Tribunal overturns penalty under section 271D, finds no violation of section 269SS.

The Tribunal allowed the Assessee's appeal, overturning the penalty imposed under section 271D for contravention of section 269SS. The Tribunal held that the amount received was not in violation of section 269SS, citing relevant High Court judgments supporting the Assessee's position.

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Issues:
1. Confirmation of penalty under section 271D of the Income Tax Act, 1961 for alleged contravention of provisions of section 269SS.
2. Validity of invoking section 269SS for accepting amount in current account transactions.
3. Legality of the order passed by the JCIT.

Analysis:
1. The appeal was filed against the order of the Commissioner of Income Tax (CIT(A)) confirming a penalty under section 271D for contravention of section 269SS. The appellant argued that as the receipt from the director was not a loan or deposit, section 269SS should not apply. The appellant contended that the lower authorities failed to recognize that the appellant did not violate section 269SS and had reasonable cause under section 273B, hence the penalty should be deleted. The Tribunal noted that the appellant accepted cash from the director, leading to the penalty imposition by the Assessing Officer (AO). The CIT(A) upheld the penalty, stating that any deposit or loan over Rs. 20,000 not through an account payee cheque or banking channel violates tax laws. The Tribunal allowed the appeal, citing judgments supporting the appellant's position.

2. The appellant argued that since the quantum appeal against an addition under section 68 was dismissed by the ITAT, the amount received was treated as the appellant company's income, and taxes were paid accordingly. The appellant relied on a judgment by the Jurisdictional High Court and the Madras High Court, which held that once an amount is taxed under section 68, it cannot be considered a violation of sections 269SS or 269T. The Tribunal, following the High Court judgments, allowed the appeal, emphasizing that the amount received was not in contravention of section 269SS.

3. The appellant contended that the order passed by the JCIT was illegal, invalid, and bad in law, seeking its annulment. However, the Tribunal did not provide a detailed analysis or ruling on this issue in the judgment.

In conclusion, the Tribunal allowed the appeal of the Assessee, overturning the penalty imposed under section 271D by holding that the amount received was not in contravention of section 269SS based on relevant High Court judgments.

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