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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI JOGINDER SINGH, JM & SHRI MANOJ KUMAR AGGARWAL, AM
Per Manoj Kumar Aggarwal (Accountant Member)
The captioned by assessee for Assessment Year 2009-10 is directed against the order of Ld. Commissioner of Income Tax (Appeals)-33 [CIT(A)], Mumbai dated 30/10/2014 qua confirmation of penalty of Rs. 1,18,715/- u/s 271E.
Briefly stated, the assessee was engaged in the business of supply of stationery items, printing & Xerox etc. The income of the assessee for impugned AY was determined at Rs.2,08,660/- vide Assessing Officer order dated 29/12/2011 passed u/s 143(3) of the Income Tax Act. During the course of assessment proceeding, AO noted that the assessee repaid loan in cash to his brother namely Shri Kamlesh M.Patel for Rs.1,18,715/- in violation of Section 269T which resulted into imposition of penalty of Rs.1,18,715/- u/s 271E vide Jt. Commissioner of Income Tax, Range 23(1) penalty order dated 27/06/2012 as affirmed by First Appellate Authority. Aggrieved, the assessee is in appeal before us. 3. The Ld. Counsel for Assessee [AR] contended that the assessee was small time shopkeeper and was not well versed with the law. The total turnover of the assessee for the whole year stood at Rs.12.25 Lacs upon which profit of Rs.2.37 Lacs has been assessed. The assessee took small loan from his brother and repaid the same, as and when he was able to save cash from his small earnings. The repayment has been made over a period of one month in small amounts ranging from Rs.13000/- to Rs.15000/- on each occasion and all such repayments were duly recorded in the cash book maintained by the assessee. Per contra, Ld. DR supported the stand of lower authorities by contending that the penalty under the act is civil liability and violation of the express provisions would result into imposition of penalty and ignorance of law is no excuse.
Jeevan Murji Patel Assessment Year 2009-2010 4. We have heard rival contentions. The facts are not in dispute. The assessee has repaid loan of Rs.1,18,715/- in cash to his brother. It is well settled that basic objectives of provisions of Section 269SS and 269T is to check manipulation in the accounts and to keep a trail of loan activities. Further, Section 273B carves out and exception and saves the assessee from strict penalty provisions provided there was reasonable cause for the said failure. In this case, we find that cash repayment was duly recorded in the cash book maintained by the assessee. Further, the assessee had no incentive to make cash repayment and the same, at the most, could be attributed to his ignorance and background. Therefore, on the peculiar facts and circumstances of the case, we delete the impugned penalty and allow assessee’s appeal. In nutshell, the appeal of the assessee stands allowed. 5.