2017 (12) TMI 1473 - AT - Income Tax

Penalty levied u/s 271E - assessee repaid loan in cash in aggregating was exceeding ₹ 20,000/-, the assessee contravened the provisions of Section 269T - Held that - It is not clear as to how and from where the Jt. CIT has pickedup the date of 20/02/2010 on which the reported repayment of loan in violation of section 269T of the Act has taken place. The lady Smt. Pratixaben A. Joshi who is the wife of the appellant has filed an affidavit that the money in question was received by her from her father-in-law and the same was given to the appellant/husband for the on-going construction of the house. Though an affidavit which was filed by the Pratixaben A. Joshi is not on record but statement of ld. AR has been noted that this fact is correct. Clearly, the transaction between a wife and a husband who was staying together under the same roof is eligible for relaxation from the purview of repayment of loan etc. as provided in section 273B of the Act. Ld. Jt. CIT has not given any source of loan from where this so called loan was taken. Therefore, in our considered opinion this is not a fit case, where penalty should be levied - Decided in favour of assessee

Summary

Issues Involved:
- Appeal by revenue against order of Commissioner of Income Tax (Appeals) for AY 2010-11
- Deletion of penalty u/s.271D of the Act
- Maintainability of appeal based on tax effect
- Appeal by revenue against deletion of penalty u/s.271E of the Act
- Repayment of short term loans exceeding limit
- Assessment of penalty u/s.271E
- Appeal filed by assessee against penalty order
- Examination of source of cash deposits
- Validity of penalty imposition
- Dismissal of Cross Objections

Analysis:

1. The judgment involves two appeals by the revenue and two Cross Objections by the assessee against the order of the Commissioner of Income Tax (Appeals) for AY 2010-11. The first appeal (ITA No. 2988/Ahd/2017) concerns the deletion of penalty levied u/s.271D of the Act. The Tribunal found that the tax effect was below the prescribed limit of ?10 lakhs as per CBDT Circular No. 21/2015, making the appeal not maintainable and dismissed it.

2. The second appeal (ITA No. 2989/Ahd/2014) by the revenue was against the deletion of penalty u/s.271E of the Act. The case involved the assessee repaying short term loans exceeding the permissible limit in cash. The Assessing Officer imposed a penalty, which was challenged by the assessee before the CIT(A) and subsequently before the Tribunal. The Tribunal noted discrepancies in the assessment, including the source of cash deposits, and concluded that the penalty imposition was not justified, ultimately dismissing the appeal by the revenue.

3. The Tribunal examined the details of cash repayments made by the assessee, the provisions of Section 269T regarding permissible cash payments, and the explanations provided by the assessee regarding the nature of the transactions. The Tribunal found that the penalty under Section 271E was not warranted in the given circumstances, especially considering the source of funds and the relationship between the parties involved.

4. Furthermore, the Tribunal addressed the Cross Objections filed by the assessee, which were dismissed as not pressed. The judgment highlighted the details of the transactions, the assessment of penalties, and the legal provisions governing such cases. Ultimately, both appeals by the revenue and the Cross Objections were dismissed based on the findings and analysis presented in the judgment.

5. The detailed analysis of the issues involved in the judgment showcases the application of relevant legal provisions, examination of facts, and the reasoning behind the decisions made by the Tribunal. The judgment provides a comprehensive overview of the penalty imposition, maintainability of appeals, and the considerations taken into account while adjudicating the matter.