AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 1428
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....Reasonable cause and sufficient cause had explained and consequently the penalty order passed in the name of the appellant is opposed to law and thus liable to be cancelled. 4. Without prejudice, the learned assessing officer levying penalty ought to have appreciated that the provisions of Sec. 269SS of the Act were not acceptable to the case of the appellant and consequently the penalty under sec 271D was not eligible. 5. The learned assessing officer ought to have appreciated the amount received was only the sale consideration at the time of registration and part of the sale consideration and it is neither a loan nor an advance. 6. The learned assessing officer ought to have appreciated that the receipt could not even fall within the specified sum provided under sec 269SS of the Act since the payment did not take the colour from advance. " 7. The learned assessing officer ought to have appreciated the cash payments received as advance or, in the nature of advance then there could be violation of sec. 269SS and not on the final payment made at the time of registration and consequently the penalty under sec. 271D of the Act is not eligible. ....
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....ct against the appellant. Reasonable Cause and Sufficient Cause decided by the under mentioned decided case: IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD "B" BENCH Before: Smt. Annapurna Gupta, Accountant Member and Shri T.R. Senthil Kumar, Judicial Member ITA No. 195/Ahd/2022 Assessment Year 2017-18 Narendra kumar Chunilal So ni,Nana Ubhada, Viramgam, Ahmedabad-382150 PAN: ANEPS3522J (Appellant) Vs The Joint Commissioner of Income Tax Range- 3(2), Ahmedabad (Respondent) AND The Hon'ble Jharkhand High Court in the case of OMEC Engineers (cited supra) interpreted the expression 'sufficient cause' in the context of levy of penalty and deleted. Jurisdictional High Court of Gujaratin the case of Maa Khodiyar Construction (cited supra) held that no penalty is leviable u/s. 271D of IT Act, 1961. 15. If penalty have been waived off under the principle of Natural Justice, there will not be any loss of revenue to the Department. Hence, your Appellant prays before your Hon'ble Authority and to direct the Assessing Authority to drop the penalty proceedings in ....
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.... decided on merits after hearing the parties. (3) 'Every day's delay must be explained' does not mean that a pedantic approach should be made. Why not every hour's delay, every second's delay? The doctrine must be applied in a rational, commonsense and pragmatic manner. (4) When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to have vested right in injustice being done because of a nondeliberate delay. (5) There is no presumption that delay is occasioned deliberately, or on account of culpable negligence, or on account of mala fides. A litigant does not stand to benefit by resorting to delay. In fact, he runs a serious risk. (6) It must be grasped that the judiciary is respected not on account of its power to legalize injustice on technical grounds but because it is capable of removing injustice and is expected to do so. 4.2 When substantial justice and technical consideration are pitted against each other, the cause of substantial justice deserves to be preferred, for the other side cannot claim to hav....
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....ale proceeds of immovable properties and the claim of the assessee is correct and accordingly completed the assessment. 5.1 Thereafter in accordance with the provisions of section 274 of the Act, a show cause notice u/s 271D of the Act was issued and served on 20.3.2020 and assessee was asked to explain why an order imposing a penalty u/s 271D of the Act should not be imposed for the contravention of the provision of section 269SS of the Act. However, the assessee had not responded to the show cause notice. The AO in absence of any submission issued another show cause notices on 14.6.2021 and 21.1.2022. However, again the assessee had not responded to any of the notices. Accordingly, the AO held that it is a fit case for imposition of penalty u/s 271D of the Act amounting to Rs. 10,32,000/- as the assessee for the reasons best known to him chosen to remain silent to the various statutory/show cause notices without offering any explanation. Aggrieved by the penalty order dated 17.2.2022 passed u/s 271D of the Act, the assessee preferred an appeal before the ld. CIT(A)/NFAC. 5.2 The ld. CIT(A)/NFAC dismissed the appeal of the assessee by observing that the assessee sold two imm....
