2019 (3) TMI 91

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....re of Corrugated Boxes, e-filed its return of income for the AY. 2012-13 on 30-09-2012, admitting total income of Rs. 'NIL'. The assessment was completed u/s. 143(3) of the Income Tax Act [Act], accepting the assessee's returned income. Thereafter, the Assessing Officer issued a show cause notice for levy of penalty u/s. 271E of the Act for violating the provisions of Section 269T of the Act. 2.1. In response to the show cause notice, the assessee filed its reply dt. 03-12-2015 stating that the assessee has made the re-payment of loan in cash under the bonafide belief that repayment can be made in cash to the Directors of the company and also to reputed companies. It was submitted that it was not aimed at avoiding any tax liability and t....

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....l Commissioner of Income-tax, Range-3, Hyderabad. 2. The C.I.T. (Appeals) is not justified in not considering the submission made by the assessee that bona fide 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 I.T. Act, 1961, as held by the Hon'ble High Court of Delhi in the case of C.LT. Vs. Muthoot Financiers, reported in (2015) 371 ITR 408 (Delhi). 3. The C.I.T.(Appeals) is not justified in not considering the submission that the alleged contravention of Section 269T did not result in any unaccounted transaction and the said transactions were made under bona fide belief and were not made with a view to ....

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....E of the Act. In reply to the Assessing Officer's finding that the decision of the Hon'ble High Court of Delhi was in the case of transactions between assessee-firm and its partners and therefore is not applicable to the case on hand, the Ld. Counsel for the assessee submitted that the ratio laid down therein is applicable to the facts of the case before us also. He submitted that in the said case, the ratio laid down was that the creditworthiness of the partners and the genuineness of the transactions coupled with relationship with two persons and two different legal interpretations put forward, could constitute a reasonable cause for not invoking the provisions of Section 271D and 271E of the Act and that Section 273B would come to th....

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....e case and the reasonableness of assessee's explanation. The details of the loans repaid in cash are as under: S.No. Name Amount (Rs) 1 Sri Mohd. Imran Baig, PAN: ADDPM 3170 H 5,00,000 2 Sri Mohd. Irfan Baig, PAN: ABZPM 3780 B 5,00,000 3 Mahindra and Mahindra Financial Services (P) Ltd., 1,03,700 4 Tata Motors Finance Ltd., 1,14,359   5.1. From these details, we find that the first two persons are the Directors of the company and their identity is proved and the genuineness of the said payment is also not doubted by the Assessing Officer. As regards the other two parties, we find that assessee had taken vehicle loans and the repayment was made in cash and therefore, the genuineness ....

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.... do with evasion of tax or concealment of income. As rightly pointed by the CIT(A) himself, it may be a case of negligence. But a negligent person does not have any intention or means rea to purposely violate any provision of law so as to be visited with stringent punishment of heavy penalty." We find force in the argument of the Learned Counsel for the assessee that the object of the provisions being unearthing of unaccounted money, is not applicable to any transaction which is done in an open manner, which is genuine and in which no unaccounted money, is involved. Mere technical breach of the provisions, while the transactions are held to be genuine, do not attract the provisions of s. 269SS. It is not the case of the Revenue tha....