SRI DEVENDRA KUMAR ARORA,ASSAM vs. JCIT, RANGE - 2, JALPAIGURI, JALPAIGURI

The only issue is to be decided is as to whether the CIT(A) is justified in confirming the penalty imposed u/s 271D of the Act for violation of provision u/s 269SS of the Act.

Heard both parties and perused the materials available on record. The A.O initiated penalty proceedings u/s 271D of the Act having found that the assessee has received cash payments of Rs.5,00,000/- from different persons which of such receipt is Rs.20,000/- or more. During the course of such penalty proceedings, it is noted that the assessee submitted that he was sending his daughter to USA for education purpose and in order to get Visa he supposed to furnish bank certificate showing the substantial fund in his bank account. To meet such purpose, the fund was raised for a temporary period of one week from his friends and relatives and after obtaining bank certificate the said fund was withdrawn from the bank account and repaid back to the respective persons. It is also noted that the necessary evidences i.e. bank certificate, education documents etc. were submitted before the A.O. However not accepting the submissions of the assessee, the A.O imposed penalty u/s 271D of the Act and the CIT(A) confirmed the penalty of Rs.5,00,000/- vide its order dated 03.08.2017. We find that the A.O did not dispute that call letter issued by the respective university in USA and the granting of Visa to the daughter on 27.04.2007 relevant to the year under consideration.

The only objection raised by the A.O was that there was ample time between the issuing of call letter and granting of Visa and the assessee could have arranged the said funds through banking channels i.e. account payee cheques and drafts. It is noted from the impugned order that the reasons accorded by the A.O was appreciated by the CIT(A) and confirmed the levy of penalty u/s 271D of the Act. We find that the provision of section 273B of the Act was incorporated in the Act which provides that no penalty shall be imposable on a persons or an assessee, as the case may be, for any failure, referred to in the said provision, if the assessee proves that there was reasonable cause for such failure. Therefore it is clear both the parties below did not dispute that the assessee received such cash deposits in bank accounts from different parties in order to get the bank certificate to show his monetary capacities in getting Visa for his daughter to pursue higher studies in foreign country. We find that the explanation given by the assessee constitutes a reasonable cause within the meaning of section 273B of the Act. Therefore the order of CIT(A) is not justified and the penalty imposed by the A.O and as confirmed by the CIT(A), is cancelled. Thus, grounds raised