DEEPAK KUMAR SAHOO,BALASORE vs. JCIT, BALASORE RANGE, BALASORE

IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER AND SHRI ABY T. VARKEY, JUDICIAL MEMBER

ITA No.115/CTK/2016 Assessment Year :2008-09

Sri Dipak Kumar Sahu, S/O. Vs. JCIT, Balasore Range, Muralidhar Sahu, At/PO: Balasore Jaleswar, Dist: Balasore. PAN/GIR No. ADBPS 8726 K (Appellant) .. ( Respondent)

Assessee by : Shri P.K.Mishra, AR Revenue by : Shri Asit Kumar Mohapatra, CIT DR

Date of Hearing : 16 /02/ 2017 Date of Pronouncement : 17 /02/ 2017

O R D E R Per Bench This is an appeal filed by the assessee against the order of CIT(A)-

Cuttack, dated 8.12.2015, for the assessment year 2008-09.

the ld CIT(A) is not justified in sustaining the penalty of Rs.3,00,000/- as

against Rs.3,28,176/- imposed by the Assessing Officer u/s.271E of the

Act.

authorities and materials available on record. In the instant case, the

2 ITA No. 115/CT K/ 2016 Asse ssment Year :20 08- 09

Assessing Officer found that the assessee has repaid loan/deposit in cash

in contravention of the provisions of section 269T of the Act. Therefore,

the JCIT, Balasore Range after getting such information issued notice u/s.

274 read with section 271E of the Act to the assessee. He found that the

assessee has repaid loan in cash to five persons totaling to Rs.3,28,176/-

during the year. The assessee submitted to the query of the JCIT, that the

persons are living in their native villages and having no bank accounts due

to non-availability of banking facilities in the nearby areas. The JCIT was

not satisfied with such explanation. He relied on the decision of Delhi Bench

of the Tribunal in the case of Ajay Goel Vs. ACIT, Range-28, New Delhi, 126

ITD 89, where it was held that merely because the amount of Rs.2,00,000/-

has been repaid in part not exceeding Rs.20,000/- on a single day would

not absolve the assessee from the rigours of section 269T as was clear from

the section itself. It was held that the assessee has violated the provisions

of section 269 T of the Act by repaying loan/deposits in cash in

contravention of the said provisions and has therefore become liable for

penalty u/s. 271E of the Act for penalty of Rs.3,28,176/- U/s. 271E of the

Act and levied penalty accordingly.

Bala Thakkar amounting to Rs.20,386/- and Sri Banmali Mishra amounting

to Rs.47,790/- may not come strictly as contravention of the provisions of

section 269T of the Act. As regards the rest of the payments/deposits in

cash is concerned, it appears that the assessee has made convenient

arrangements with his family members regarding the rest of the amount

3 ITA No. 115/CT K/ 2016 Asse ssment Year :20 08- 09

repaid in cash. Therefore, he considered those payments as violation of

provisions of section 269T of the Act and, accordingly confirmed the penalty

of Rs.3,00,000/-.

Jharkhand High Court in the case of OMEC Engineers vs CIT, 294 ITR 599

(Jhar) and submitted that the Hon’ble High Court has held that there being

no finding of the Assessing Officer, the CIT(A) or the Tribunal that the

transaction made by the assessee in breach of provisions of section 269SS

was not a genuine transaction, penalty u/s.271D is not leviable merely for

technical mistake. He submitted that similarly in assessee’s case, the

return having been accepted under section 143(3) after scrutiny, there

being also no finding that transactions were malafide aimed at disclosing

concealed money, imposition of penalty under section 271D merely for

technical mistake could not be sustained.

was imposed by the Assessing Officer and ld CIT(A) restricted the penalty

to Rs.3,00,000/- on the ground of making repayment/deposit in cash by

the assessee to the family members. Ld A.R. of the assessee has relied on

the decision of Hon’ble Jharkhand High Court in the case of OMEC Engineers

(supra), wherein, it has been held that there being no finding of the

Assessing Officer, the CIT(A) or the Tribunal that the transaction made by

the assessee in breach of provisions of section 269SS was not a genuine

transaction, penalty u/s.271D is not leviable merely for technical mistake.

4 ITA No. 115/CT K/ 2016 Asse ssment Year :20 08- 09

Similarly, in the present case also, we find that there is no finding of the

Assessing Officer or the CIT(A) that the transactions in violation of section

269SS of the Act were not genuine. The assessee’s return has been

accepted u/s.143(3) of the Act after scrutiny. There is no finding that the

transactions were malafide aimed at disclosing concealed money.

Therefore, respectfully the decision in the case of OMEC Engineers (supra),

we delete the levy of penalty of Rs.3,00,000/- u/s.271E of the Act and allow

the ground of appeal of the assessee.

Sd/- sd/- ( Aby T. Varkey) (N.S Saini) JUDICIAL MEMBER ACCOUNTANT MEMBER

Cuttack; Dated 17 /02/2017 B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellant : Sri Dipak Kumar Sahu, S/O. Muralidhar Sahu, At/PO: Jaleswar, Dist: Balasore 2. The Respondent. JCIT, Balasore Range, Balasore 3. The CIT(A) Cuttack 4. Pr.CIT, Cuttack 5. DR, ITAT, Cuttack 6. Guard file. BY ORDER, //True Copy//

SR.PRIVATE SECRETARY ITAT, Cuttack