2018 (6) TMI 104

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....The appeal relates to Assessment Year 1999-2000. 2. By the impugned order, the Tribunal has deleted penalty of Rs. 21,47,019/- imposed by the Assessing Officer under Section 271D of the Income Tax Act, 1961 (for short „the Act‟). 3. By order dated 12th July, 2006, present appeal was admitted for hearing on the following substantial question of law: "Whether the Tribunal was right in law in deleting the penalty of Rs. 21,47,019/- levied under Section 271D of the Income Tax Act by holding that the amount in issue was not a loan within the meaning of Section 269SS of the Act?" 4. The Assessing Officer in the penalty order had referred to the assessment order and thereupon had given his finding wherein the contenti....

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....ey to the imprest account that it was for the purpose of purchase of old manuscripts. Secondly, even if it is accepted that it was meant for the purchase of old manuscripts, it is all the more justified to levy penalty because the appellant utilized the funds not for the purchase of old manuscripts but for his personal benefits of making FDRs and earning interest on that. Purchase of old manuscripts on behalf of the Sadan as claimed by the appellant does not absolve him of having utilized the funds unauthorizedly and immorally for his personal purpose and benefits. Secondly, the explanation is not credible. The appellant failed to give the names and address of the persons from whom the manuscripts were purchased. It is not known which manus....

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....d at page no. 62 of assessee's paper book. The account is titled "imprest account" (Jain Sahitya Sadan), the description found therein also shows the receipts as for purchase of old manuscripts. As on 3/4/98 and (sic) amount of Rs. 6,50,000/- was received and on 20/6/98 a sum of Rs. 14,97,019/- under the heading "amount received from Jain Sahitya Sadan against imprest account" is duly recorded in this account. There is also some purchase of manuscripts which have been shown as a debit in this account. In the order of assessment passed by the AO while completing the block assessment there is a mention that the Inspector of Income Tax has also confirmed the plea as raised by the assessee on enquiry from Jain Sahitya Sadan. Thus it is clea....

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.... before us are therefore considered as superfluous. In conclusion were (sic) hold that there was no loan availed by the assessee in cash from Jain Sahitya Sadan. The imposition of penalty on the assumption that the assessee had availed of loan in cash from Jain Sahitya Sadan cannot be sustained. The same is therefore directed to be deleted. We do not wish to go into the other arguments that were put forth before us namely the arguments that even assuming there was a violation of provisions of S. 269 (SS) of the Act no penalty can be imposed as there is a reasonable cause in as much as the transactions are bonafide. For reasons stated above the appeal of the assessee is allowed. The penalty imposed is directed to be cancelled." 7. It is n....