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2016 (2) TMI 238 - AT - Income TaxPenalty u/s 271D - whether the loan accepted by the assessee is a loan or deposit within the meaning of sec. 269SS - Held that:- Assessing Officer issued show-cause notice to levy penalty under sec. 271E of the Act, but finally levied penalty under sec. 271D of the Act. Sec. 271E deals with levy of penalty for violation of the provisions of sec. 269TT of the Act. In the present case on hand, the Assessing Officer initiated the penalty under sec. 271E for violation of sec. 269TT of the Act, but levied penalty under sec. 271D for violation of the provisions of sec. 269SS. From this conduct of the Assessing Officer, it was clear that the Assessing Officer did not applied his mind before levying penalty. The A.O. himself confused, whether the assessee accepted or repaid loan, which clearly shows that he has passed penalty order without application of mind. Therefore, the penalty order cannot be sustained in the eyes of law. Considering the facts and circumstances of the case and also applying the ratio of Gururaj Mini Roller Flour Mills ( 2015 (2) TMI 362 - ANDHRA PRADESH HIGH COURT ), we are of the opinion that the assessee has not accepted the loan or deposit in contravention of the provisions of sec. 269SS of the Act so as to levy penalty under sec. 271D of the Act. Therefore, we direct the Assessing Officer to delete the penalty levied under sec. 271D of the Act. - Decided in favour of assessee.
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