TaxTMI 
TaxTMI 
2017 (7) TMI 68
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....ak on 2.3.2009 from out of cash balance available in his proprietary concern namely M/s Punit Yarn Agency. It was contended that this fact was brought to the Assessing Officer in the course of assessment proceedings and therefore it is not the case of undisclosed income finding it's way through loan or deposit as envisaged in the provision of section 269SS and 269T of the Act. It was also contended that the amount was paid by the assessee to his wife to enable her to clear her personal obligation on urgent basis. It was also contended that the assessee was under bona fide belief that the provisions of Sec. 269T have no application to the funds made available to his wife under family expediency. However, Assessing Officer rejected the contention of the assessee and passed order u/s 271E levying penalty of Rs. 2,05,000/- for the contravention of the provisions of Sec. 269T of the Act. 3. The assessee preferred an appeal before the Commissioner of Income Tax (Appeals) and the Commissioner of Income Tax (Appeals) sustained the penalty levied by the Assessing Officer holding that the contention of the assessee that he has re-paid the loan to his wife in cash to meet the personal outs....
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.... It was further contended that since this amount was paid by the assessee to his wife to enable her to clear her personal obligations on an urgent basis, the assessee was under bona fide belief that the provision of Sec. 269T are not attracted to funds made available to his wife as the transaction is between husband and wife only. It was also contended that there is reasonable cause in repaying the loan by the assessee to his wife. 7. However, the authorities below rejected this contention of the assessee and penalty was sustained. We have noted that the transactions in this is not cause of paying transactions between assessee of his wife the amount was not undisclosed but it was generated by the assessee in his business which had already suffered tax. The contention of the assessee that since the transaction was between himself and his wife he was under the bona fide impression that provisions of Sec. 269T are not attracted cannot be brushed aside. We also find reasonable cause in payment of the amount in cash by the assessee to his wife as this amount was to be utilized for discharging her debts on an emergency basis. 8. The Pune Bench of Tribunal in the case of M/s Deepali....
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....o be imposed upon him. Taken to the logical conclusion in so far as the present controversy is concerned, it is open to the respondent-assessee, in the present case, to establish a reasonable cause for having not complied with the provisions of section 269SS of the Act (in the case of I. T. A. No. 777 of 2008) and section 269T of the Act (in the case of I. T. A. No. 778 of 2008). If an assessee successfully discharges the aforesaid obligations, then it is open to him to raise a claim that he should be excused from the consequential penal effect. 11. The explanation tendered by the respondent-assessee which has been taken into consideration by the Income-tax Appellate Tribunal was that the action of the respondent-assessee was bona fide and not aimed at avoiding any tax liability. So far as the instant issue is concerned, the Income-tax Appellate Tribunal arrived at the conclusion that the action of the respondent-assessee had not resulted in the infraction of any law, inasmuch as, the default committed by him was technical and venial in nature. The Income-tax Appellate Tribunal also expressed the view that no prejudice was caused to the Revenue, inasmuch as, there was no a....
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....missions advanced by the learned counsel for the rival parties, we are of the view that the finding that there was reasonable cause shown by the respondent-assessee, is a finding of fact. This emerges from the decision rendered by this court in Saini Medical Store's case [2005] 277 ITR 420, wherein, this court has, inter alia, held as under (page 425) : "As pointed out earlier, there is no doubt about the genuineness of the transactions which have been fully accepted in the assessment made for the year under consideration. Even if, there is any ignorance, which resulted in the infraction of law, the default is technical and venial which did not prejudice the interests of the Revenue as no tax avoidance or tax evasion was involved. To my mind, bonafide belief coupled with the genuineness of the transactions would constitute reasonable cause under section 273B for not invoking the provisions of section 271E of the Act. The impugned order of penalty is cancelled. The findings of the Commissioner of Income-tax (Appeals) have been confirmed in appeal by the Tribunal. Therefore, the findings recorded by the Commissioner of Income-tax (Appeals) and the Tribu....
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....with any provision referred thereto, the penalty for its violation shall not be imposable on the assessee. 12. In the present case, the Commissioner of Income-tax (Appeals) while deleting the penalty in its order dated January 18, 1999, had accepted the explanation of the assessee that breach of the provisions of the Act was on account of bona fide belief of the assessee and the same was not with any intention to avoid or evade the tax. The observations of the Commissioner of Income-tax (Appeals) in paras. 6 and 6.1 are relevant and are reproduced as under : "6. I have carefully considered the conspectus of this matter and facts on record. No loss of revenue has occurred in this case and the genuineness of the transaction has not been doubted. The apex court in Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26 had long ago settled the law that penalty is not to be ordinarily imposed unless the party either acted deliberately in defiance of law and was guilty of conduct contumacious or dishonest or acted in conscious disregard of its obligations. Penalty will also not be imposed merely because it is lawful to do so. Whether penalty should be imposed for fail....