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....from the sale proceeds of two immovable properties on 22.3.2017, the AO after considering assessee's explanation also found that deposits are out of the sale proceeds of immovable properties only and accordingly completed the assessment. We are of the considered opinion that there is no dispute on the amount of money received by the assessee in the impugned transaction on sale of property. Therefore, the genuineness of the transaction is clearly established. 7.1 The purpose of introduction of section 269SS of the Act was discussed in the judgement of Hon'ble Allahabad High Court in the case of Dimple Yadav reported in 379 ITR 177 (All.), wherein the Court considered the recourse of section 271D of the Act and also the provisions of section 273B of the Act to hold as under: "6. The short question that arises for consideration is, whether any penalty could be imposed under Section 271D of the Act? 7. The learned counsel for the department contended that the unsecured loan, which was more than Rs. 20,000/- taken by the assessee from a political party should have been taken by a cheque or a demand draft through banking channels, which had not been done. The....
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....f - (a) the amount of such loan or deposit or specified sum or the aggregate amount of such loan, deposit and specified sum; or (b) on the date of taking or accepting such loan or deposit or specified sum, any loan or deposit or specified sum taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), the amount or the aggregate amount remaining unpaid; or (c) the amount or the aggregate amount referred to in clause (a) together with the amount or the aggregate amount referred to in clause (b), is twenty thousand rupees or more: Provided that the provisions of this section shall not apply to any loan or deposit or specified sum taken or accepted from, or any loan or deposit or specified sum taken or accepted by, - (a) the Government; (b) any banking company, post office savings bank or co-operative bank; (c) any corporation established by a Central, State or Provincial Act; (d) any Government company as defined in clause (45) of section 2 of the Companies Act, 2013 (18 of 2013); (e) such other institution, association or body or class of in....
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....the said failure.' 10. The object of introducing Section 269SS of the Act was to ensure that a tax payer was not allowed to give false explanation for his unaccounted money or if the tax payer made some false entries, he would not escape by giving false explanation for the same. It was found that during the search and seizure, unaccounted money was found and the tax payer usually gave an explanation that he had borrowed or received deposits from his relatives or friends and, consequently, it became easy for the so called lender to manipulate his record to suit the plea of the tax payer. In order to curb this menace, Section 269SS of the Act was introduced to do away with the menace of making false entries in the account books and later give an explanation for the same. Section 269SS of the Act consequently, required that no person shall take or accept any loan or deposit, if it exceeds more than Rs. 20,000/- in cash. 11. Section 271D of the Act provided that a person who takes or accepts any loan or deposit in contravention of the provision of Section 269SS of the Act, he would be liable to pay by way of penalty a sum equal to the amount of the loan or deposit....
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....ent. ..... " 15. In the instant case, we find that the Tribunal has given a categorical finding that the assessee had established a reasonable cause for failure to comply with the provision of Section 269SS of the Act. The Tribunal further found that the loan given by the Samajwadi Party was a genuine loan, which was reflected in the books of accounts on account of the Samajwadi Party as well as in the books of account of the assessee and that the cash given by the party was deposited in the bank of the assessee and, thereafter, used for the purpose of converting the nazul land into free hold. The Tribunal found that the genuineness of the transaction was also not disputed by the Assessing Officer. 16. In the light of the aforesaid, we find that even though the assessee had taken a loan in cash, nonetheless, the loan transaction was a genuine transaction and was routed through the bank account of the assessee which clearly shows the bona fides of the assessee. The cash given by the lender was not unaccounted money but was duly reflected in their books of account. The Assessing Officer also accepted the explanation and found the transaction to be genuine. The conte....
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.... cause to take a loan otherwise than by account payee cheque or draft and b) Transaction is Bonafide. 7.4 If assessee does not fulfil both of these tests of reasonable cause, assessee fails to substantiate with evidences, Bonafide not of taking/accepting the sales consideration in cash and he was unable to procure the sales consideration by account payee cheque or account payee demand draft. 7.5 Section 273B starts with a non obstante clause and provides that notwithstanding anything contained in several provisions enumerated therein including section 271D, no penalty shall be imposable on the person or the assessee, as the case may be, for failure referred to in the said provisions, if he proves that there was reasonable cause for the said failure. A clause beginning with notwithstanding anything' is sometimes appended to a section in the beginning with a view to give the enacting part of the section in case of conflict, an over-riding effect over the provision or Act mentioned in the non obstante clause - Orient Paper & Industries Ltd. v. State of Orissa AIR 1991 SC 672. A non obstante clause may be used as a legislative device to modify the ambit of the provis....