2023 (9) TMI 432 - AT - Income Tax

Penalty u/s. 271E - violation of the provisions of Section 269T- Repayment of monthly instalment in cash to Tata Finance Corporation - HELD THAT - We are of the considered view that even if the financers, on account of the poor track record of the assessee, were not ready and willing to receive the monthly installments towards repayment of loans from her through cheques, then she could have safely made the said repayments by way of account payee bank drafts or electronic clearing system through her bank account or any other prescribed electronic mode as provided in Rule 6ABBA of the I.T. Rules, 1962. We are unable to persuade ourselves to subscribe to the explanation of the assessee that as the financers were not ready to receive the repayment of loans from her vide account payee cheques, therefore, for the said reason, she was compelled to make the said payments in cash. We do not find any substance in the assessee's claim that she was unaware of the provisions of section 269T of the Act. It is a matter of fact borne from the record that the assessee was availing the services of a Chartered Accountant and had got her accounts for the year under consideration audited from him. Assessee cannot be allowed to plead ignorance of the law, we are even otherwise of the considered view that there is no substance and merit in the claim of the assessee that she was oblivion of the modes and manner for repayment of loans as prescribed u/s 269T. Apropos the support drawn by the assessee from the fact that a similar penalty that was imposed in the case of her nephew, viz Shri Ajay Gill, had been vacated by the CIT(A), NFAC, we are of a firm conviction that as the facts involved in every case stand on their independent footing, therefore, her claim above would be of no assistance. We are of the considered view that as the assessee had not only failed to comply with the provisions of section 269T of the Act, which therein had rendered her liable for imposition of penalty u/s. 271E but had also failed to come forth with any reasonable cause which had prevented her from making repayment of the monthly installments of her outstanding loans in a manner prescribed under the law, therefore, finding no infirmity in the imposition of penalty u/s 271E by the JCIT, we uphold the same. - Decided against assessee.

Summary

Issues involved:
The judgment involves the imposition of penalties under section 271E of the Income Tax Act, 1961 for repayment of loans in cash, contravening the provisions of section 269T of the Act for the assessment years 2012-13, 2013-14, and 2015-16.

Assessment Year 2012-13:
The assessee challenged the penalty imposed by the JCIT for repayment of loans in cash, arguing that the financer insisted on cash payments and claiming ignorance of the law. The JCIT upheld the penalty, stating the assessee could have used alternative payment methods. The CIT(A) dismissed the appeal. The Tribunal upheld the penalty, noting the assessee's failure to comply with section 269T and lack of reasonable cause for non-compliance.

Assessment Years 2013-14 & 2015-16:
The penalties imposed by the JCIT for the assessment years 2013-14 and 2015-16 were also challenged by the assessee. The Tribunal upheld the penalties, finding no infirmity in the imposition of penalties under section 271E of the Act. The penalties of Rs. 15,82,407/- and Rs. 22,96,476/- for the respective years were upheld based on similar grounds as in the assessment year 2012-13.

In conclusion, the Tribunal dismissed all appeals of the assessee for the assessment years 2012-13, 2013-14, and 2015-16, upholding the penalties imposed by the JCIT under section 271E of the Income Tax Act, 1961.