable cause for the violation. Citing a recent Supreme Court judgment, the High Court ruled against the assessee on all questions raised, ultimately dismissing the appeal in favor of the Revenue.
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