2017 (2) TMI 460 - AT - Income Tax

Penalty u/s 271E - contravention of the provisions contained u/s 269T - CIT(A) proceeded to delete the penalty by treating the averments made by the assessee company during appellate proceedings that they have repaid the money in case of first two companies by way of cheques - Held that - It is difficult to make out as to how ld. CIT (A) has recorded in para 3.4 of the impugned order, that the money has been actually returned in subsequent years in respect of two parties through account payee cheques as mentioned in the assessment order , whereas no such findings are there in the penalty order. Assessee has not brought on record any such documents in the form of Paper Book before the Bench to support its averments made in written reply to the penalty notice rather preferred to be proceeded against ex-parte. So, in the given circumstances, we are of the considered view that to meet with the ends of justice, the matter is required to be restored to the ld. CIT (A) to decide afresh after providing an opportunity of being heard to the parties. So, the impugned order is set aside and consequently, the appeal is hereby allowed for statistical purposes.

Summary

Issues:
Appeal against penalty u/s 271E of the Income-tax Act, 1961 for AY 2009-10.

Analysis:
1. Facts and Initiation of Penalty Proceedings:
- The Assistant Commissioner of Income-tax initiated penalty proceedings u/s 271E against the assessee for making loan repayments without account payee cheques or bank drafts, in contravention of provisions u/s 269T.
- Assessee explained that loan amounts were transferred to share application money, not repayments, and that repayments were made to some creditors through account payee cheques.

2. Appeal before CIT (A) and Deletion of Penalty:
- CIT (A) deleted the penalty, citing that the loan amounts were not actually repaid but transferred to a different account, and repayments were made to some creditors through cheques in subsequent years.
- CIT (A) referred to relevant legal precedents and concluded that provisions of section 269T were not applicable in this case.

3. Tribunal's Decision and Restoration of the Matter:
- The Tribunal found discrepancies in the CIT (A)'s order regarding repayment evidence and lack of documentation from the assessee to support claims.
- Tribunal set aside the CIT (A)'s order, stating that the matter needed to be reconsidered after providing an opportunity for both parties to present evidence.

4. Conclusion:
- The Tribunal allowed the appeal for statistical purposes, highlighting the importance of proper documentation and evidence to support claims during penalty proceedings.
- The case emphasizes the need for clear and concrete evidence to substantiate claims made by the assessee during legal proceedings to ensure fair and just decisions.