Itxa/2339/2011 Of The Commissioner Of Income Tax -Iv v. Suryawanshi Rajendra

sas IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL (LOD) NO.1083 OF 2011 The Commissioner of Income Tax-IV, Pune ..Appellant. V/s. Shri Suryawanshi Rajendra Sopanrao ..Respondent. Mr.Vimal Gupta for the appellant.None for the respondent. CORAM : J.P. DEVADHAR AND K.K. TATED, JJ. DATED : 4TH OCTOBER, 2011 P.C. :- 1.Whether the ITAT was justified in deleting the penalty levied under Section 271D of the Income Tax Act, 1961, is the question raised in this appeal. 2.The assessment year involved herein is AY 2003-04. 3.In the assessment year in question, the assessing officer noticed that the assessee had accepted loans or deposits amounting to Rs.20,000/- or more in cash instead of account payee cheque / draft as contemplated under Section 269SS of the Income Tax Act, 1961 (‘the Act’ for short). In view of the violation of Section 269SS, the assessing officer initiated penalty proceedings and levied penalty under Section 271D of the Act. The appeal filed by the assessee against levy of penalty was dismissed by CIT(A). 4.On further appeal filed by the assessee, the ITAT has deleted the penalty. Challenging the aforesaid order, the revenue has filed the present appeal. 5.Perusal of the order of ITAT, more particularly para 10 thereof, clearly shows that the ITAT has deleted the penalty on the following grounds:- (a)The assessee bonafide believed that the transactions were exempt from the requirements of Section 269SS of the Act because, the transaction was between the two entities controlled by the same person;exempt from the requirements of Section 269SS of the Act because, the transaction was between the two entities controlled by the same person; (b)There is no material to show that the transactions were carried out with intention to avoid or evade taxes;carried out with intention to avoid or evade taxes; (c)The decision of the Madras High Court in the case of CIT V/s. Idhayam Publications Ltd. reported in 285 ITR 221 (Mad) supports the above contention of the assessee; 6.In these circumstances, the ITAT held that there was reasonable cause shown by the assessee and, therefore, the penalty levied under Section 271D read with 273B of the Act are liable to be deleted. In our opinion, the decision of the ITAT is based on finding of fact and no question of law arises from the said order. The appeal is dismissed with no order as to costs. (K.K. TATED, J.) (J.P. DEVADHAR, J.)