2001 (4) TMI 176 - AT - Income Tax

Summary

Issues Involved:
1. Condonation of delay in filing the appeal.
2. Imposition of penalty under Section 271D for violation of Section 269SS.
3. Consideration of the KVSS certificate issued by the designated authority.

Detailed Analysis:

1. Condonation of Delay:
The assessee filed the appeal 18 days late, citing medical reasons (CADC hypertension CPNP) for the delay. Despite the appeal memo being signed during the advised bed rest period, the Tribunal condoned the delay considering the minor duration and in the interest of justice. The Departmental Representative did not object, leading to the appeal's admission.

2. Imposition of Penalty under Section 271D:
The main issue was whether the assessee violated Section 269SS by accepting a cash loan of Rs. 1 lakh from his son, leading to a penalty under Section 271D. The assessee contended that no loan was taken; instead, Rs. 2 lakhs were withdrawn from a joint bank account with his son and deposited with Golden Forests (India) Ltd. (GFIL). The income from this deposit was shown separately in their respective returns, and the genuineness of the transaction was not doubted by the Assessing Officer (AO).

The Tribunal analyzed that:
- The assessee and his son had a joint bank account, and the Rs. 2 lakhs deposit was from their respective contributions.
- The income from the deposit was assessed separately in their hands, indicating no intention to treat it as a loan.
- The Department failed to prove that the Rs. 1 lakh was a loan.
- The penalty under Section 271D should not be imposed for a technical default when the transaction's genuineness is accepted.

Citing various judgments, including Hindustan Steel Ltd. vs. State of Orissa, the Tribunal emphasized that penalties should not be imposed for technical or venial breaches and should be exercised judicially considering all circumstances.

3. Consideration of the KVSS Certificate:
The assessee argued that the KVSS (Kar Vivad Samadhan Scheme) certificate provided immunity from penalties and prosecution. However, since the main grounds were allowed, the Tribunal did not find it necessary to discuss this alternative plea.

Conclusion:
The Tribunal concluded that the CIT(A) was not justified in confirming the penalty imposed under Section 271D, thus canceling the penalty. The appeal of the assessee was allowed, and the grounds relating to the penalty issue were upheld.