TMI Blog2013 (8) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... 6/- thus violation of the provisions of sections 269T - Held that:- M/s Devang Industry Inc. paid Rs. 1,00,000/- to M/s Prajvi Industrial Supplies and Rs. 4,00,000/- to M/s Ravi Industrial Corporation on behalf of the assessee due to financial crunch on the assessee. In order to repay the said loan, the assessee made certain re-payments in cash over the period form 02.04.2005 to 21.08.2005 which totaled Rs.3.70 lacs. Force in the submissions of the assessee that the sister concern was mounting pressure on the assessee to immediately repay the amount in cash, even if it was to be in small installments. Apart from that, it is further noticed that the assets of the company were attached on 11th August 2006 and such attachment was lifted only o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g standing dispute with M/s Prajvi Industrial Supplies, its supplier and of Rs.4,00,000 for purchasing some machinery from M/s Ravi Engineering, Delhi. For this purpose, the assessee stated to have requested M/s Devang Industries Inc., to make direct payments to these parties, which amounted to Rs. 1,00,000/- and Rs. 4,00,000/- by pay orders to the respective parties. Not satisfied with the assessee's contention, the AO imposed penalty u/s 271B. No relief was allowed in the first appeal. 4. We have heard the rival submissions and perused the relevant material on record. It is noticed that some dispute was going on between assessee and M/s Prajvi Industrial Supplies. The said party, a supplier of the assessee company, had filed a suit for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the assessee proves that there was a sufficient and reasonable reason for non-compliance with the provisions of section 269SS, then the penalty which is otherwise levaible u/s 271D, cannot be imposed due to the intervention of section 273B. 6. Adverting to the facts of the instant case, we are satisfied that there was a reasonable cause with the assessee company in requesting its sister concern to immediately make payment to old supplier with whom litigation was going on and also to the supplier of machinery. As such, we are satisfied that the provisions of section 273B have come to the rescue of the assessee in the present circumstances. In view of the existence of such reasonable cause, there can stand no penalty u/s 271D of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts, the assessee was left with no alternative but to repay it in cash as and when some reasonable amount was collected. We find force in the submissions of the Ld. AR. that the sister concern was mounting pressure on the assessee to immediately repay the amount in cash, even if it was to be in small installments. Apart from that, it is further noticed that the assets of the company were attached on 11th August 2006 and such attachment was lifted only on 18.03.2006. All the amounts in question were paid to the sister concern during the period of attachment. These facts and circumstances do go to show that there was a reasonable cause within the meaning of section 273B for making such re-payments otherwise than by way of A/c Payee Cheques or ..... X X X X Extracts X X X X X X X X Extracts X X X X
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