KAILASH PRINTMEDIA PRIVATE LIMITED,HAMIRPUR vs. JCIT, MANDI RANGE, MANDI

It could be seen that the penalty has been levied on the fact that the assessee received loans / deposits of Rs.10.84 Lacs from its director in cash on various dates as tabulated in para-1 of penalty order dated 20-12-2018. The Ld. AO, invoking the provisions of Sec.271D, show-caused the assessee. The assessee refuted the same and stated that the receipt was neither loan nor deposits but the company was in need of fund to run the business which was provided by the director. However, Ld. AO rejected the same and levied penalty u/s 271D for Rs.10.84 Lacs for violating the provisions of Sec.269SS.

The Ld. AO levied another penalty u/s 271E for violation of Sec.269T on the ground that the assessee repaid loans to M/s Raj Stone Crusher and Smt. Sheetal Chugh in cash. The assessee reiterated that the amount was repaid on behalf of the director. However, Ld. AO rejected the explanation of the assessee and levied penalty of Rs.2.10 Lacs against the assessee.

During first appeal, the assessee stated that it was in dire need of funds to run the business and accordingly, small amounts were received from directors on various occasions in cash to meet the same. The assessee relied on various judicial decision to supports its stand that such transactions would not attract penalty provisions. However, Ld. CIT(A) confirmed both the penalties against which the assessee is in further appeals before us.