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The Jammu & Kashmir Bank Ltd. Versus JCIT, Range-3, Srinagar

2016 (6) TMI 694 - ITAT AMRITSAR

Penalty u/s 271E - violation of provisions of Section 269 T - Held that:- We find that the genuineness of repayments of depositors has not been doubted by the authorities below and the repayments of depositors in view of hardships of depositors is a reasonable cause for failure to comply with any provisions of the Act. The purpose of introduction of the penal provisions in the legislature were to curb black money and benami transactions. The purpose of legislature can never be to impose penalty .....

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fied in refusing to impose penalty when there is a technical breach or violation of the provisions of the Act - Decided in favour of assessee - I.T.A No. 75(Asr)/2015 - Dated:- 17-6-2016 - Sh. A. D. Jain, Judicial Member And Sh. T. S. Kapoor, Accountant Member For the Appellant : Sh. R.K. Gupta (Ad.) For the Respondent : Sh. Umesh Takyar (DR.) ORDER Per T. S. Kapoor (AM) This is an appeal filed by assessee against the order of learned CIT(A),Jammu, dated 09.12.2014 for Asst. Year:2009-10. 2 The .....

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d that assessee had violated the provisions of Section 269T and therefore, imposed the penalty u/s 271E of the Act amounting to ₹ 3,75,189/-. 4. Aggrieved with the penalty order the assessee filed appeal before learned CIT(A) and learned CIT also did not consider the arguments of assessee and upheld the penalty by holding as under: "Sec.271E deals with penalties imposed for failure to comply with the provisions of sec.269 T of the Act whereas se. 273 B of the Act provides that no pena .....

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e repayments of ₹ 375189/- to 13 number of depositors in cash all exceeding ₹ 20000/-. The repayment of deposit in contravention of provisions of sec. 269T cannot be made merely because a depositor does not have a bank account of expressed his/her inability to open the it Sec. 269T of the Income Tax Act, 1961 clearly provides that no banking company a in sec. 269SS explanation (i) shall repay loan or deposit made with it otherwise than through account payee cheque or account payee ba .....

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rightly been posed by the A.O." 5. Aggrieved the assessee is in appeal before us. 6. At the outset, the learned AR submitted that the Branch Manager of assessee company on the request of depositors had made repayments in cash as there was no Bank Accounts of depositors and due to genuine hardships the repayments were made and the intention was not to violate any provisions of the Act. He further submitted that genuineness of entries is not in dispute and entries are genuine repayments of d .....

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heard the rival parties and have gone through the material placed on record. We find that the genuineness of repayments of depositors has not been doubted by the authorities below and the repayments of depositors in view of hardships of depositors is a reasonable cause for failure to comply with any provisions of the Act. The purpose of introduction of the penal provisions in the legislature were to curb black money and benami transactions. The purpose of legislature can never be to impose pena .....

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ustified in refusing to impose penalty when there is a technical breach or violation of the provisions of the Act. The Hon'ble ITAT, Amritsar Bench in ITA No.73 to 75(Asr)/2014 under similar facts and circumstances has held as under: "7. We have heard the rival parties and have gone through the material placed on record. We find that there is no dispute that assessee had made repayments of fixed deposits in violation of provisions of section 269T and there is also no dispute that in Ass .....

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In Asst. Year 2008-09, the CIT(A) has confirmed the penalty holding that request letters by depositors were unverified and uncertified and therefore cannot be treated as piece of evidence. He further held that repayments in cash for medical expenses/marriage expenses were not a reasonable cause. It is an undisputed fact that the repayments represented genuine transactions and no claim of bogus transactions has been made by Revenue Authorities. The purpose of introduction of these sections in th .....

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rovisions of section 269T. Even if penalties are prescribed the higher authorities will be justified in refusing to impose penalty when there is a technical breach of provisions of the Act. The Hon'ble ITAT, Amritsar Bench in the case of the Faridkot Bathindha Kshetriya Gramin Bank vs. JCIT (2003) 81TTJ(ASR)705, under similar facts and circumstances has held as under. "During the course of penalty proceedings, the assessee filed the affidavits and produced evidence regarding identity of .....

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ere made." Similarly the Punjab & Haryana High Court in the case of CIT vs. Saini Medical Store 277 ITR 420 (P&H) has held as under: "A combined reading of the provisions of ss. 271E and 273B makes it clear that if the assessee shows "reasonable cause" for the failure to comply with any provision referred thereto, the penalty for its violation shall not be imposable on the assessee. In the present case, the CIT(A) while deleting the penalty had accepted the explanatio .....

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