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TMI Blog2023 (4) TMI 622X X X X Extracts X X X X X X X X Extracts X X X X ..... tled the dispute with the unauthorized occupant by selling the property to them to avoid any further litigations as the assessee has been staying in Mangalore and also a retired person, having not much strength to fight with unauthorized occupant of the assessee s plot and the assessee pleaded that this is the reasonable cause for accepting an amount of Rs.15.70 lakhs by cash. As per section 273B of the Act, no penalty would be leviable if the person concerned proves that there is reasonable cause or said failure clearly indicates the bonafideness of the assessee, then it gives a discretion to the authority to impose the penalty or not to impose penalty. Such discretion has to be exercised in a just and fair manner having regard to the entire facts and material existing on record. Ordinarily, a plea has to be ignorance of law cannot support the breach of a statutory provision. Such technical breach due to ignorance of the relevant provision of law on account of bonafide belief coupled with the fact that the transaction in question is genuine and bonafide transaction are undertaken during the regular course of its business will not result in levy of penalty u/ 271D of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e u/s 271-D of the Act-and the National Faceless Assessment Center has not established that the appellant committed any such default actionable u/s.271D of the Act, deliberately and consequently, the impugned penalty order passed for the venial and assumed technical breach deserves to be cancelled having regard to the ratio of the decision of the Hon'ble Supreme Court in the case of HINDUSTAN STEEL LIMITED V. STATE OF ORISSA reported in 83 ITR 26 [SC]. 5. Without prejudice to the above, the authorities below failed to appreciate that the appellant bonafidely believed that such acceptance of cash was not in violation of law, which bonafide beliefs is also accepted by the decisions of the Hon'ble Rajasthan High Court in the case of CIT V. LOKPAT FILM EXCHANGE [CINEMA] reported in 304 ITR 172 [Raj] and also the decision of the Hon'ble ITAT, Ahmadabad Bench, in the case of ITO V. UNIVERSAL ASSOCIATES reported in TIOL-498/ITAT-AHM and consequently, the penalty levied u/s.271D of the Act, for the alleged violation u/s.269SS of the Act, requires to be cancelled having regard to the ratio of the decision of the Hon'ble Supreme Court in the case of VEGETABLE PRODUCTS re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 14.12.2020, which reads as follows: ........................During the registration they gave me DD amounting to Rs.3,50,0007/- and loose case of Rs. 75,70,000/- and I could not cancel the sale deed and I have no option but to receive the cash. The above cash was deposited to Canara Bank, K. R. Puram, Branch Bangalore by my wife to my bank account in Canara Bank, Kuntikana and Shivabagh Branch.......,........... For the sake of natural justice, another show cause notice u/s 271D of the Act vide dated 27.05.2021 was issued to the assessee as to why an order imposing a penalty should not be made under section 271D of the Income Tax Act, 1961. In response to the same, the assessee has furnished his reply vide letter dated 16.09.2021 and submitted as under: ........I wish to state that, it was learn that my matter was settled by the Commissioner of Income Tax (Audit, Bangaluru. Further I request your good office to kindly refer my matter with the jurisdictional Addl. CIT, Mangalore regarding settlement letter issued by the CIT (Audit), Bengaluru. Hence I request your good off to kindly drop the penalty proceedings initiated u/s 271D of the Income Tax Act, 1961., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regard to violation of section 269SS of the Act for receiving an amount of Rs.15.70 lakhs in cash and penalty u/s 271D of the Act levied to the equal amount of cash received by assessee at Rs.15.70 lakhs. The assessee in this case has no intention to evade the tax and it has truly disclosed all the details for the purpose of assessment and there was no loss to the Government exchequer. Due to compulsion, assessee received an amount of Rs.15.70 lakhs in cash. As decided by the Tribunal in the case of Akash Education Development Trust Vs. ADIT in ITA No.737/Bang/2021 dated 18.4.2022 wherein it was held that it is not a deliberate and intentional violation of the provisions of section 269SS of the Act. Penalty like 271D of the Act will not be imposed unless the party concerned has acted deliberately in defiance of law or was guilty of contumacious or dishonest conduct or acted in conscious disregard of its obligation and penalty will not be imposed merely because it is lawful to do so. Imposition of penalty for failure to perform statutory obligation is only a discretionary power of the authority exercising judicial functions in consideration of all the relevant circumstances. If ..... X X X X Extracts X X X X X X X X Extracts X X X X
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