9911796707
TMI Blog2025 (4) TMI 1570X X X X Extracts X X X X X X X X Extracts X X X X ..... ") for the assessment year 2015-16 was completed on 26-12-2017, however, in the assessment proceeding, the Assessing Officer held that the assessee has made repayment of loan to M/s. Tata Finance Corporation in that financial year to the extent of Rs. 22,96,476/- in cash against the loan taken for commercial vehicle and accordingly proceeded to initiate penalty proceeding under Section 271E of the Act on the ground that repayment of loan to the extent of more than twenty thousand rupees by the assessee is in violation of provisions contained in Section 269T of the Act, which the assessee replied on 27-12-2018 stating that due to failure on her part to pay installments in time, the financer by letter dated 5-11-2012 insisted upon her to make cash payment, which the assessee also, in turn, filed copy of the financer's letter issued by M/s. Tata Finance Corporation, however, the Assessing Officer did not accept the explanation of the assessee and order imposing penalty under Section 271E of the Act was passed on 28-12-2018. 4. Feeling aggrieved and dissatisfied with the order of penalty under Section 271E of the Act for non-compliance of Section 269T of the Act, the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ously and the two appellate authorities also concurrently did not notice the illegality committed by the assessing authority and affirmed the order imposing penalty mechanically rendering the order illegal and liable to be set aside. 6. Mr. Ajay Kumrani, learned counsel appearing for the respondent/Revenue, would support the impugned order and submit that the finding recorded by the three authorities that there is complete non-compliance of Section 269T of the Act inviting the provisions contained in Section 271E of the Act is the correct finding of fact based on the evidence available on record which is neither perverse nor contrary to the record and as such, the appeal deserves to be dismissed. 7. We have heard learned counsel for the parties and considered their rival submissions made herein-above and also gone through the record with utmost circumspection. 8. Admittedly and undisputedly, assessment under Section 143 (3) read with Section 147 of the Act for the assessment year 2015-16 was completed and the transaction entered into by the appellant was accepted as genuine transaction duly reflected in the books of account, return of income of the assessee for the assessment ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bt that repayment of deposit in the manner prescribed under Section 269T is mandatory. Thus, it is mandatory under Section 269T of the Act for the persons specified therein to repay any loan/deposit together with interest, if any, exceeding the limits prescribed therein, by account payee cheque/bank draft. 11. Consequence of non-compliance of mandatory provision contained in Section 269T of the Act is provided in Section 271E of the Act, which states as under: - "271E. Penalty for failure to comply with the provisions of section 269T.-(1) If a person repays any loan or deposit or specified advance referred to in section 269T otherwise than in accordance with the provisions of that section, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit or specified advance so repaid. (2) Any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner." 12. The aforesaid provision, Section 271E of the Act, included in Chapter XXI of the Act, deals with penalties imposable for failure to comply with the provisions of Section 269T of the Act and it speaks of levy of penalty equal to the amount of the deposit so repaid in cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ice Section 273B of the Act. It is a provision which contemplates certain exigencies in which though the assessee is liable to suffer penalty, but penalty is not to be imposed in certain cases. Section 273B of the Act also includes Section 271E of the Act and, as such, imposition of penalty under Section 271E of the Act for non-compliance of Section 269T is subject to the provisions contained in Section 273B of the Act and no penalty shall be imposable on the person or the assessee under Section 271E of the Act, as the case may be, for any failure referred to in the said provisions if assesse proves that there was reasonable cause for the said failure. Section 273B of the Act provides as under: - "273B. Penalty not to be imposed in certain cases.- Notwithstanding anything contained in the provisions of clause (b) of sub-section (1) of section 271, section 271A, section 271AA, section 271B, section 271BA, section 271BB, section 271C, section 271CA, section 271D, section 271E, section 271F, section 271FA, section 271FAB, section 271FB, section 271G, section 271GA, section 271GB, section 271H, section 271-I, section 271J, clause (c) or clause (d) of sub-section (1) or sub-section (2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ke a loan otherwise than by account payee cheque or account payee demand draft, then the penalty may not be levied. Therefore, undue hardship is very much mitigated by the inclusion of section 273B. If there was a genuine and bona fide transaction and if for any reason the taxpayer could not get a loan or deposit by account payee cheque or demand draft for some bona fide reasons, the authority vested with the power to impose penalty has got discretionary power." 17. Therefore, a combined reading of the provisions contained in Section 271E of the Act [which provides penalty for failure to comply with the provisions of Section 269T] and Section 273B of the Act makes it abundantly clear that if the assessee shows reasonable cause for the failure to comply with any provision referred thereto, the penalty for its violation of Section 269T of the Act shall not be imposable on the assessee. The word 'reasonable cause' has not been defined in the Act of 1961. Therefore, in the context of the penalty provisions, the words 'reasonable cause' would mean a cause which is beyond the control of the assessee. 'Reasonable cause' obviously means a cause which prevents a rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) and none of the authorities have recorded finding that the same was not genuine and not a bona fide transaction. There is no finding of the two appellate authorities that the transaction in breach of the aforesaid provisions made by the assessee was a mala fide transaction with an object to evade the tax and aimed to avoid any tax liability. As stated earlier, all the three authorities viz., the Assessing Officer, the CIT (Appeals) and the ITAT have proceeded on the basis that breach of provisions contained in Section 269SS of the Act shall lead automatically to penal provisions contained in Section 271E of the Act and completely ignored the provisions contained in Section 273B of the Act which requires that on proof of reasonable cause, the penalty imposable under Section 271E (1) would not be imposable and further ignored the fact that the imposition of penalty merely on technical mistake committed by the assessee, which has not resulted in any loss of revenue, would not be sustainable. 21. However, it has been noticed by the CIT (Appeals) that as per letter dated 5-11-2012 issued by M/s. Tata Finance Corporation, the said finance company has insisted upon the assessee to make ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
