2017 (5) TMI 1693

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....ed in deleting the penalty of Rs. 82,56,589/- levied u/s. 271D by holding that the transfer by way of book entries was bonafide and was not to evade taxes specifically when accordingly to section 269SS deposit/loan of money cannot be accepted otherwise then by an account payee cheque/draft? (2) Whether the Tribunal was legally justified in upholding the findings of the CIT(A) and deleting the penalty levied u/s.271D by interpreting section 269SS that it would not apply to journal entries passed the books of accounts? (3) Whether the Tribunal was legally justified in deleting the penalty of Rs. 82,56,589/- levied u/s. 271D specifically when assessee failed to establish any reasonable cause for violation of provisions of Sec....

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....re dismissed. Ground No.4 This ground is general in nature and does not require any adjudication." 4. The Tribunal in para 2.5 has held as under: "2.5 We have heard the rival contentions and perused the materials available on record. It is noted from the the record that the Addl. CIT, Kota had imposed the penalty of Rs. 82,56,589 /- u/s 271D of the Act on the assessee for accepting loans/ deposits in violation of provisions of Section 269SS of the Act. Before coming to any conclusion, it will in the interest of justice to take into consideration the following provisions of Section 269SS of the Act that the assessee had actually violated this provision and the Addl. CIT, Kota had imposed the penalty u/s 271D of ....

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.... other institution, association or body or class of institutions, associations or bodies which the Central Government may, for reasons to be recorded in writing, notify85 in this behalf in the Official Gazette: 86[Provided further that the provisions of this section shall not apply to any loan or deposit where the person from whom the loan or deposit is taken or accepted and the person by whom the loan or deposit taken or accepted are both having agricultural income and neither of them has any income chargeable to tax under this Act.] Explanation- For the purposes of this section,- 87[(i) "banking company" means a company to which the Banking Regulation Act, 1949 (10 of 1949), applies ad includes any bank or banki....