2013 (2) TMI 908 - HC - Income Tax

Summary

Issues involved: Appeal against penalty under section 271D and 271E for breach of sections 269SS and 269T.

Summary:
1. The Revenue appealed against the Income Tax Appellate Tribunal's order imposing penalties under section 271D and 271E on the respondent assessee for breaching provisions of section 269SS and section 269T. The main question was whether the Tribunal was correct in confirming the deletion of the penalty under section 271D. The Assessing Officer found that the assessee breached section 269SS by receiving cash advances exceeding Rs. 20,000. However, the Commissioner (Appeals) held that the deposits were treated as income for taxation purposes, and thus, there was no case for penalty under section 271D.

2. The Revenue appealed to the Income Tax Appellate Tribunal, which agreed with the CIT (Appeals) that the booking advances were treated as 'Deemed Sales' and considered as income. The Tribunal concluded that once the amount was treated as income, it could not be considered as a deposit for penalty under sections 271D and 271E. Therefore, the penalty was deleted by the Tribunal.

3. The High Court, after hearing the Revenue's counsel, upheld the decisions of the CIT (Appeals) and the Tribunal. The Court noted that the amounts in question were treated as booking advances and assessed as undisclosed income under section 68 during the assessment proceedings. As such, the Court agreed that there was no basis for invoking penalties under sections 269SS or 269T, and consequently, no penalty under section 271D or 271E. The Court dismissed the Tax Appeals.