TaxTMI 
TaxTMI 
2019 (10) TMI 1063
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....r. 2. On the facts and circumstances of the case, the CIT (A) has erred in approving the penalty order u/s 271E of the IT Act passed by the Addl. CIT-Range, Sikar on dated 27.02.2015 without appreciating the facts that repayment of Rs. 6,71,250/- made in cash by the assessee to his family members were found genuine by Assessing Officer in his assessment order passed u/s 143(3) of the IT Act and no additions were made thereon. 3. On the facts and circumstances of the case, the CIT (A) has erred in approving the penalty order u/s 271E of the IT Act passed by the Addl. CIT-Range, Sikar on dated 27.02.2015 without appreciating the facts that repayment of Rs. 6,71,250/- made in cash by the assessee to his family members were his real cousin brothers/uncle and having only agriculture income, no PAN NO. and no bank a/c. 4. On the facts and circumstances of the case, the CIT (A) has erred in approving the penalty order u/s 271E of the IT Act passed by the Addl. CIT-Range, Sikar on dated 27.02.2015 without appreciating the facts that repayment of Rs. 6,71,250/- made in cash by the assessee to his family members was taken as a capital contribution as per joint vent....
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.... agreement dated 4th January, 2011 for doing the business of sale of liquor under the said License to be allotted in the name of the assessee. The assessee further explained that all the three persons are agriculturists and not having any bank account, therefore, the amount was received in cash and also repaid in cash. The ld. CIT (A) did not accept the contention of the assessee and consequently confirmed the levy of penalty under section 271D and 271E while passing the impugned order. 3. Before the Tribunal, the ld. A/R of the assessee has submitted that the AO has not disputed the genuineness of the transaction and even not initiated the penalty proceedings in the assessment order. He, however, further submitted that since the money was collected for a specific purpose and it was in contravention by all the parties, therefore, it is not falling in the category of loan or advance sought as to in contravention of provisions of section 269SS and 269T of the Act. Thus the ld. A/R has submitted that even the said sum taken by the assessee from his close relatives is exempt under section 56 of the Act. He has referred to the affidavits of all the three persons declaring that they w....
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....are agriculturists and having no other income than the agricultural income. The AO has not disputed the fact that the assessee has received these amounts from these agriculturists and also repaid the same to them in cash. The assessee has filed the affidavits of these three persons wherein they have affirmed on oath that they are not having any PAN or any bank account in their names. Once this fact of not having any PAN and bank account by these three close relatives of the assessee is not in dispute, then the receipt of the amount and repayment of the same in cash falls in the exception as the transaction cannot be completed through banking channel, as well as in the category of reasonable and bonafide explanation under section 273B of the Act. The Hon'ble Punjab & Haryana High Court in case of CIT vs. Sunil Kumar Goel (supra) has considered this issue in para 11 to 14 as under :- "11. The explanation tendered by the respondent-assessee which has been taken into consideration by the Income-tax Appellate Tribunal was that the action of the respondent-assessee was bona fide and not aimed at avoiding any tax liability. So far as the instant issue is concerned, the Income-....
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....the submission of the learned counsel for the appellant-revenue, that in the facts and circumstances of the present case, the respondent-assessee, could not be deemed to have established a reasonable cause for not abiding by the provisions of sections 269SS and 269T of the Act. 13. Having given our thoughtful consideration to the submissions advanced by the learned counsel for the rival parties, we are of the view that the finding that there was reasonable cause shown by the respondent-assessee, is a finding of fact. This emerges from the decision rendered by this Court in Saini Medical Stores' case (supra), wherein, this Court has inter alia held as under:- "6.1 'As pointed out earlier, there is no doubt about the genuineness of the transactions which have been fully accepted in the assessment made for the year under consideration. Even if, there is any ignorance, which resulted in the infraction of law, the default is technical and venial which did not prejudice the interests of the revenue as no tax avoidance or tax evasion was involved. To my mind, bona fide belief coupled with the genuineness of the transactions would constitute reasonable cause under....