TMI Blog2010 (11) TMI 536X X X X Extracts X X X X X X X X Extracts X X X X ..... uld not attract any penal provision - Held that:- in the absence of any contrary material brought on record by the Revenue at the time of hearing and as per the hon'ble Gujarat High Court in the case of CIT v. Bombay Conductors and Electricals Ltd.[2008 -TMI - 4518 - GUJARAT HIGH COURT], decided in favour of assessee. - I. T. A. No. 1260/Kol/2010, - - - Dated:- 12-11-2010 - D. K. Tyagi, C. D. Rao, JJ. Ashutosh Rajhans for the Appellant M. D. Shah for the Respondent ORDER D. K. Tyagi, Judicial Member:- The appeal preferred by the Revenue is directed against the order of the learned Commissioner of Income-tax (Appeals), Siliguri dated February 17, 2010 for the assessment year 2006-07 on the sole ground of d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above, the Assessing Officer imposed penalty of Rs. 7,00,000 under section 271D on receipt of cash loan exceeding Rs. 20,000 from the six persons. In appeal, the learned Commissioner of Income-tax (Appeals) deleted the penalty as imposed by the Assessing Officer. Aggrieved by the said order, the Revenue is in appeal before us. At the time of hearing before us, the learned Departmental representative relied on the order of the Assessing Officer and submitted that the Assessing Officer has rightly levied penalty on the assessee under section 271D of the Act on the ground that the assessee had contravened the provisions of section 269SS of the Income-tax Act by accepting cash loans exceeding Rs. 20,000. On appeal, the learned Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had to accept cash loan. He also cited the following decisions in support of his contention stating that due to urgent business need, the assessee accepted cash loan, the penalty under section 271D was not leviable:- (a) CIT v. Ratna Agencies [2006] 284 ITR 609 (Mad), (b) CIT v. Parma Nand [2004] 266 ITR 255 (Delhi); 135 Taxman 100, (c) CIT v. Kharaiti Lal and Co. [2004] 270 ITR 445 (P and H); [2005] 144 Taxman 178, (d) Director of Income-tax (Exemption) v. All India Deaf and Dumb Society [2006] 283 ITR 113 (Delhi) ; 153 Taxman 1, (e) CIT v. Balaji Traders [2008] 303 ITR 312 (Mad); 167 Taxman 27, (f) OMEC Engineers v. CIT [2007] 294 ITR 599 (Jharkhand) ; [2008] 169 Taxman 158, (g) CIT v. Maheshwari Nirman Udyog [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd that the Assessing Officer has not disputed the fact that the loans were taken for payment of salary/wages to the employees working as security personnel for the assessee. We also find force in the submissions of the assessee that there was business exigency forcing the assessee to take cash loans for the purpose of disbursing salary/wages to the employees of the assessee. We also find that the Assessing Officer did not dispute the fact that the loans were taken for payment of salary to the employees. We also find that the hon'ble Madras High Court in the case of CIT v. Balaji Traders [2008] 303 ITR 312 ; 167 Taxman 27 has held as under:- "Section 271D of the Income-tax Act, 1961 Penalty For failure to comply with section 269SS Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee in breach of provisions of section 269SS was not a genuine transaction and on contrary, return filed by assessee was accepted after scrutiny under section 143(3), imposition of penalty merely on technical mistake committed by assessee, which had not resulted in any loss of revenue, was harsh and could not be sustained in law Held, yes." The hon'ble Rajasthan High Court in the case of CIT v. Maheshwari Nirman Udyog reported in [2008] 302 ITR 201; 170 Taxman 502 has held as under:- "Section 271D, read with sections 269SS and 273B, of the Income-tax Act, 1961 Penalty For failure to comply with section 269SS Assessment year 1993-94 Assessee-contractor had taken certain loans from its sister concern in cash to make payments to la ..... X X X X Extracts X X X X X X X X Extracts X X X X
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