TMI Blog2007 (12) TMI 186X X X X Extracts X X X X X X X X Extracts X X X X ..... . Jayakumar for the respondent. JUDGMENT The judgment of the court was delivered by K. Raviraja Pandian J.— The appeal has been admitted on the following question of law : "Whether, on the facts and in the circumstances of the case, the Appellate Tribunal has erred in deleting the penalty imposed under section 271D of the Act by holding that the assessee did not contravene the provisions of section 269SS of the Income-tax Act ?" 2 . The relevant assessment year is 1997-98. The assessee is running a benefit fund and doing finance business. The Assessing Officer initiated penalty proceedings under section 271D of the Income-tax Act on the premise that the assessee had violated the provisions of section 269SS of the Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se on hand, deleted the penalty levied by the Assessing Officer. The Revenue carried the matter on appeal to the Income-tax Appellate Tribunal, which by its order dated August 22, 2003, affirmed the order of the Commissioner of Income-tax (Appeals) on all the reasoning given by the Commissioner of Income-tax (Appeals) and held that the Commissioner of Income-tax (Appeals) was perfectly justified in deleting the penalty under section 271D and dismissed the appeal. The correctness of the same is put in issue in this appeal before us by formulating the above question of law. 3 . We heard the argument of learned counsel on either side and perused the materials on record. 4. Before the Commissioner of Income-tax (Appeals), the assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gricultural income or small savings and that they were not having any banking transactions. 5 . Thus, it could be seen that the transactions were not camouflaged transactions or out of account transactions but bona fide transactions by persons of the avocation of agriculture and small traders and thus there was a reasonable cause for the failure. In this context, it is pertinent to refer section 273B of the Income-tax Act, which provides for penalty not imposable in certain cases. The section reads thus : "Penalty not to be imposed in certain cases.— Notwithstanding anything contained in the provisions of clause (b) of sub-section (1) of section 271, section 271A, section 271AA, section 271B, section 271BA, section 271BB, section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... count payee cheque or demand draft for some bona fide reason, the authority vested with the power to impose penalty has a discretionary power not to levy the penalty. 7 . In this case, the explanation offered with reference to the deposits received by the assessee has been accepted not only by the appellate authority - the Commissioner of Income-tax (Appeals), but also the Tribunal and deleted the penalty levied by the Assessing Officer. There is no material available on record for us to suspect or reject the transaction as not bona fide. Further, the Tribunal's decision relied on by the Commissioner of Income-tax (Appeals) as well as the Tribunal, i.e. Kundrathur Finance and Chit Co.'s case [2006] 283 ITR 329 (Mad) for deleting the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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