TaxTMI 
TaxTMI 
2023 (7) TMI 271
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....Act, 1961 (hereinafter referred to as 'the Act') relating to the Assessment Year (A.Y) 2017-18. 2. The brief facts of the case is that the assessee is an individual and engaged in the business of repairing of gold/silver ornaments. For the Assessment Year 2017-18, the assessee filed its Return of Income on 29.03.2018 declaring total income of Rs. 4,82,280/-. The assessee's case was selected for scrutiny assessment, since cash deposits were made during demonetization period. The assessee was asked to furnish source of cash deposit alongwith documentary evidences and copy of the bank statements. The assessee replied that the cash deposit is out of his sale proceeds of residential flats and his income from repairing of gold/silver ornaments. ....
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.... held that as per the explanation to Section 269SS, "specified sum" means any sum of money receivable in relation to transfer of an immovable property also. In this case, undisputedly, the assessee has received a sum of Rs. 7,93,000/- in cash as sale consideration for transferring the immovable property which is clear violation of the provisions of section 269SS of the Act. The assessee has not demonstrated any "reasonable cause" for violation of the above provisions of law. Therefore Ld. NFAC confirmed the levy of penalty u/s. 271D of the Act of Rs. 7,93,000/-. 5. Aggrieved against the same, the assessee is in appeal before us raising elaborate grounds of appeal, which are argumentative in nature. However the solitary issue is violating t....
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....nt order accepting the Returned Income without making any additions. Thus, the grievance made out by the assessee is found to be genuine and reasonable cause. In the above circumstances, the levy of penalty under Section 271D in our considered opinion is unwarranted. 7.1. For better understanding of the provisions and "reasonable cause", section 271D and 273B are extracted below: 271D. Penalty for failure to comply with the provisions of section 269SS. (1) If a person takes or accepts any loan or deposit or specified sum in contravention of the provisions of section 269SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit or specified sum so taken or accepted. (2) Any penalty imposable und....
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....mbiguously made it clear that no penalty "shall be" imposed, if the assessee "proves that there was a reasonable cause for the said failure". As noticed, if the statutory provision shows that the word "shall" has been used in Section 271D, then the imposition of penalty would have been mandatory. Section 273B as noted further throws light on the legislative intent, as it specifically provides that no penalty "shall" be imposed, if the assessee proves "that there was reasonable cause for the said failure". 8. Further the Jurisdictional High Court in the case of Maa Khodiyar Construction (cited supra) held that no penalty is leviable u/s. 271D for cash loans exceeding Rs. 20,000/- from agriculturists living in remote areas when transaction w....
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....on the part of the assessee, the reasonable cause needs to be shown. What is pleaded by the respondent was that all these persons were agriculturists and that the genuineness of the transactions at no point of time had been doubted by the Revenue. They stayed in remote areas. Both the authorities, therefore, were of the opinion that reasonable cause had been sufficiently made out and when the very transactions were never doubted by the Revenue authorities. The breach is to be treated as a mere technical or venial breach. 13. We notice that the requirement of Section 273B is for the assessee to prove that there was a reasonable cause for its having failed to abide by the provisions of Section 269SS. As emerges from the record, not only the....
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....e'. Therefore, in the context of the penalty provisions, the words 'reasonable cause' would mean a cause which is beyond the control of the assessee. 'Reasonable cause' obviously means a cause which prevents a reasonable man of ordinary prudence acting under normal circumstances, without negligence or inaction or want of bona fides. Before imposition of penalty under section 271, the Assessing Officer must be satisfied, not arbitrarily but judiciously, that the assessee has without reasonable cause failed to comply with the provisions. 23. In the instant case, as noticed above, there is no finding of the assessing authority, the appellate authority or the Tribunal that the transaction made by the assessee in breach of ....