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Facts
The Revenue appealed against the CIT(A)'s order deleting the penalty levied under section 271D for alleged violation of section 269SS. The assessee had reportedly taken a cash loan from Shri Radheshyam Agrawal/ Shri Pankaj Radheshyam Agrawal. The CIT(A) had deleted the penalty.
Held
The Tribunal held that based on a previous order (ITA No.1339/PUN/2024), there was no cash loan transaction between the assessee and Shri Radheshyam Agrawal/ Shri Pankaj Radheshyam Agrawal. Therefore, section 269SS was not violated, and no penalty under section 271D was leviable.
Key Issues
Whether penalty under section 271D for alleged violation of section 269SS is leviable when no cash loan transaction occurred, and whether a statement given to police authorities is admissible evidence.
Sections Cited
271D, 269SS, 68, 25
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Income Tax Appellate Tribunal, PUNE BENCHES “B”, PUNE
Before: DR.MANISH BORAD & SHRI VINAY BHAMORE
आदेश / ORDER
PER DR. MANISH BORAD, ACCOUNTANT MEMBER :
This appeal filed at the instance of Revenue pertaining to A.Y. 2015-16 is directed against the order dated 14.05.2024 framed by CIT(A), Pune-12 arising out of penalty order passed u/s.271D of the Act on 28.09.2022.
Sole grievance of the Revenue is that ld.CIT(A) erred in deleting penalty levied u/s.271D of the Act for violation of section 269SS of the Act.
At the outset, Ld. Counsel for the respondent-assessee supporting the finding of Ld.CIT(A) submitted that the quantum addition made u/s.68 of the Act by the AO which was deleted by ld.CIT(A), came up for adjudication before this Tribunal in the appeal filed by the Revenue vide and this Hon’ble Tribunal vide order dated 24.03.2025 has held that the assessee has not taken any cash loan from Late Shri Radheshyam Agrawal/ Shri Pankaj Radheshyam Agrawal. Since there was no loan transaction therefore section 269SS of the Act is not violated therefore, no penalty u/s.271D of the Act is leviable.
On the other hand, ld. Departmental Representative though supported the order of the Assessing Officer but failed to controvert the contentions made by ld. Counsel for the assessee.
We have heard both the sides and perused the record placed before us. Respondent-assessee has been visited by penalty u/s.271D of the Act for the alleged violation of section 269SS of the Act for the cash loan taken from Shri Radheshyam Agrawal/ Pankaj Radheshyam Agrawal. We find that against the quantum addition made u/s.68 of the Act by AO which was deleted by ld.CIT(A), Revenue filed the appeal before this Tribunal but failed to succeed and this Hon’ble Tribunal vide order dated 24.03.2025 held in favour of the assessee and the relevant para is reproduced below :
“34. In view of the above discussion hereinabove, we are inclined to hold that the transaction if any which has happened between the assessee and Shri Radheshyam Agrawal/Shri Pankaj Radheshyam Agrawal that too not being supported by any credible evidence filed by Revenue authorities, is of the nature of business transaction of sale of immovable properties by M/s. Kasliwal Empire to Shri Radheshyam Agrawal/Shri Pankaj Radheshyam Agrawal but by no means can be termed as transaction of borrowing funds in the form of cash loan against Hundi. The Revenue authorities have merely acted on the basis of the statement given by the assessee before the police authorities and it is judicially settled that such statement given before the police authorities is not an admissible evidence in terms of provisions of section 25 of the Indian Evidence Act and the other document which remains is cheques and documents alleged to be Hundi which are merely in the nature of collateral security given by the assessee for the purpose of entering into transaction of sale of immovable properties.”
From perusal of the above finding of this Tribunal, we observe that this Tribunal has held that there was no transaction of borrowing of funds in the form of cash loan by the assessee from Shri Radheshyam Agrawal/ Shri Pankaj Radheshyam Agrawal and since there is no transaction of cash loan, section 269SS of the Act is not violated and therefore no penalty u/s.271D of the Act is leviable. We thus fail to find any inconsistency in the finding of ld.CIT(A). Grounds of appeal raised by the Revenue are dismissed.
In the result, appeal of the Revenue is dismissed.
Order pronounced on this 27th day of May, 2025.