Penalty under section 271D deleted by ITAT, aligning with legal principles and precedents.

The ITAT dismissed the Revenue's appeal and affirmed the CIT(A)'s decision to delete the penalty under section 271D. The decision was based on consistent legal principles and precedents indicating that penalties should not apply to transactions conducted through journal entries, aligning with previous ITAT rulings and a judgment of the Hon'ble Delhi High Court in a similar case.

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Issues:
Levy of penalty under section 271D for receiving loans in violation of Section 269SS through journal entries.

Analysis:
The appeal dealt with the issue of the Revenue contesting the levy of penalty under section 271D for the receipt of loans in contravention of Section 269SS through journal entries. The Additional Commissioner had imposed a penalty of Rs.10,26,14,128 on the assessee for receiving loans without account payee cheques or drafts. The assessee argued that the transactions were made through journal entries and did not violate Section 269SS. The CIT(A) considered the assessee's submissions and previous ITAT decisions, ultimately deleting the penalty.

The CIT(A) reviewed the facts of the transactions involving Nakshatra Software Pvt. Ltd. and Panther Industrial Products Ltd., emphasizing that the transactions were through bank entries and not in contravention of Section 269SS. The CIT(A) referred to previous ITAT orders in the assessee's cases for A.Y. 1999-2000 and A.Y. 2003-04, where penalties under section 271D were deleted for transactions through journal entries. The CIT(A) upheld the deletion of penalty based on these precedents and legal principles.

The Revenue argued that the issue was pending before the Hon'ble Bombay High Court and claimed that the transactions fell under the provisions of section 269SS, justifying the penalty under section 271D. However, the ITAT upheld the CIT(A)'s decision, citing consistent rulings that no penalty should be levied for transactions conducted through journal entries. The ITAT also referenced the judgment of the Hon'ble Delhi High Court in the case of Noida Toll Bridge Co. Ltd. to support their decision.

In conclusion, the ITAT dismissed the Revenue's appeal, affirming the CIT(A)'s order to delete the penalty under section 271D. The decision was based on the consistent application of legal principles and precedents establishing that penalties should not be imposed for transactions conducted through journal entries, in line with previous ITAT decisions and the judgment of the Hon'ble Delhi High Court in a related case.

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