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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
PER ANIL CHATURVEDI, AM :
This appeal filed by the Revenue is emanating out of the order of Commissioner of Income Tax (A) – 1, Aurangabad dated 01.09.2016 for the assessment year 2009-10.
The relevant facts as culled out from the material on record are as under :-
Assessee is an Association of Persons (AOP) engaged in the business of Ginning and Pressing of raw cotton on job work basis. During the course of assessment proceedings, it was noticed that
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assessee had accepted the loans from various persons in cash to
the extent of Rs.28,00,500/- and had also repaid the same in cash
thereby contravening the provisions of Sec.269SS and 269T of the
Act respectively. AO therefore vide proposal dt.09.04.2015 made a
reference for initiation of penalty proceedings u/s 271D of the Act.
Accordingly proceedings u/s 271D of the Act were initiated and a
notice was issued and served on the assessee. Thereafter, penalty
order u/s 271D of the Act was passed vide order dt.31.08.2015
and penalty of Rs.28,00,500/- was levied u/s 271D of the Act on
account of contravention of provisions of Sec.269SS of the Act for
accepting the loans in cash. Aggrieved with the penalty order,
assessee carried the matter before Ld.CIT(A), who vide order
dt.01.09.2016 (in appeal No.ABD/CIT(A)-1/234/2015-2016 dated
05.10.2015) deleted the penalty levied u/s 271D of the Act.
Aggrieved by the order of Ld.CIT(A), Revenue is now in appeal before
us and has raised the following grounds.
“1. Whether on the facts and in the circumstances of the case the CIT(A) was justified in to cancel the penalty of Rs.28,00,500/- levied u/s 271D though there is nothing to show that there were bonafide reasons for acceptance of the loan and repayment thereof both in cash.
Whether the CIT(A) was justified in not appreciating the fact that assessee has bank account and established banking channel is available in small villages through out the district corners. In this case reliance has been placed on the finding of the honourable Apex court in the case of Assistant Director of Inspection Vs AB Shanti (2002) 122 Taxman 574 Rendered while upholding the constitutional validity of section 269SS and 271D of IT Act which affirmed the judgement of the Honourable Delhi High court in CIT Vs Samora Hotels ( Private) Limited (2012) 19 Taxman holding that the existence of a genuine or bonafide transaction is not sufficient to attract the relief u/s 273 IT Act 1961. It must be established that for some bonafide reasons the assessee count not get a loan or deposit by an account payee cheque or account payee bank draft. Without a clear finding or both the aspect referred to in the said supreme courts decision the tribunal in law could not have concluded that the assessee had a "reasonable cause” for its failure to accept the said amount in compliance with section 269SS of the said Act. There is nothing on record to show that there were bonafide reason
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for not accepting the said amounts through account payee cheques or account payee bank draft and unless that is established the shelter of section 273B of the IT Act is not available.
The order of the AO be restored and that of the CIT(A) be vacated.”
All the grounds being inter-connected are considered
together.
Before us, Ld.D.R. took us through the penalty order and
submitted that assessee had accepted the cash loans in
contravention of provisions of Sec.269SS of the Act and therefore
penalty was rightly levied by the AO and that Ld.CIT(A) has erred in
deleting the penalty. He thus supported the order of AO. Ld.A.R. on
the other hand reiterated the submissions made before AO and
Ld.CIT(A) and supported the order of Ld.CIT(A).
We have heard the rival submissions and perused the
material on record. The issue in the present case is with respect to
deletion of penalty levied u/s 271D of the Act. Ld.CIT(A) while
deleting the penalty has given a finding that the AOP consists of
agriculturist members. It is engaged in the business of agricultural
commodities. The members of AOP are uneducated and are not
aware of the provisions of law, the lendors and the members were
uneducated agriculturists and it was only a technical violation of
the provisions of Sec.271D of the Act. He thereafter relying on the
various decisions cited in the order has given a finding that though
assessee had violated the provisions of Sec.269T of the Act but
assessee had shown existence of reasonable cause on account of
ignorance of law. He has further noted that neither in the
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assessment order nor in the penalty order there was a finding that the transaction was not a bonafide transaction or the transaction was with a view to avoid taxes. He thus considering the aforesaid facts deleted the penalty. Before us, Revenue has not pointed out any fallacy in the findings of Ld.CIT(A). In such a situation, we find no reason to interfere with the order of Ld.CIT(A). Thus, the grounds of the Revenue are dismissed.
In the result, the appeal of the Revenue is dismissed.
Order pronounced on 27th day of March, 2019.
Sd/- Sd/- (SUSHMA CHOWLA) (ANIL CHATURVEDI) �या�यक सद�य / JUDICIAL MEMBER लेखा सद�य / ACCOUNTANT MEMBER पुणे Pune; �दनांक Dated : 27th March, 2019. Yamini
आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant 2. ��यथ� / The Respondent 3. The CIT(A)-1, Aurangabad. The PCIT-I, Aurangabad. 4 �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, “ए” / DR, 5. ITAT, “A” Pune; 6. गाड� फाईल / Guard file.
आदेशानुसार/ BY ORDER
// True Copy // व�र�ठ �नजी स�चव / Sr. Private Secretary आयकर अपील�य अ�धकरण ,पुणे / ITAT, Pune.