2012 (4) TMI 796 - AT - Income Tax

Summary

Issues Involved:
Revenue's appeal against deletion of penalties u/s. 271D and 271E for assessment years 1995-96 to 1997-98.

Summary:

Issue 1: Deletion of Penalties u/s. 271D and 271E

1. The Revenue appealed against the deletion of penalties u/s. 271D and 271E for the assessment years 1995-96 to 1997-98.
2. The penalties were imposed due to violations of sections 269SS and 269T of the Income Tax Act during block assessment proceedings.
3. The Assessing Officer (A.O.) observed that the assessee accepted loans and made cash repayments, contravening the aforementioned sections.
4. The assessee argued that the amounts received were booking advances for construction projects, not deposits or loans, and were treated as trade receipts in their books.
5. The A.O. maintained that penalties under sections 271D and 271E were independent of block assessment proceedings and upheld the penalties.
6. The CIT (A) later deleted the penalties, noting that the deposits were treated as income for taxation purposes, and thus, no penalties were warranted.
7. The Revenue challenged the CIT (A)'s decision, but the Tribunal upheld the deletion of penalties, agreeing that once the amounts were treated as income, they could not be considered as deposits for penalty purposes.
8. Consequently, the appeals of the Revenue were dismissed, and the penalties u/s. 271D and 271E were deleted.

This judgment clarifies the distinction between penalties for violations of sections 269SS and 269T and the treatment of amounts as income, ultimately leading to the deletion of penalties u/s. 271D and 271E.