2025 (1) TMI 382

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.... dated 30.09.2019 passed under s. 271E of the Act pertaining to Assessment Year 2016-17. 2. As per grounds of appeal, the assessee has challenged the imposition of penalty by invoking the provision of s. 271E of the Act on account of alleged default of s. 269T of the Act while making repayment of loans by journal entries /book entries to the partners. 3. Briefly stated, the Assessing Officer ("AO") noticed from the Tax Audit Report that the assessee has made repayments of loans/deposits of INR 2,31,51,640/- in modes other than account payee cheque or account payee draft or other specified modes which the AO presumed to be repayment in cash in violation of s.269T of the Act. In response to the show cause notice issued towards proposed levy....

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....ssessing Authority under s. 271B of the Act in the matter of levy penalty as provided under s. 271E of the Act. Under s. 273B where an authority or Court finds that there was a reasonable and sufficient cause for not imposing penalty on the assessee in the given facts and circumstances of the case, penalty shall not be levied as an automatic incidence. Therefore, the levy of penalty under s. 271E is not mandatory but directory in nature. 6.1. The Co-ordinate Bench of Tribunal in Shrepak Enterprises vs DCIT (1998) 64 ITD 300 (AHD) order dated 20.05.1997 has observed that payment by partner to firm is a payment to self is not a loan or deposit contemplated under s. 269SS of the Act and consequently, penalty under s. 271D is not attracted. By....