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Income Tax Appellate Tribunal, Hyderabad ‘ B ‘ Bench, Hyderabad
Before: Shri S.S. Godara & Shri Laxmi Prasad Sahu
This assessee’s appeal for A.Y 2011-12 arises from the CIT(A)-7, Hyderabad’s order dated 01.08.2017 in case No.238/CIT(A)-7/2014-15 involving proceedings under section 143(3) of Income Tax Act, 1961 (in short, “the Act”).
Case called twice. None appears at the assessee’s behest. We accordingly proceeded ex-parte.
Coming to the assessee’s sole substantive grievance that both the lower authorities have erred in law and on facts in confirming section 271D penalty of Rs.6 lacs; we note that the CIT(A)’s detailed discussion to this effect reads as under :
“ 4.2 I have considered the assessment order and the submissions of the assessee. The assessing officer recorded a finding in the assessment order in para 6.2 of the assessment order passed u/s 143(3) dt 30.12.2013 that the assessee produced confirmations from 4 erstwhile partners that they have given cash loan of Rs.1,50,000/- each to the assessee during the F.Y.2010-11 relevant to A.Y.2011-12. In the penalty proceedings also, the assessing officer recorded a finding. at para 3.2 of the order u/s 271D, dt 27.06.2014 as under : "The persons in question have also submitted confirmation letters stating that they have given cash loans totaling to Rs.6 lakhs to the assessee during the F.Y.2010-11. The contention of the assessee was also accepted while finalizing the assessment order, as there were drawings in the capital account of these four persons. Hence, the fact that the assessee has received cash loan of Rs. 6 lakhs during the year in question, has been clearly established. " 4.3 The above findings of the assessing officer was not countered by the AR of the appellant. The fact of the drawing of the funds from the capital accounts of the firm in cash and fact of giving in cash of Rs.1,50,000/- each by the four persons were not disproved. The contention of the AR of the appellant that these amounts were not physical loans but balances carried forward is not acceptable to me. The moment the money was drawn in cash from any entity and advanced to any person which is accepted by that person, then provisions of section 26955 are clearly attracted. 5ince, there were no reasonable cause for violation of section 269SS of the IT Act, the assessee is liable to pay penalty u/s 2710 of the IT Act. Hence, I confirm the levy of penalty u/s 271D of the IT Act. Therefore, all the grounds of appeal raised on this issue are rejected.”
3. We find force in the learned lower authorities reasoning since the assessee’s stand right from scrutiny till date has failed to explain the “reasonable cause” having accepted the impugned cash loans totaling to Rs.6 lacs. We therefore hold that both the lower authorities have rightly invoked the impugned penalty provision in assessee’s case for want of sufficient cause coming from assessee’s side. Ordered accordingly.
This assessee’s appeal is dismissed.
Order pronounced in the Open Court on 20th September, 2021.