9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (8) TMI 288 - HC - Income TaxImposition of penalty u/s 271D and 271E - acceptance and repayment of loans in cash - reasonable cause for entering into the transactions - Held that - From the regularity of the transaction in case of each of the depositors, it was apparent that receipt and repayment were in the nature of inter se transactions. After examining the matter, it was concluded by the CIT(A) that the remand proceedings found the creditors to be genuine agriculturists and their cash transactions also to be genuine, in as much as there was confirmation of the money having been deposited and returned. It was categorically recorded that the impugned transactions could not be said to have been aimed at attempting to evade tax thereby causing loss to the revenue. Thus, the imposition of penalty under Sections 271D and 271E of the Act was not held to be justified. As recorded by the Tribunal that there was reasonable cause for entering into the above said transactions. The creditors from whom the cash was received and repaid were held to be genuine and confirmation to that act was obtained from the said persons and the transactions were not made for attempting to evade tax. - Decided in favour of assessee.
Issues:
1. Penalty imposed under Section 271D of the Income Tax Act, 1961. 2. Application of Section 273B overriding Section 269SS. 3. Exclusion from Section 269SS based on bonafide transactions. 4. Consideration of past judgments by Punjab & Haryana High Court. Analysis: Issue 1: Penalty under Section 271D The appellant-assessee filed an appeal against the penalty imposed under Section 271D for accepting cash deposits exceeding the prescribed limit. The CIT(A) found the transactions genuine, involving identifiable agriculturists, and not aimed at tax evasion. The Tribunal upheld this finding, stating there was a reasonable cause for the transactions, and confirmed the genuine nature of the creditors and transactions. The appellant-revenue challenged this, arguing no reasonable cause was established. However, the Court found no illegality in the CIT(A) and Tribunal's findings, dismissing the appeal. Issue 2: Application of Section 273B and Section 269SS The penal provisions of Sections 271D and 271E are subject to Section 273B, which allows penalties only in cases without a "reasonable cause." The Court discussed the meaning of "reasonable cause," emphasizing it as an honest belief based on reasonable grounds. The CIT(A) and Tribunal found a reasonable cause for the transactions in question, as the cash received and repaid were genuine, with confirmations obtained. The Court upheld this decision, emphasizing that "reasonable cause" must be beyond the appellant's control. Issue 3: Exclusion from Section 269SS The CIT(A) concluded that the transactions did not aim to evade tax, and the penalties under Sections 271D and 271E were not justified. The Tribunal concurred, noting the genuine nature of the transactions and the confirmation obtained. The Court found no infirmity in the orders, as the transactions had a reasonable cause, and were not for tax evasion purposes. Issue 4: Consideration of Past Judgments The Court considered past judgments by the Punjab & Haryana High Court, such as in the cases of M/s Charan Dass Ashok Kumar and Auto Piston Mfg. CO. The Court differentiated the present case, where a reasonable cause was established, from those cases where penalties were upheld due to lack of reasonable explanations. Each case was decided based on its unique facts, and the Court found no advantage for the appellant in those past judgments. In conclusion, the Court dismissed the appeal as no substantial question of law arose, affirming the decisions of the CIT(A) and Tribunal regarding the penalty under Section 271D, application of Section 273B, exclusion from Section 269SS, and consideration of past judgments by the Punjab & Haryana High Court.
|
