Section 271D penalty fails where no clear contravention of section 269SS is established and cash transactions are bona fide explained.

Penalty under section 271D for alleged breach of section 269SS was deleted because the record did not establish a clear contravention and the assessee had furnished details of the cash receipts during assessment. The Tribunal held that a mere different view of the material is not enough to sustain penalty, and that penalty cannot stand where the explanation for the cash transactions is bona fide and no definite finding of violation is recorded by the Assessing Officer. On those facts, the statutory basis for penalty failed and relief was granted to the assessee.

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Issues: Whether the penalty imposed under section 271D for alleged contravention of section 269SS was sustainable.

Analysis: The assessee had furnished the relevant details regarding cash receipts during the assessment proceedings. The Tribunal noted that a mere different view on the material could not by itself justify penalty under section 271D. It further observed that, on the facts, the Assessing Officer had not recorded a clear finding establishing violation of section 269SS. Reliance was placed on the principle that penalty under section 271D cannot be sustained in the absence of a demonstrated contravention of section 269SS and where the explanation shows a bona fide basis for the cash transactions.

Conclusion: The penalty under section 271D was not sustainable and was deleted in favour of the assessee.

Ratio Decidendi: Penalty under section 271D cannot be upheld unless there is a clear finding of contravention of section 269SS on the material on record; where the transactions are explained on a bona fide basis and no such violation is established, the penalty fails.

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