TMI Blog2016 (3) TMI 1106X X X X Extracts X X X X X X X X Extracts X X X X ..... given case, if assessee shows reasonable cause for the failure, Assessing Officer is empowered under the Act to refrain from imposing penalty. In the present case after considering the explanation of the assessee in the context of facts and material on record, we are of the firm view that the assessee has proved that there was reasonable cause for accepting the cash loans. Further, the authority concerned, while imposing the penalty has not established that the transaction relating to acceptance of cash loan is either non–genuine or not bonafide. On careful analysis of the decision cited by the learned Authorised Representative, it is found that ratio laid down therein squarely applies to the facts of the present case. In the aforesaid view ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... M/s. Infinite Realities Pvt. Ltd. Rs. 7,25,000 M/s. Oceanview Estates Pvt. Ltd. Rs. 2,50,000 M/s. Shanti Snehari Realities Pvt. Ltd. Rs. 2,00,000 Total: Rs. 17,25,000 3. The Assessing Officer, therefore, called upon the assessee to show cause as to why the loan amount received in cash in violation of section 269SS should not be added back to her income. In response to the notice, the assessee, though, explained the reason for receiving the said loans in cash but the Assessing Officer was not convinced. He observed that the assessee had not filed confirmation letter from the concerne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s payment of stamp duty on two project agreements but since it was found that registration of document would only be done when the pay orders are cleared by banks and as the documents were urgently required to be registered on 8th January 2008, there was no option but to avail cash loan of ₹ 17.25 lakh from the four companies and transfer it to M/s. Cornetstene Estate Developers Pvt. Ltd. for the purpose of payment of stamp duty on 8th January 2008, so that documents could be registered. It was submitted, the pay orders purchased for payment of stamp duties were ultimately cancelled on 9th January 2008. Thus, it was submitted as there was reasonable cause for accepting cash loan, no penalty can be imposed. The Addl. CIT, however, was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns contained under section 269SS, do not restrict the application of section 271D to transactions which are not bonafide. Therefore, learned Departmental Representative submitted, the first appellate authority was not justified in deleting the penalty. 7. Learned A.R., on the other hand, reiterating the stand taken before the Departmental Authorities submitted, if at all there is any violation of provisions of section 269SS, it is for bona fide reasons and as there is a reasonable cause for accepting the cash loan, penalty cannot be imposed under section 271D merely for a technical breach. Learned A.R. submitted, even otherwise also, imposition of penalty under section 271D is not valid as the Assessing Officer while completing the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hus, once, the Assessing Officer treats the amount in question as assessee s income, he cannot treat the same as loan for invoking the provisions of section 269SS r/w section 271D. It is further evident, when the proceeding for imposition of penalty under section 271D, was initiated and the penalty order was passed under the said provision assessee s appeal against the addition made under section 68 of the Act was still pending before the learned Commissioner (Appeals) as he disposed off assessee s appeal deleting the addition made under section 68 of the Act only on 11th February 2013. Thus, before the disposal of appeal, the addition made by the Assessing Officer stood and as per which the amount of ₹ 17,25,000 was income of the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns of the Act. A conjoint reading of sections 269SS, 271D and 273B of the Act would demonstrate that every violation under section 269SS will not culminate in imposition of penalty under section 271D. If the assessee proves that there was reasonable cause for non compliance to the relevant provision, then penalty cannot be imposed. In other words, in a given case, if assessee shows reasonable cause for the failure, Assessing Officer is empowered under the Act to refrain from imposing penalty. In the present case after considering the explanation of the assessee in the context of facts and material on record, we are of the firm view that the assessee has proved that there was reasonable cause for accepting the cash loans. Further, the author ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
