1999 (2) TMI 106 - AT - Income Tax

Summary

Issues:
Violation of provisions of s. 269SS and liability for penalty under s. 271D for asst. yr. 1993-94.

Detailed Analysis:

Issue 1: Violation of provisions of s. 269SS and liability for penalty under s. 271D
The AO found that the assessee violated the provisions of s. 269SS by accepting cash amounts exceeding Rs. 20,000 without producing the parties involved. The AO imposed a penalty of Rs. 1,38,000, which was upheld by the CIT(A). The assessee contended that the cash deposits were due to urgent need for funds to purchase a tractor on an auspicious day. The Tribunal noted that the loans were accepted in cash without evidence for a joint venture. The Tribunal acknowledged the urgency but found no reasonable cause for one of the cash deposits. Citing the Hindustan Steel Ltd. case, the Tribunal emphasized that penalties should not be imposed for technical or venial breaches. The Tribunal held that penalties could not be imposed for the first two transactions due to reasonable cause, but upheld the penalty for the third transaction. The AO was directed to recompute the penalty only for the third amount of Rs. 40,000.

Conclusion:
The appeal was partly allowed, with penalties upheld for one transaction while penalties for the other two transactions were set aside due to reasonable cause.