TaxTMI 
TaxTMI 
2014 (7) TMI 137
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.... the facts and circumstances of the case, the ITAT has erred in law in rejecting the Revenue's appeal against the decision of CIT (A) in dealing the penalty levied u/s. 271D of the Income-tax Act, even though the assessee is not covered by the exception to Section 269SS of the Act provided in second proviso to the said Section 269SS, as the assessee had taxable income under the Act and accepted cash exceeding the limit provided under the said Section 269SS ?" (B) "Whether 'genuineness of the loan/deposit' or 'bona fide nature of the loan/deposit transaction' is the criteria for examining the contravention of the provisions of Section 269SS of the Income Tax Act, 1961 for levying penalty u/s. 2....
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....ng on the decision of the Apex Court in case of Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 held that a technical or venial breach of provision cannot lead to levy of penalty, and therefore, set-aside the order of Assessing Officer mainly holding that none of the transactions had been doubted by the Revenue. Aggrieved, Revenue preferred appeal before the Tribunal which concurred with the decision of the CIT [A], and therefore, the present appeal raising aforementioned questions of law. It is contended by the Revenue that though the genuineness of the transactions had not been doubted and assuming that these agriculturists were residing in the remote areas that would not permit the respondent to make any breach of provisio....
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....lief that the loans accepted by it from directors and shareholders were not covered by the provisions of Section 269SS of the Act. In case of K.V George (supra), the Kerala High Court held that the burden is on the assessee to prove that there was reasonable cause for receiving cash from various persons. It was a case where the assessee had accepted loans exceeding the limit specified under the Act from certain creditors. When asked to explain the reasonable cause, the assessee had failed to explain the same and instead had stated that substantial amount was received from the creditors. Nothing was emerging as to why such amount was received by way of cash except that the assessee had to put up an industrial unit. In such factual matrix,....
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....ting the rigour of penalty u/s. 271D of the Act as consequence, on the part of the assessee, the reasonable cause needs to be shown. What is pleaded by the respondent was that all these persons were agriculturists and that the genuineness of the transactions at no point of time had been doubted by the Revenue. They stayed in remote areas. Both the authorities, therefore, were of the opinion that reasonable cause had been sufficiently made out and when the very transactions were never doubted by the Revenue authorities, the breach is to be treated as a mere technical or venial breach. We notice that the requirement of Section 273B is for the assessee to prove that there was a reasonable cause for its having failed to abide by the provisio....