9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2025 (3) TMI 140 - AT - Income TaxPenalty u/s 271DA - assessee has violated the provisions of Section 269ST - AO is of the view that since the assessee has received sale consideration over and above Rs. 2 lakhs in cash from the purchasers - HELD THAT - The assessee was also under bona fide belief in view of the language of section 269ST which uses the expression single transaction and thus at any given point of time the assessee has recorded transaction of Rs. 2 lakhs alone which was entered into provisions of section 269ST were introduced to prevent unaccounted income and black money. Assessee was under bona fide belief that cash could be accepted at any point of time not exceeding Rs. 2 lakhs and that is how cash was accepted at any given point of time within this limit of Rs. 2 lakhs. It was quite plausible to entertain this belief in view of language of section 269ST which refers to single transaction and whereas section 40A(3) 269SS 269T used the expression aggregate . Even at one place section 269ST too uses the expression aggregate . Section 269ST was the new provision and this was the first year and therefore to entertain this belief was not something which was impossible. There is no allegation by the Assessing Officer that the unaccounted income and black money was introduced by the assessee in the form of cash sales. Assessee duly accounted for cash receipts particulars of farmers are kept proving their identity aadhar land revenue record and agricultural land holding of all the farmers Form 60 etc. and all the statements in this regard were duly and regularly filed by the assessee. In such circumstances it cannot be said that there is any intention to evade tax. As held in the case of Hindustan Steel Ltd. Vs. State of Orissa 1969 (8) TMI 31 - SUPREME COURT penalty is quasi criminal in character and therefore it should not be imposed for technical or venial breach. We hold that the assessee had bona fide reasons to receive cash over and above Rs. 2 lakhs and the assessee has reasonable cause in accepting cash over and above Rs. 2 lakhs from the farmers against sale of tractors. Penalty cannot be levied for the technical and venial breach. Therefore we direct the AO to delete the penalty levied u/s 271DA of the Act. Decided in favour of assessee,
1. ISSUES PRESENTED and CONSIDERED
The core legal issues addressed in the judgment include:
2. ISSUE-WISE DETAILED ANALYSIS Relevant Legal Framework and Precedents Section 269ST of the Income Tax Act restricts cash transactions exceeding two lakh rupees in aggregate from a person in a day, in respect of a single transaction, or in respect of transactions relating to one event or occasion from a person. Section 271DA imposes penalties for contraventions of Section 269ST. The provisions aim to curb black money and unaccounted cash transactions. The legal precedents cited include cases like Hindustan Steel Ltd. v. State of Orissa, which emphasize that penalties should not be imposed for technical or venial breaches. Court's Interpretation and Reasoning The Tribunal considered whether the penalty was justified given the assessee's claim of bona fide belief and reasonable cause. The Tribunal noted that the object of Section 269ST is to prevent black money circulation, and in this case, there was no allegation of tax evasion. The Tribunal also considered the bona fide belief of the assessee regarding the interpretation of "single transaction" and "aggregate" in Section 269ST. Key Evidence and Findings The Tribunal examined the details of cash transactions provided by the assessee, which included comprehensive identification of purchasers and proper accounting of sales. The transactions were genuine, and the assessee had maintained records of the farmers' identities and the sales transactions. Application of Law to Facts The Tribunal applied the principles established in prior cases, emphasizing that penalties should not be imposed for technical breaches when the transactions are genuine and duly accounted for. The Tribunal found that the assessee's interpretation of Section 269ST was plausible, given the newness of the provision and the context of the transactions. Treatment of Competing Arguments The Tribunal considered the Revenue's argument that the assessee violated Section 269ST by accepting cash exceeding the prescribed limit. However, it found merit in the assessee's argument of bona fide belief and reasonable cause, given the nature of the transactions and the lack of any tax evasion intent. Conclusions The Tribunal concluded that the penalty under Section 271DA was not justified due to the bona fide belief and reasonable cause demonstrated by the assessee. The Tribunal directed the deletion of the penalty. 3. SIGNIFICANT HOLDINGS Preserve Verbatim Quotes of Crucial Legal Reasoning "The assessee was also under bona fide belief in view of the language of section 269ST which uses the expression 'single transaction' and thus, at any given point of time the assessee has recorded transaction of Rs. 2 lakhs alone which was entered into provisions of section 269ST were introduced to prevent unaccounted income and black money." Core Principles Established The Tribunal emphasized that penalties should not be imposed for technical or venial breaches, especially when the transactions are genuine and there is no intention of tax evasion. The interpretation of new provisions should consider the context and the bona fide belief of the taxpayer. Final Determinations on Each Issue The Tribunal determined that the penalty under Section 271DA should be deleted due to the reasonable cause and bona fide belief demonstrated by the assessee. The Tribunal's decision applied to both assessment years under consideration.
|
