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TMI Blog2014 (11) TMI 227X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee, thought it fit to set aside the entire penalty by accepting the explanation given by the assessee. - taking of loan is found to be genuine and the same is for business exigency, it is not a case of undisclosed income - If the assessee had not given a reasonable cause, then certainly the initiation of proceedings for violation of 269SS and 269T would be justified. The reasonable cause for not levying penalty exists and the Tribunal was justified in allowing the assesse's appeal - the Tribunal has clearly held in the quantum appeal there was a bona fide on the part of the assessee and as a consequence finding reasonable cause, thought it fit to delete the entire penalty - The assessee has shown the receipt of cash and repaymen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e or draft in contravention of Section 269T? 2. In the above Tax Case (Appeals), the Revenue has challenged the orders of the Tribunal relating to the levy of penalty under Sections 271D and 271E of the Income Tax Act. However, the Revenue has not challenged the order of the Tribunal with regard to the quantum appeal decided in favour of the respondent/assessee. 3. The assessment in these cases relates to the assessment year 2006-07. The respondent/assessee is engaged in the business of civil construction. The assessee had filed return of income for the assessment year 2006-07, in which the assessee had debited various expenses like, payment of accounting charges, etc. According to the Assessing Officer, the assessee had to deduct t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore this Court. 6. The Tribunal decided the quantum appeal in I.T.A.No.1284/Mds/2010 holding that the payment made towards accounting charges to the site accountants was wrongly disallowed under Section 40a(ia) of the Income Tax Act and it was not covered under Section 194J of the Income Tax Act. The Tribunal held that the explanation of the assessee that Section 40a(ia) of the Income Tax Act was introduced during the assessment year in question and the assesse's plea of bona fide mistake and impression that it will apply only for the next assessment year was accepted primarily on the ground that the assessee has admitted this amount as income and paid tax thereon and there is no loss to the Revenue and further more, the confusion in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ision is taken on the correctness or otherwise of the deposition made in the affidavit. Placing reliance on the decision reported in the case of Mehta Parikh Co., reported in 30 ITR 181, the Tribunal decided the quantum appeal in favour of the assessee. Against which, the Revenue has not chosen to file any appeal. 8. The Tribunal also allowed the appeals filed by the assessee with regard to the penalty levied under Section 271D and 271E of the Income Tax Act. I.T.A.No.1285/Mds/2010 relates to repayment of loan taken from friends in cash in contravention of Section 269T of the Income Tax Act; hence, suffering consequent penalty under Section 271E of the Income Tax Act. I.T.A.No.1286/Mds/2010 relates to receiving of loan in cash in cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the cases of CIT vs Standard Brands Ltd, 285 ITR 295 and Diwan Enterprises vs CIT, 246 ITR 571, has held that where the assessee had claimed to have received loans in cash exceeding the prescribed limit of ₹ 20,000/- but Revenue has treated the receipt as undisclosed income of the assessee, initiation of proceedings u/s 269SS r.w.s. 271D was not valid . The ratio laid down by the Hon'ble Delhi High Court in the above case, mutatis mutandis, squarely applies to the facts of this case. Moreover, any penalty provision in the Act admits reasonable excuse which are sufficient to explain the failures so committed. When the business of the assessee is such that he has to make payment in cash and has to make cash purchases, it is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . If the assessee had not given a reasonable cause, then certainly the initiation of proceedings for violation of 269SS and 269T would be justified. We find in the present case the reasonable cause for not levying penalty exists and the Tribunal was justified in allowing the assesse's appeal. On facts, the Tribunal has clearly held in the quantum appeal there was a bona fide on the part of the assessee and as a consequence finding reasonable cause, thought it fit to delete the entire penalty. 11. We find no ground to interfere with the order of the Tribunal. The assessee has shown the receipt of cash and repayment of the same due to business exigency and that would amount to reasonable cause. The genuineness of the transaction to mee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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