TaxTMI 
TaxTMI 
2011 (4) TMI 1299
X X X X Extracts X X X X
X X X X Extracts X X X X
....the assessment year 2002-03, claiming the following substantial questions of law:- (1) Whether on facts and circumstances of the case the order of the Tribunal confirming the penalty under Section 271D for Rs. 1,70,000/- was perverse? (2) Whether the order of the Tribunal confirming penalty u/s 271D was justified in a case where there was no finding of any malafide or evasion of tax? (3) Whether the Tribunal was right in upholding the penalty u/s 271D when the genuineness of the transaction was not in dispute? (4) Whether the imposition of penalty u/s 271D merely for technical mistake can be sustained? (5) Whether, on the facts and circumstances of the case, there was reasonable cause for the ass....
X X X X Extracts X X X X
X X X X Extracts X X X X
....enalty of Rs. 1,70,000/-. Hence, the present appeal by the assessee. 3. We have heard learned counsel for the parties. 4. Learned counsel for the assessee submitted that the Tribunal was in error in confirming the penalty under Section 271D amounting to Rs. 1,70,000/- for alleged violation of the provisions of Section 269SS of the Act. According to the learned counsel, the payment which was made by Smt. Kamla Devi Sethia to the assessee was necessitated in the given circumstances and there existed reasonable cause for the same within the meaning of the provisions of Section 273B of the Act. Reliance has been placed on the following judgments:- I. Asst. Director of Inspection (Investigation) v. Kum. A.B. Shanthi, [2002] 255 ITR 258; ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....SS of the Act. It was recorded:- "It is important to note that another provision, namely, section 273B was also incorporated which provides that notwithstanding anything contained in the provisions of section 271D, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provision if he proves that there was reasonable cause for such failure and if the assessee proves that there was reasonable cause for failure to take a loan otherwise than by account-payee cheque or accountpayee demand draft, then the penalty may not be levied. Therefore, undue hardship is very much mitigated by the inclusion of section 273B in the Act. If there was a genuine and bona fide transaction....
X X X X Extracts X X X X
X X X X Extracts X X X X
....pany at Chandigarh through on line facility available with the banker. The amount so received was utilized for clearing the cheques issued to the creditors. The CIT(A) had concluded that the transaction was genuine and bonafide and there was no loss to the revenue as there was no evasion of tax. The transaction had also been accepted to be genuine during the assessment proceedings. At this stage, it would be expedient to reproduce the findings recorded by the CIT(A) while allowing the appeal of the assessee in paras 5, 9 and 11, which read thus:- "5. I find force in the argument of the ld. A.R. that the object of the provisions being unearthing of unaccounted money, the same are not applicable to a transaction which is done in an o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... also be well to recall that there is no presumption that everybody knows the law [Padampat Sugar Mills Co. Ltd. vs. State of UP & Ors. (1979) 1128 ITR 326 (SC)]. Section 273B of the Act, enacts provisions of overriding nature and provides that notwithstanding anything contained in section 271D no penalty shall be imposable if the assessee proves that there was reasonable cause for accepting the loan or deposit beyond the prescribed monetary limit in cash. The words 'reasonable cause' have not been defined under the Act but they could receive the same interpretation which is given to the expression 'sufficient cause'. Therefore, in the context of the penalty provisions, the words 'reasonable cause' would mean a cause....