TMI Blog2021 (3) TMI 427X X X X Extracts X X X X X X X X Extracts X X X X ..... nd deposited in his bank account. The drafts were prepared favouring the HUDA and ultimately the same have been deposited by them. The receipts are in the names of Mrs. Sujata and Shri Dushyant of the equivalent amount. Receipts of HUDA in favour of Shri Dushyant are also placed on record. These facts would clearly disclose that assessee has reasonable cause for failure to comply with provisions of law contained u/s 271D - Further, while passing the assessment order dated 21.03.2014 the AO did not disbelieve the explanation of the assessee as regards receipt of cash from these two neighbours and issue of drafts for these two neighbours and ultimate payment to HUDA. The AO did not record any satisfaction in the assessment order for contra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yee cheque/draft in contravention of provisions of section 269SS of the Act. The assessee in response to show-cause notice filed a reply which was not accepted by AO, hence, penalty u/s 271D of the Act was imposed. The Ld. CIT(A) dismissed the appeal of assessee. 4. Ld. Counsel for assessee submitted that assessee has maintained account with IDBI Bank, Bahadurgarh. Ms. Sujata and Shri Dushyant are the neighbours of the assessee and known to assessee for many years. They have no bank account and have purchased property and they have to make payment to HUDA for development charges which could be made only through demand draft and requested to help them. They have given cash to the assessee through which drafts were prepared in their names ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received the amount and deposited in his bank account. The drafts were prepared favouring the HUDA and ultimately the same have been deposited by them. The receipts are in the names of Mrs. Sujata and Shri Dushyant of the equivalent amount. The receipts of HUDA in favour of Shri Dushyant are also placed on record. These facts would clearly disclose that assessee has reasonable cause for failure to comply with provisions of law contained u/s 271D of the I.T. Act. Further, while passing the assessment order dated 21.03.2014 the AO did not disbelieve the explanation of the assessee as regards receipt of cash from these two neighbours and issue of drafts for these two neighbours and ultimate payment to HUDA. The AO did not record any satisfacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On further appeals: Held, dismissing the appeals, that in the fresh assessment order there was no satisfaction recorded regarding penalty proceedings under section 271D of the Act though in that order the Assessing Officer wanted penalty proceedings to be initiated u/s 271(1)(c) of the Act. Thus, the penalty u/s 271D was without any satisfaction and, therefore, no such penalty could be levied. 8. Considering the above, in the light of the judgment of Supreme Court above, it is clear that assessee has reasonable cause for failure to comply with provisions of law and that no satisfaction has been recorded by the AO in the assessment order, would clearly show that no penalty is leviable in the matter. 9. In view of the ab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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