9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2015 (10) TMI 321 - HC - Income TaxLevy of penalty under Section 271D - Whether the Tribunal is correct in concluding that the provisions of Section 269SS of the Act were attracted to the transactions under consideration with a view to levy penalty under Section 271D of the Act? - whether the exercise of discretion to find out the existence or nonexistence of a reasonable cause was properly explained by the authorities or not? - Held that - It is true that certain amount of discretion is vested in the assessing officer as well as the appellate authority and the Tribunal to choose not to impose penalty if the assessee proves that there was reasonable cause for the failure. But, what is reasonable cause is not clearly indicated either in section 269SS or in section 273B. Therefore, in an appeal under section 260A, we can only go by the question whether the exercise of discretion to find out the existence or nonexistence of a reasonable cause was properly explained by the authorities or not. We do not find any perversity in the approach of the Tribunal. As a matter of fact, instead of distinguishing the correctness of the discretion exercised by the assessing officer, the Tribunal has independently decided the question as to whether there was a reasonable cause or not. The Tribunal has independently applied its mind and come to the conclusion that there was no reasonable cause. In the circumstances, we do not think that question Nos.1 and 3 are to be answered in favour of the assessee. Accordingly, question Nos.1 and 3 are also answered against the assessee.
Issues:
1. Levy of penalty under Section 271D of the Act in the assessment year 1992-93. 2. Application of provisions of Section 269SS of the Act for penalty under Section 271D. 3. Existence of reasonable cause under Section 273B of the Act for penalty cancellation. Analysis: Issue 1: Levy of Penalty under Section 271D The appellant received cash payments during the assessment year 1992-93, leading to penalty proceedings under Section 271D for violating Section 269SS of the Act. The assessing officer imposed a penalty equivalent to 100% of the cash receipts. The appeal filed by the appellant was dismissed by the Commissioner of Income Tax and the Tribunal. The appellant challenged the correctness of the penalty imposition. Issue 2: Application of Section 269SS for Penalty under Section 271D The contention was whether Section 269SS was applicable to the transactions under consideration. The appellant argued that Section 269SS covers only cases of money receipts by way of loan or deposit. However, an amendment broadened the scope to include "any specified sum." The authorities found that the amounts received were reflected as "unsecured loan" in the balance sheet, leading to the conclusion that Section 269SS was indeed attracted. Issue 3: Existence of Reasonable Cause under Section 273B The appellant argued that under Section 273B, authorities have the discretion not to levy a penalty if a reasonable cause is proven for non-compliance with Section 269SS. Various case laws were cited to support this argument. However, the Tribunal independently assessed the situation and concluded that there was no reasonable cause for the violation. The Tribunal's decision was upheld, emphasizing that the appellant failed to prove a reasonable cause for the non-compliance. In conclusion, the High Court dismissed the Tax Case Appeal, upholding the penalty imposition under Section 271D. The Court found that the provisions of Section 269SS were applicable based on the appellant's own accounting treatment. Additionally, the Court affirmed the Tribunal's decision regarding the absence of a reasonable cause for the violation, thereby rejecting the appellant's arguments.
|
