Tribunal cancels Rs. 4,78,000 penalty under Income Tax Act for 2013-14 due to clerical error The Tribunal allowed the appeal, canceling the penalty of Rs. 4,78,000 imposed under section 271D of the Income Tax Act, 1961 for the Assessment Year ...
Cases where this provision is explicitly mentioned in the judgment/order text; may not be exhaustive. To view the complete list of cases mentioning this section, Click here.
Provisions expressly mentioned in the judgment/order text.
Tribunal cancels Rs. 4,78,000 penalty under Income Tax Act for 2013-14 due to clerical error
The Tribunal allowed the appeal, canceling the penalty of Rs. 4,78,000 imposed under section 271D of the Income Tax Act, 1961 for the Assessment Year 2013-14. The decision was based on the establishment of a reasonable cause for the clerical error in depositing the loan amount, which was promptly rectified.
Issues: - Appeal against penalty u/s. 271D of the Income Tax Act, 1961 for AY 2013-14.
Analysis: The appeal was filed against the penalty imposed under section 271D of the Income Tax Act, 1961 for the Assessment Year 2013-14. The Assessing Officer found that the assessee borrowed unsecured loans from related parties, contravening Section 269SS of the Act. The assessee explained that a clerical error led to a loan being credited to the wrong account, which was rectified promptly by transferring the amount to the correct account the next day. The Assessing Officer, however, did not accept this explanation and levied the penalty.
The Commissioner of Income Tax (Appeals) upheld the penalty, stating that the assessee failed to prove that the related party was indeed a sister concern. The appellant argued that the cash deposited was from a sister concern, and the error in the account number was rectified immediately. Supporting documents, including bank certificates and income tax returns, were presented to substantiate the claim.
Upon careful consideration, the Tribunal noted that while the cash deposit violated Section 269SS, the penalty under Section 271D required the absence of a reasonable cause. The Tribunal found that the error in the bank account number was promptly rectified, and sufficient evidence was provided to support the genuineness of the transaction. Therefore, the Tribunal concluded that there was a reasonable cause for the error and canceled the penalty levied under section 271D.
In conclusion, the Tribunal allowed the appeal, canceling the penalty of Rs. 4,78,000 imposed under section 271D of the Income Tax Act, 1961 for the Assessment Year 2013-14. The decision was based on the establishment of a reasonable cause for the clerical error in depositing the loan amount, which was promptly rectified.
Full Summary is available for active users!
Note: It is a system-generated summary and is for quick reference only.
TaxTMI 
of 
TaxTMI 
