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TMI Blog2015 (4) TMI 144X X X X Extracts X X X X X X X X Extracts X X X X ..... aking into consideration that :- (a) that the transaction of receipt of funds is genuine and there stands no tax evasion even if the transaction is made in cash. (b) that there is only technical and venial breach of law for a bonafide transaction. (c) that the appellant was under bonafide belief that the transaction below Rs. 20,000/- in cash is not against the law. (d) that there is transfer of funds between sister concern for business exigency, which cannot be construed as loan or deposit. (e) that the assessee has taken funds due to business exigency. (f) that the penalty was levied on the basis of surmises and conjecture only without referring to facts of the matter.'' 2.1 The brief facts of the case are that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n Rs. 20,000/-. (iv) The amounts were transacted between sister concern due to business exigencies. (iv) The alleged violation amounted to technical and venial breach of regulatory provision which should not be held liable for penalty in the given facts and circumstances. The AO was however, not satisfied with the explanation and imposed the penalty u/s 271D of the Act holding that the assessee had no reasonable cause. The explanation was based on a bald statement that the husband was managing the affairs of assessee's business. 2.2 Aggrieved, the assessee preferred first appeal where assessee reiterated its explanation and relied on the following case laws. (i) Muthoot M George Bankers vs. ACIT (1993) 46 ITD 10 (Cochin). (ii) Jag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the transaction is attributed or proved by the lower authorities and assessee's factual explanation has been rejected without cogent reasons. 3.1 Reliance is placed by the Hon'ble Jurisdictional High Court in the case of CIT v. Raj Kumar Sharma [2007] 294 ITR 131 (Raj.) where the Hon'ble High Court rejected the contention of Revenue and deleted penalty u/s 271D after observing as under:- ''We are not persuaded by the submission of counsel for the Revenue. Section 271D of the Income Tax Act provides for penalty failure to comply with the provisions of Section 269SS of the Income-tax Act. According to this provision, if a person, inter alia, accepts any loan in contravention of the provisions of Section 269SS of the Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal cannot be said to be grossly perverse or unsustainable in law. In our considered view, the appeal does not give rise to any substantial question of law. It is dismissed in limine.'' 3.2 Further reliance is placed in the case of CIT vs. Saini Medical Store, 277 ITR 420 (P&H) where Hon'ble High Court in the nearly similar facts and circumstances and relying on Hon'ble Supreme Court judgement in the case of Hindustan Steel Ltd. vs. State of Orissa (supra) deleted the penalty after following observations. "6.2 As pointed out earlier, there is no doubt about the genuineness of the transactions which have been fully accepted in the assessment made for the year under consideration. Even if, there is any ignorance, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mpilation of accounts and which has no tax effect, in our view establishes ''reasonable cause'' u/s 273B of the Act. Since the respondent - assessee had satisfactorily established ''reasonable cause'' u 273B of the Act he must be deemed to have established sufficient cause for not invoking the penal provisions (Section 271D and 271E of the Act) against him. For the reasons recorded hereinabove, we find no merit in either of the aforesaid two appeals i.e., ITA Nos. 777 and 778 of 2008 and accordingly, the said appeals are hereby dismissed.'' 3.4 The ld. Counsel for the assessee thus contends that the facts of the case clearly demonstrate that the assessee being a lady, carried out her business. The f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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