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Shri Krishnapada Chanda Versus Commissioner of Income Tax-XI

2015 (4) TMI 509 - CALCUTTA HIGH COURT

Penalty under section 271D - Tribunal confirmed penalty levy - Held that:- The fact that money was withdrawn on 6th May, 1998 from the bank account of the lender and the fact that the money was deposited in the bank account of the borrower on 6th May, 1998 itself is a pointer to show that the assessee was under a belief that there was a great urgency. True that he could have achieved the object by obtaining an account payee cheque from the lender but the same would have taken time for the purpos .....

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regarding the urgency in the prevailing circumstances and according to him the urgency existed for making payment.The observation of CIT (A) is a pointer to show that the case is clearly covered by Section 273B of the Income Tax Act.

It is elementary that an appellate authority interferes with an order not because the impugned order is not right but because the impugned order is shown to be wrong. Our attention was not drawn to any finding of the learned Tribunal indicating that the o .....

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eal preferred by the revenue setting aside the order passed by C.I.T (Appeals) deleting the penalty imposed upon the assessee. The facts and circumstances of the case briefly stated are as follows; On 6th May, 1998, the assessee borrowed a sum of ₹ 1,90,000/- in cash from his brother. It is not in dispute that the sum of ₹ 1,90,000/- was withdrawn by the brother of the assessee from his own bank account. After the withdrawal was made, the sum was made over to the assessee and on the .....

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therefore, the penalty should not have been levied. The C.I.T (Appeals) has obviously taken assistance of section 273B, which provides that no penalty shall be impossible for any failure referred to in section 269SS, if the assessee proves that there was a reasonable cause for the said failure. Aggrieved by the appellate order, the revenue preferred an appeal which was allowed by the Tribunal, which is under challenge. At the time of admission of the appeal the following questions were formulat .....

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by interpreting Section 273B of the I.T.Act in a hypertechnical way as if the urgent requirement of money is the only criteria for applying the Section 273B of the I.T.Act for not imposing any penalty under Section 271D of the I.T.Act without even taking into consideration the genuineness of the loan transaction and the other genuine causes whereas Section 273B inter alia clearly says that no penalty shall be imposable if there is reasonable cause for accepting the cash loan and when all these .....

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e cause. Mrs. Gutgutia, learned advocate appearing for the revenue submitted that absence of any reasonable cause to borrow the money in cash in contravention of section 269SS is substantiated by the fact that the assessing officer in his order dated 4th February, 2003 has disclosed the following undisputed facts. "5.1 Furthermore, the facts on record reveal that while the assessee received the cash amount of ₹ 1,90,000/- on May 06, 1998 which he deposited in his bank account on the s .....

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ion 269SS of the Act (such as an account payee bank draft) for the first payment even assuming that it had to be paid to the French Motor Car Co. Ltd. latest by 14.05.1998. For the balance payments that were made several weeks later in June and July, 1998, the lack of any urgency whatsoever is palpably apparent." We have not been impressed by the reasoning advanced by the assessing officer and brought to our notice by Mrs. Gutgutia. The contravention of section 269SS, if any, took place on .....

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