TaxTMI 
TaxTMI 
2025 (11) TMI 751
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....resent appeal is that once the assessing authority doubts the genuineness of the loan and treat it as an income under Section 68 of the Income Tax Act, for the same loan if it is reflected to have been repaid, can penalty be imposed in the subsequent year." 3. Brief facts necessary for adjudication of the matter are that appellant-assessee claims to be a trust registered under Society Registration Act 1860, created on 22.03.1996. It is pleaded that this trust is running a School in the name of Akal Academy, Village Tallewal and a B.Ed. College namely Brakkat College of Education at Village Tallewal. For Assessment Year 2008-2009, order dated 08.11.2010 was passed by the Income Tax Officer, Barnala wherein additions on two accounts was made. It was found that assessee was not entitled to exemption under Section 10(23C) (iiiad) of the Income Tax Act, 1961 (for short 'the Act') with genuineness of loans of Rs. 3,37,000/- and Rs. 79,784/- in favour of Akal Academy and Brakkat College of Education in cash from Golak of the Gurudwara of the Mohattmim not being proved. Said total amount of Rs. 36,86,342/- was treated to be income of assessee under Section 68 of the Act. Penalty under S....
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....transactions between the assessee-trust and Baba Sunder Singh Ji (Gurudwara) is proved. Merely because a particular sum was included as income of assessee under Section 68 of the Act does not erase the factum of repayment in cash which is duly admitted by assessee. Thus, both the defaults are separate and are liable to be proceeded against independently. It was urged that legislative intent of provisions in question is to deter cash transactions and promote transparency. Transaction in question was admittedly carried out between two separate legal entities and it is not open to the assessee to now take a stand that some of the amount had been treated to be income of the assessee under Section 68 of the Act, therefore the amount in question which as per assessee's own stand has been repaid in cash cannot be subject to penalty. It was argued that there is no substantial question of law involved for consideration in this matter and appeal should be dismissed being devoid of any merit. 7. We heard learned counsel for the parties at length and have carefully perused the file. 8. It is a matter of record that appellant had taken a plea of unsecured loan of Rs. 3,37,000/- in books o....
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....dated 30.06.2011, Annexure A-4 has duly noted the discrepancies in the two 2025.11.11 09:53 I attest to the accuracy and authenticity of this document Punjab and Haryana High Court, Chandigarh copies of accounts furnished before the Income Tax Officer, Barnala and has specifically held that there is a clear cut contravention of provisions of Section 269T of the Act and the penalty of Rs. 12,49,494/- (10,12,900+23594) was accordingly imposed. In the appeal filed by assessee before CIT(Appeals), Patiala, the grounds taken and as reproduced in para 3 of order dated 26.12.2013 read as under :- "03. In the memorandum of appeal the appellant has filed grounds of appeal as under :- 1. That the order of penalty, as it stands, is bad in law and against the fact of the case. 2. That the Ld. A.O. failed to appreciate that the provisions of section 269SS are not applicable in this case. 3. That the Ld. A.O. was not justified in levying the impugned as no satisfaction regarding commission of the offence was recorded in the order of assessment. 4. That the Ld. Assessing Officer was not justified in imposing penalty of Rs. 12,49,494/- u/s 271-E by arbi....
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....hat during the assessment proceeding, the appellant admitted the advance to be in the nature of loan. Therefore, I agree with the A.O. that repayment made in the garb of accommodating advances cannot absolve the appellant of the liability envisaged u/s 269 without a valid reasonable cause. The contention of the appellant in this regard is not acceptable. Therefore, the penalty levied by the A.O is upheld." Similar grounds of challenge were raised before the learned tribunal by the assessee as detailed in the 1st para of order dated 14.06.2016 which is not being reproduced for the sake of brevity. Learned tribunal on considering the entire facts and circumstances found no merit in the appeal filed by assessee and held as under:- "8. In the present case we find that admittedly during assessment proceedings the assessee filed copies of accounts of the impugned sums taken stating them as 'Loans Account'. The same are reproduced in the assessment order at para no. 11. Thus during assessment proceedings the assessee itself stated that the impugned sums were in the nature of loan. During penalty proceedings the assessee has characterized the same as accommodating advances' and we....