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2021 (2) TMI 845 - AT - Income TaxPenalty u/s 271D - assessee was contravening the provisions of section 269SS - Accepting cash deposits exceeding permisible limit - Scope of 'reasonable cause' - Bona-fide belief of the assessee - HELD THAT:- In the present case, the assessee being the co-operative bank has accepted deposits in cash exceeding ₹ 20,000/- from its members which was prohibited under the provisions of section 269SS of the Act. The assessee did not dispute the applicability of the provisions of section 269AA but contended that the mistake was committed under the bona-fide belief and thus, sought the immunity under the provisions of section 273B of the Act. Provisions of section 273B of the Act prescribes that penalty shall not be imposable for any failure referred to in Sec.271D of the Act, if the assessee proves that there was reasonable cause for such failure. Therefore, in the instant case, what is required to be examined is as to whether the assessee had a reasonable cause for its failure to comply with the provisions of Sec. 269SS r.w.s. 271D of the Act. Admittedly, it was first mistake committed by the assessee in the year under consideration as evident from the affidavit filed by it. Further, the Revenue in the assessment framed under section 143(3) of the Act for the assessment year 2008-09 has not pointed out to the assessee for the contravention of the provisions of section 269SS of the Act. All these contentions of the assessee have not been controverted by the authorities below. Accordingly, we can draw an inference that the assessee has accepted the cash as deposits exceeding ₹ 20,000/- under the bona-fide belief. Bona-fide belief of the assessee that the transactions were exempted from the requirements of Sec.269SS of the Act and, there being no material to show that the transactions have been carried out with any intention to avoid or evade taxes, in our opinion, the assessee has been successful in showing that there was a reasonable cause for his failure to comply with the provisions of Sec.269SS of the Act. Accordingly, the order of the learned CIT(A) is set aside and the AO is directed to delete the penalty imposed under Sec. 271D - Decided in favour of assessee.
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