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2023 (1) TMI 884 - AT - Income TaxPenalty u/s. 271D - contravention to Section 269SS - assessee borrowed unsecured loans from related parties - staff filled the name of the depositor correctly but the account number was wrongly mentioned - HELD THAT:- Section 273B has provided a statutory fetter to the automatic application of Section 271D. It provides that no penalty shall be imposable on a person under these provisions for any violation, if the person could establish the existence of any “reasonable cause”. It is only where a person could not explain any “reasonable cause” for the failure in complying with the provisions of Section 269SS, then the penalty under section 271D would follow. The assessee has explained the circumstances under which the cash deposit, which was in the nature of mistaken bank challan entry was received by the assessee. The staff filled the name of the depositor correctly but the account number was wrongly mentioned - The same was rectified by the assessee on the very next day i.e. on 25.08.2012 by remitting the said amount of Rs. 4,78,000/- by issuing Cheque No. 2623 to M/s. Om Ceramics to prove the genuineness. The assessee also produced the banking challan of cash deposits and certificate from Bank of Baroda, as well as the bank statement and an affidavit filed by assessee’s staff. Assessee also produced before us the Income Tax Returns filed by M/s. Om Ceramics which carry the same address that of the assessee herein. Assessee has proved a reasonable cause of wrongly coating the bank account number of the sister concern which was rectified the next day itself. Thus it is not a fit case for imposition of penalty u/s. 271D r.w.s. 273B of the Act. We therefore cancel the penalty levied and allow the grounds of appeal raised by the assessee.
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