Tax penalty under section 271(E) deleted for 2008-09 assessment year, upheld by Tribunal.

The Tribunal upheld the Commissioner of Income-tax (Appeals)' decision to delete the penalty under section 271(E) for the assessment year 2008-09. The evidence showed repayments were made through cheques, not in violation of statutory provisions. The Revenue's appeal was dismissed on January 21, 2015.

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Issues:
Appeal against deletion of penalty under section 271(E) of the Income-tax Act, 1961 for assessment year 2008-09.

Analysis:

Issue 1: Deletion of Penalty under Section 271(E)
The Department appealed against the deletion of penalty under section 271(E) by the Commissioner of Income-tax (Appeals). The assessee, a registered society, purchased land using funds from individuals and repaid the amount in cash, triggering penalty provisions. The Additional Director of Income-tax imposed a penalty under section 271(E) after finding discrepancies in the repayment details. The assessee contended that repayments were made through account payee cheques, supported by bank statements and confirmations. The Commissioner of Income-tax (Appeals) reviewed the evidence and concluded that the repayments were indeed made through cheques, overturning the penalty. The Tribunal upheld this decision, emphasizing the credibility of primary documents like bank statements over book entries. The Tribunal found no violation of section 269T, leading to the deletion of the penalty.

Issue 2: Entertaining Additional Evidence
The Department alleged that the Commissioner of Income-tax (Appeals) entertained additional evidence without providing an opportunity to the assessing authority. However, during the hearing, no specific additional evidence was identified by the Department. Upon examination, no evidence supporting the Department's claim was found. Consequently, the Tribunal dismissed this ground as lacking merit, leading to the dismissal of the Revenue's appeal.

In conclusion, the Tribunal upheld the decision of the Commissioner of Income-tax (Appeals) to delete the penalty under section 271(E) for the assessment year 2008-09, as the evidence supported the assessee's contention of repayments through cheques and no violation of statutory provisions was established. The appeal by the Revenue was dismissed, and the order was pronounced on January 21, 2015.

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