2018 (4) TMI 525

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.... assessment year 1999-2000. The above tax case appeal has been admitted on the following substantial questions of law : "1. Whether, on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in upholding the penalty under Section 271D of the Income Tax Act, 1961 ? and 2. Whether, on the facts and in the circumstances of the case, the decision of the Income Tax Appellate Tribunal upholding the penalty under Section 271D of the Income Tax Act, 1961 is perverse, since it was without any material and without any finding, rebutting the factual findings of the Commissioner of Income Tax (Appeals) that the transactions relating to purchase of raw materials and none of the transactions related ....

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....e transactions relating to the purchases made on raw materials and did not relate to advancing or advance being made of a loan or a deposit and that the provisions of Section 269SS of the said Act were not attracted. 6. Aggrieved by the order of the Commissioner of Income Tax (Appeals), the Department preferred an appeal before the Income Tax Appellate Tribunal, which was taken on file as I.T.A.No.74/Mds/2006. The Tribunal issued several notices to the assessee and the case was adjourned for nearly a year. Further, the assessee did not appear before the Tribunal, but remained absent and therefore, the assessee was set ex parte and the Tribunal decided the matter on merits. By the impugned order, the Tribunal allowed the appeal filed by t....

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....ct, a report has been submitted by the Additional Commissioner of Income Tax dated 31.8.2005. This report has been taken note of by the Commissioner of Income Tax (Appeals) while passing the order dated 30.9.2005. But unfortunately, we find that there is no discussion as to why such a report should be ignored. 9. Furthermore, the transactions with six parties have been considered by the Commissioner of Income Tax (Appeals). But, nowhere in the order, there is any finding to the effect that raw materials supplied by those six parties were shown as cash in the books of accounts of the assessee. Therefore, we find that the Tribunal was fully justified in holding that the Commissioner of Income Tax (Appeals) erroneously held that the transac....