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Issues involved: Appeal against penalty imposed u/s 271D of the Income Tax Act for accepting cash loan above prescribed limit of Rs. 20,000.
Summary: 1. The appeal was filed against the penalty imposed u/s 271D for accepting a cash loan above the prescribed limit. Assessee argued the transaction was genuine with reasonable cause, while the Department defended the penalty imposition. 2. The Revenue claimed default u/s 269SS due to accepting a cash loan above Rs. 20,000, leading to the penalty imposition u/s 271D. Assessee explained the circumstances necessitating the cash loan, which was not accepted by the Assessing Officer. 3. Sections 269SS and 271D were analyzed, emphasizing the requirement of a reasonable cause for failure to comply with section 269SS. Previous court decisions highlighted that penalties should not be imposed for genuine mistakes or when there is a valid explanation for non-compliance. 4. The objective of section 269SS is to prevent false entries and curb black money inflow. However, the Assessing Officer should exercise discretion in genuine cases with reasonable cause. In this case, the cash loan was received due to urgent financial needs, and there was no dispute regarding the source of funds. 5. The Tribunal directed the Assessing Officer to delete the penalty, considering the genuine nature of the transaction and the reasonable cause for accepting the cash loan. 6. The appeal of the assessee was allowed, and the order was pronounced in the open court on 15th September 2011.
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