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TMI Blog2016 (3) TMI 1106X X X X Extracts X X X X X X X X Extracts X X X X ..... on–compliance to the relevant provision, then penalty cannot be imposed. In other words, in a given case, if assessee shows reasonable cause for the failure, Assessing Officer is empowered under the Act to refrain from imposing penalty. In the present case after considering the explanation of the assessee in the context of facts and material on record, we are of the firm view that the assessee has proved that there was reasonable cause for accepting the cash loans. Further, the authority concerned, while imposing the penalty has not established that the transaction relating to acceptance of cash loan is either non–genuine or not bonafide. On careful analysis of the decision cited by the learned Authorised Representative, it is found that ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ies Pvt. Ltd. Rs. 7,25,000 M/s. Oceanview Estates Pvt. Ltd. Rs. 2,50,000 M/s. Shanti Snehari Realities Pvt. Ltd. Rs. 2,00,000 Total:- Rs. 17,25,000 3. The Assessing Officer, therefore, called upon the assessee to show cause as to why the loan amount received in cash in violation of section 269SS should not be added back to her income. In response to the notice, the assessee, though, explained the reason for receiving the said loans in cash but the Assessing Officer was not convinced. He observed that the assessee had not filed confirmation letter from the concerned persons from whom she claimed to have received the cash loan. Alleging that the assessee has failed to substantiate the genuineness of the cash loans, the Assessing O ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the documents were urgently required to be registered on 8th January 2008, there was no option but to avail cash loan of ₹ 17.25 lakh from the four companies and transfer it to M/s. Cornetstene Estate Developers Pvt. Ltd. for the purpose of payment of stamp duty on 8th January 2008, so that documents could be registered. It was submitted, the pay orders purchased for payment of stamp duties were ultimately cancelled on 9th January 2008. Thus, it was submitted as there was reasonable cause for accepting cash loan, no penalty can be imposed. The Addl. CIT, however, was not convinced with the explanation of the assessee. He opined that as the assessee has violated the provisions of section 269SS by accepting cash loans, he is liable to b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed, the first appellate authority was not justified in deleting the penalty. 7. Learned A.R., on the other hand, reiterating the stand taken before the Departmental Authorities submitted, if at all there is any violation of provisions of section 269SS, it is for bona-fide reasons and as there is a reasonable cause for accepting the cash loan, penalty cannot be imposed under section 271D merely for a technical breach. Learned A.R. submitted, even otherwise also, imposition of penalty under section 271D is not valid as the Assessing Officer while completing the assessment has treated the cash loan as income of the assessee under section 68 of the Act. Therefore, once the amount in question is treated as income, it cannot again be treated as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is further evident, when the proceeding for imposition of penalty under section 271D, was initiated and the penalty order was passed under the said provision assessee's appeal against the addition made under section 68 of the Act was still pending before the learned Commissioner (Appeals) as he disposed off assessee's appeal deleting the addition made under section 68 of the Act only on 11th February 2013. Thus, before the disposal of appeal, the addition made by the Assessing Officer stood and as per which the amount of ₹ 17,25,000 was income of the assessee. Thus, under no circumstances, proceeding for imposition of penalty under section 271D, could have been initiated when the amount in question was held as income of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 271D. If the assessee proves that there was reasonable cause for non-compliance to the relevant provision, then penalty cannot be imposed. In other words, in a given case, if assessee shows reasonable cause for the failure, Assessing Officer is empowered under the Act to refrain from imposing penalty. In the present case after considering the explanation of the assessee in the context of facts and material on record, we are of the firm view that the assessee has proved that there was reasonable cause for accepting the cash loans. Further, the authority concerned, while imposing the penalty has not established that the transaction relating to acceptance of cash loan is either non-genuine or not bonafide. On careful analysis of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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