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TMI Blog2023 (7) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... Construction [ 2014 (7) TMI 137 - GUJARAT HIGH COURT] held that no penalty is leviable u/s. 271D for cash loans exceeding Rs. 20,000/- from agriculturists living in remote areas when transaction were not doubted. Decided in favour of assessee. - ITA No. 195/Ahd/2022 - - - Dated:- 17-5-2023 - SMT. ANNAPURNA GUPTA, ACCOUNTANT MEMBER AND SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER For the Assessee : Shri Hirak Shah, Advocate For the Revenue : Shri Rakesh Jha, Sr. D.R. ORDER PER : T.R. SENTHIL KUMAR, JUDICIAL MEMBER:- This appeal is filed by the Assessee as against the Appellate order dated 25.03.2022 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as NFAC ), confirming the levy of penalty under section 271D of the Income Tax Act, 1961 (hereinafter referred to as the Act ) relating to the Assessment Year (A.Y) 2017-18. 2. The brief facts of the case is that the assessee is an individual and engaged in the business of repairing of gold/silver ornaments. For the Assessment Year 2017-18, the assessee filed its Return of Income on 29.03.2018 declaring total income of Rs. 4,82,280/-. The as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evy of penalty u/s. 271D of the Act of Rs. 7,93,000/-. 5. Aggrieved against the same, the assessee is in appeal before us raising elaborate grounds of appeal, which are argumentative in nature. However the solitary issue is violating the provisions of Section 269SS of the Act and thereby levy of penalty, which is liable to be deleted on reasonable cause as demonstrated by the assessee. 5.1. Ld. Counsel reiterated the Grounds of Appeal and relied upon judgment of the Jurisdictional High Court in the case of CIT vs. Maa Khodiyar Construction reported in [2014] 45 taxmann.com 566 (Gujarat), Judgment of High Court of Jharkhand in the case of OMEC Engineers vs. CIT reported in [2018] 169 taxmann.com 158 (Jharkhand) and Jodhpur Bench of the Tribunal decision in the case of ITO vs. Prabhulal Sahu reported in [2006] 99 TTJ 177. Thus the Ld. Counsel for the assessee pleaded to delete the penalty levied u/s. 271D of the Act. 6. Per contra, the Ld. Sr. D.R. appearing for the Revenue supported the concurrent findings of the lower authorities and requested to uphold the same and thereby dismiss the assessee s appeal. 7. We have given our thoughtful consideration and pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s much as that levy of penalty is discretionary and not automatic. The said conclusion is further justified by Section 273B of the Act. A careful reading of Section 273B encompasses that certain penalties shall not be imposed in cases where reasonable cause is successfully pleaded. It is seen that penalty imposable under Section 271D is also included one among the exclusions. By the said provisions, the Parliament has unambiguously made it clear that no penalty shall be imposed, if the assessee proves that there was a reasonable cause for the said failure . As noticed, if the statutory provision shows that the word shall has been used in Section 271D, then the imposition of penalty would have been mandatory. Section 273B as noted further throws light on the legislative intent, as it specifically provides that no penalty shall be imposed, if the assessee proves that there was reasonable cause for the said failure . 8. Further the Jurisdictional High Court in the case of Maa Khodiyar Construction (cited supra) held that no penalty is leviable u/s. 271D for cash loans exceeding Rs. 20,000/- from agriculturists living in remote areas when transaction were not doubted. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of loan to the assessee had been reflected in the books of account of those persons from whom the loan had been received. The identity of those persons has also been well established. The assessee also had given satisfactory reason for taking such loan. His bona fide belief that such transactions would not attract provision of Section 269SS on the ground that they were agriculturists and lived in remote villages also was one of the grounds which has weighed with both the authorities. 14. In view of forgoing discussion, we are of the opinion that no error has been committed by both the authorities below in deleting the penalty. It is true that the respondent has income from other business and these transactions were not between agriculturists having only agriculture income, not liable to tax which have been exempted from such rigor of law and yet, the cause advanced is when found to be sufficiently reasonable, no interference would be desirable. 8.1. The Hon ble Jharkhand High Court in the case of OMEC Engineers (cited supra) interpreted the expression sufficient cause in the context of levy of penalty and deleted the same as follows: 22. The words 'reasonabl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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