2021 (4) TMI 378

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....levied by the Jt. Commissioner of Income Tax, Range-20(3), Mumbai, under section 274 read with section 271D of the Act vide order dated 19.09.2016. 2. The only issue in this appeal of assessee is as regards to the order of CIT(A) confirming the levy of penalty under section 271D of the Act in regard to cash loan received from mother amounting to Rs. 3 lacs in violation of provision of Section 269SS of the Act. For this assessee has raised the following ground Nos.1 to 4:- "1. The impugned penalty order is illegal, invalid and void-ab0initio as the same is passed without issuing proper notice under section 274. 2. On the facts, in the circumstances of the case and law, the learned Commissioner of Income Tax Appeals (CIT-A) ahs erred in ....

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....ention to the fact that the assessee has not given any loan to Mrs. Krishna Agarwal. So, the impugned notice is factually wrong. However, the assessee has received temporary advances of Rs. 3,00,000/- from his mother Mrs. Krishna Agarwal by provision of Section 269SS of the Income Tax Act, 1961 are not applicable in view of the facts & circumstances of the case discussed herein after. We enclose herewith copy of account of Mrs. Krishna Agarwal, who is mother of the assessee. You may please find from the enclosed copy of account that mother has given temporary advances to her son as per her own convenience, without there being any necessity of accepting loans or advances from anyone for the business of the assessee. You may further appre....

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.... necessity for accepting the loans or advances from any one for the business of the assessee. We noted that this advance or loan of Rs. 3 lacs in cash is between blood relations i.e. mother and son. The mother has given this loan of Rs. 3 lacs to her son. We have gone through one of the decision of Hon'ble Madras High Court in the case of CIT v. M. Yesodha (Smt). (2013) 351 ITR 265 (Mad.), wherein it is held as under:- "7. We have carefully considered the submissions of learned standing counsel appearing for the appellant and the learned counsel appearing for the assessee. 8. Under Section 273B of the Income Tax Act, on 'reasonable cause' being shown, no penalty shall be imposable. As rightly pointed out by the learned counsel a....

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....e cheque or demand draft for some bona fide reason, the authority vested with the power to impose penalty has a discretion not to levy penalty. 11. Referring to the decision reported in [2006] 283 ITR 329 (Mad) (CIT V. Kundrathur Finance and Chit Co.), this Court in the decision reported in [2008] 303 itr 99 (Mad) (Commissioner of Income Tax V. Lakshmi Trust Company), held as follows: "In the instant case, the Commissioner of Income-tax (Appeals) and the Appellate Tribunal found on the facts that the transactions were genuine and the identity of the lenders was also satisfied. The Appellate Tribunal also upheld the order of the Commissioner of Income-tax (Appeals) that there was no intention on the part of the assessee to evade the tax.....