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of <h1>Court dismisses appeal, upholds Tribunal's decision to delete penalties under Income Tax Act. Intent and good faith crucial.</h1> <h3>Commissioner of Income Tax-I, Chandigarh Versus Shri Waheguru Singh</h3> The High Court dismissed the appeal under Section 260A of the Income Tax Act, affirming the Tribunal's decision to delete penalties imposed under section ... Penalty u/s 271E - repayment of cash loan in violation of Section 269T - assessee did not act deliberately in defiance of law and his conduct was not dishonest, neither he acted in conscious disregard of its obligation, since the transactions were genuine and entered due to business exigency - this breach was a venial breach and flows from a bonafide belief. Therefore, the assessee was not liable to the penalties Issues:Appeal under Section 260A of the Income Tax Act, 1961 against penalties imposed under section 271E for cash loan repayment in violation of Section 269T.Analysis:The case involved an appeal by the Revenue under Section 260A of the Income Tax Act, 1961 against the order of the Income Tax Appellate Tribunal regarding penalties imposed under section 271E for cash loan repayment in violation of Section 269T. The substantial question of law proposed was whether the ITAT was justified in deleting the penalties imposed. The Assessing Officer initiated penalty proceedings under Section 271E based on the allegation that the assessee had made repayment of a cash loan in violation of Section 269T. The CIT (A) upheld the penalty, but the Tribunal set it aside, stating that the assessee did not act deliberately in defiance of the law and that the transactions were genuine and entered into due to business exigency. The Tribunal found that the breach of provisions was venial and flowed from a bonafide belief, thus holding the assessee not liable for penalties.The High Court, consisting of ADARSH KUMAR GOEL and L. N. MITTAL JJ., noted that the Tribunal's finding was a finding of fact, and no substantial question of law arose from it. The court, therefore, dismissed the appeal, affirming the Tribunal's decision to delete the penalties imposed under section 271E. The judgment highlighted the importance of genuine transactions and bonafide beliefs in determining liability for penalties under the Income Tax Act, emphasizing that deliberate defiance of the law was a crucial factor in penalty imposition.
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