Rajasthan High Court affirms Tribunal's decision on penalty remand & adjustment under section 269SS

The High Court of Rajasthan upheld the Income-tax Appellate Tribunal's decision to remand the matter for recalculating the penalty. The Tribunal's order was deemed legal, and the Deputy Commissioner was directed to adjust the permissible amount under section 269SS. Both appeals were disposed of accordingly.

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Issues: Whether the Tribunal was justified in directing recalculation of penalty under section 271D only on the amount accepted during the year in excess of Rs. 20,000 and in remanding the matter to the Deputy Commissioner.

Analysis: The appeal turned on the interaction between section 269SS, which governs the mode of taking or accepting loans and deposits, and section 271D, which provides for penalty for failure to comply with section 269SS. The Court held that where a loan transaction exceeds Rs. 20,000, the permissible amount of Rs. 20,000 has to be adjusted while computing the penalty. The Tribunal's direction to remand the matter for fresh calculation of penalty after giving the assessee a reasonable opportunity of being heard was found to be innocuous and in accordance with law.

Conclusion: The Tribunal's order was upheld and no interference was called for; the penalty was to be recalculated after allowing the adjustment of Rs. 20,000 under section 269SS.

Ratio Decidendi: In computing penalty for violation of section 269SS, the permissible threshold of Rs. 20,000 must be given effect to, and a remand for fresh calculation after hearing the assessee is legally valid.

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