The ITAT allowed the appeal and set aside the penalty under...

The ITAT allowed the appeal and set aside the penalty under s.271F of the Act (Rs.5,000) imposed for non-filing of the original return under s.139(1). The Tribunal found the assessee to be a non-resident, the USD 1,200,000 transaction to be a foreign loan for US business properly evidenced by US bank records and a promissory note, and no part of the sum was remitted to or utilized in India. The transaction had been substantively examined in the assessment of another person and the addition in the present case was protective. Applying s.273B, the ITAT held there was reasonable cause and bona fide belief; therefore the penalty was unsustainable and deleted.

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