TaxTMI 
TaxTMI 
2025 (11) TMI 893
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....efly the facts of the case are that during the course of assessment proceedings, the AO observed that the assessee-company has received a loan of Rs. 2 lakhs in cash from Shri Byju George, who is the Director of the assessee-company and necessary explanation was sought from the assessee-company and in its submission, the assessee-company submitted the loan confirmation, cash book and copy of return of income of Shri Byju George, substantiating the cash loan of Rs. 2 lakhs received by the assessee-company in its account maintained in Vasai Vikas Sahakari Bank Ltd. Though no addition was made in the hands of the assessee-company, the AO observed that by accepting the cash loan, the assessee-company had clearly violated the provisions of secti....
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....as taken on 31-03-2010 and was deposited in the assessee's bank account on the same date. It was submitted that the assessee-company had issued certain cheques to its vendors and the cash credit facility of the assessee was upto merely Rs. 1 crore which was already utilized. It was submitted that the Director of the assessee-company did not have bank account with Vasai Vikas Sahakari Bank Ltd., and, therefore, there was no option left but asking the Director to withdraw the cash from his bank account and deposit the same in assessee's bank on the same date. It was submitted that the said facts are affirmed oath by the Director of the assessee-company vide notarized affidavit dt. 11-06-2024. Further a copy of the loan sanction letter....
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....y so levied by the AO be directed to be deleted. 5. The submissions so filed by the assessee-company were considered, but not found acceptable to the Ld.CIT(A). As per the Ld.CIT(A), section 271D of the Act speaks "he shall be liable to pay". The word "Shall" has been used and not "may". It means that when there is contravention of section 269SS of the Act, penalty u/s. 271D of the Act is leviable and accordingly he confirmed the findings of the AO. Against the said findings, the assessee is in appeal before us. 6. During the course of hearing, the Ld.AR reiterated the submissions made before the authorities and further relied upon the written submissions the contents of which read as under: 1. The present appeal is against t....
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....nd the Hon CIT(A) has upheld such penalty, holding that the levy of penalty was mandatory considering the usage of the word "shall" and not "may" in the provision. The case of the lower authorities is that any failure to conform to the provisions of section 269SS would warrant compulsory levy of penalty u/s 271D of the Act. This is inspite of the fact that, during appeal proceedings, the appellant vide para 4 of his submission dt. 13.06.2024 (appearing on pg no.7 of the Hon. CIT(A) order) had brought to the attention of the Hon. CIT(A), the provisions of section 273B, which, on the existence of reasonable cause, mitigates the gravity of the offence and in such cases, penalty u/s 271D is not to be levied. 4. Appellant cover....