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2020 (3) TMI 716 - ITAT KOLKATAPenalty u/s 271E - repayment of the loans in question in cash - default u/s 269SS - reasonable cause - HELD THAT:- Provision of section 269T of the Act, which is in seriatim to section 269SS of the Act, was introduced to eliminate the proliferation of black money in the society at large and not otherwise. As per CBDT circular, noted above, the assessee should explain the reasonable cause. In the instant case, the assessee has explained the reasonable cause stating that the entire transactions took place within the relatives and friends of the family and he had made repayment of the money to the persons who were in dire need of funds on those days, in order to enable them to carry on their business. These transactions have been recorded in the books of the assessee as well as in the books of the person to whom the payment was made. This is bona fide and genuine transaction to help the relatives and friends in needy hours and there was no intention to deceive the Revenue. Provisions, of Section 273B provide that notwithstanding anything contained in the provisions of 271E of the Act, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provision if he proves that there was reasonable cause for such failure and if the assessee proves that there was reasonable cause for failure to take a loan otherwise than by account-payee cheque or accountpayee demand draft, then the penalty may not be levied. If there was a genuine and bona fide transaction and if for any reason the tax payer could not get a loan or deposit by account- payee cheque or demand draft for some bona fide reasons, the authority vested with the power to impose penalty has got discretionary power. In the instant case, the Ld. Assessing Officer ought to have considered that the payment of loan of ₹ 5,80,000/- by the assessee were undisputedly genuine and bona fide as they were reflected in the books of the recipients as well as those of the assessee. The assessee has explained the circumstances in which it was constrained to make the repayment of the loans in question in cash, therefore penalty should not be levied. Provisions of section 271E lays down conditions for imposition of penalty for repayments of loans and deposits in cash, where the amount exceeds ₹ 20,000/- in violation of section 269SS of the Act. Considering the fact that this provision is brought in for identification of source for repayment, there should not be any levy of penalty where the persons are otherwise properly identified and the transactions are genuine, because there can be no attempt to evade tax, where the identities of the persons dealt with are known. In the instant case, the repayment of advances from regular parties are identifiable and the assessee has explained the circumstances in which it was constrained to make the repayment of the loans in question in cash. That being so, the penalty imposed on repayment of advances from two persons should be deleted, hence we delete the penalty - Decided in favour of assessee.
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