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Facts
The assessee's appeal for assessment year 2017-18 pertains to proceedings under Section 271E of the Income-tax Act, 1961. The assessee runs a cold storage facility for farmers in rural areas where banking facilities are not prevalent. The lower authorities levied a penalty under Section 271E for repayment of advances in cash.
Held
The Tribunal noted that the assessee's business activity, involving cash payments and receipts in rural areas not fully covered by banking facilities, could not be ruled out. It was held that the assessee had sufficient cause for seeking the deletion of the penalty.
Key Issues
Whether the penalty under Section 271E for cash transactions is justified given the assessee's business in rural areas with limited banking access.
Sections Cited
271E
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Income Tax Appellate Tribunal, “SMC” BENCH, AGRA
Before: SHRI SATBEER SINGH GODARA & SHRI MANOJ KUMAR AGGARWAL
O R D E R PER SATBEER SINGH GODARA, JUDICIAL MEMBER:
This assessee’s appeal for assessment year 2017-18 arises against Commissioner of Income Tax(Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN & Order No. ITBA/NFAC/S/250/2023-24/1058938930(1) dated 20.12.2023, involving proceedings u/s 271E of the Income-tax Act, 1961, [hereinafter referred to as the ‘Act’].
Case called twice. None appears at the assessee’s behest. It is accordingly proceeded ex-parte.
The learned DR vehemently argued during the course of hearing that both the lower authorities herein have rightly levied Section 271E penalty repayment of advances in cash at the assessee’s behest. He, however, hardly rebutted clinching fact from the case file that the assessee runs cold storage facility for farmers who are mostly settled in rural areas not covered by the banking facility wherein such cash payments or receipts, in regular business activity could not be ruled out altogether.
We thus deem it proper to hold that the assessee has sufficient cause seeking deletion of the impugned section 271E penalty in very terms.
This assessee’s appeal is allowed. Order pronounced in the open court on 10.02.2025