2019 (4) TMI 209

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....ssessee in this appeal is that the ld. CIT(A) erred in confirming the penalty of Rs. 4,50,000/- u/s 271D of the Act. 3. Brief facts qua the issue are that during the previous year relevant to the assessment year under dispute, the assessee had received an amount of Rs. 4,50,000/- on various dates from the funds of Ranjit Roy (HUF), his own H.U.F. , which consists a sum of Rs. 3.50,000/- as opening balance, thus sum of Rs, 8,00,000/-(4,50,000 + 3,50,000) was outstanding as on 31-03-2011. According to the ld. Assessing Officer, such acceptance of the amount of Rs. 4,50,000/- in cash from Ranjit Roy (HUF) had infringed the provisions of section 269SS of the Income Tax Act and accordingly, he imposed penalty of Rs. 4,50,000/- u/s 271D of the A....

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....y other person" in the context of introduction of this section means persons who are not intimately or not very closely connected to the assessee. Therefore, the active director of the assessee-company was clearly not covered by the expression "any other person" occurring in section 269SS [DILLU CINE ENTERPRISES (P.) LTD - VS- ADDL. C.I.T. (2002) 80 ITD 484 (HYD)]. In other words, the expression "any other person" appearing in s. 269SS of the Act means persons who are not closely connected with the assessee. We note that where transactions had taken place with closely related persons in the family. i.e. wife, minor children and H.U.F. and the genuineness of the transactions are not doubted, it was held that penalty could not be levied u/s.....

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.... thoroughly unfounded in the circumstances and based on unconnected considerations not relevant to the issue in dispute which is untenable in law and accordingly, such specious action in that respect cannot survive for judicial scrutiny and the ld. Commissioner (Appeals) was absolutely wrong in upholding such impugned levy in a preposterous manner without appreciating the facts and circumstances of the instant case in the proper perspective and acted beyond the pale of law. 8. Our view is fortified by the judgment of the Co-ordinate Bench of this Tribunal in the case of Abhijit Saha in I.T.A. No. 198/Kol/2015 for assessment year 2009- 10 order dated 24.05.2017 wherein it was held as follows: "3. At the outset itself, the Ld. Counsel for....

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.... High Court in the case of CIT Vs. Manoj Lalwani (2003) 260 ITR 590; (2003) Tax LR 290) (raj), wherein it was held that when loan in cash has been taken in view of urgent need connected with export, Tribunal was justified in deleting the penalty u/s. 271D. We also find force in the argument taken by the learned counsel for the assessee that assessee being a layman was not aware of the provisions of the Act as such, the default, if any, was attributable to ignorance of statutory provisions of the act. The assessee's case finds support from the decision of the Delhi Tribunal in the case of Farrukhabad Investment (I) Ltd. V. JCIT (2003) 85 ITR 230 (Del) where the professional auditors, experts in the field of taxation, did not point out any vi....