2005 (11) TMI 213

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....f assessment proceedings, it was found by the AO that the assessee had accepted cash deposits in contravention of provisions of s. 269SS in the following cases: ------------------------------------------------ SL. Name of the Party   Dated       Cash Deposit No. ------------------------------------------------ 1.  Shri Khubi Lal    16.10.1990    Rs. 25,000   2.  Shri Shyam Lal    12.07.1980    Rs. 20,000   3.  Shri Gautam Kumar 17.10.1990    Rs. 25,000     Kothari   4.  Shri Manohar Lal  14.07.1990    Rs. 20,000  &n....

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....he loans and deposits were taken which meant that the assessee was not in need of any funds for the immediate purpose but the loans were accepted due to ignorance of law. The affidavit of Shri Narayan Lal Menaria, advocate, was also placed on record confirming that at no point of time he made any instructions or conveyed the position of law to the assessee with regard to the restriction on accepting the loans and advances in cash otherwise than by account payee cheques. Not accepting the assessee's submissions, the AO imposed penalty of Rs. 2,40,000 under s. 271D of the Act, which came to be deleted in the first appeal. 3. We have heard the rival submissions and perused the relevant material on record. There is no dispute about the fact ....

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....bligation. It was further held that whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute. This decision has been applied by the Hon'ble jurisdictional High Court in the case of CIT vs. Superintending Engineer, Udaipur (2002) 177 CTR (Raj) 586 : (2003) 260 IT....