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2021 (3) TMI 427 - AT - Income TaxLevy of penalty u/s 271D - assessee has received cash other than account payee cheque/draft in contravention of provisions of section 269SS - HELD THAT:- Section 273B of the I.T. Act provides that no penalty shall be imposable on the persons or the assessee as the case may be for any failure referred to in section 271D of the I.T. Act, if he proves that there was a reasonable cause for the said failure. The assessee explained before the authorities below that two of the neighbours of the assessee purchased the properties and they were to make payment to HUDA. Since there was having no bank account, therefore, on their request assessee received the amount and deposited in his bank account. The drafts were prepared favouring the HUDA and ultimately the same have been deposited by them. The receipts are in the names of Mrs. Sujata and Shri Dushyant of the equivalent amount. Receipts of HUDA in favour of Shri Dushyant are also placed on record. These facts would clearly disclose that assessee has reasonable cause for failure to comply with provisions of law contained u/s 271D - Further, while passing the assessment order dated 21.03.2014 the AO did not disbelieve the explanation of the assessee as regards receipt of cash from these two neighbours and issue of drafts for these two neighbours and ultimate payment to HUDA. The AO did not record any satisfaction in the assessment order for contravention of provisions of section 271D. Assessee has reasonable cause for failure to comply with provisions of law and that no satisfaction has been recorded by the AO in the assessment order, would clearly show that no penalty is leviable in the matter.
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