Penalty not to be imposed unless Assessee acted deliberately in defiance of law

Assessee had contravened the provisions of section 269T of the Act during the financial year 1992-93 relevant to the assessment year 1993-94 by making repayment of loan/deposits in cash to 7 Persons of Rs. 2,30,400/-.  DCIT vide order dated August 20, 1998. levied penalty of Rs. 1,71,800 which was equal to the amounts repaid in cash by the assessee-firm. On appeal CIT (Appeals) while deleting the penalty in its order dated January 18, 1999, had accepted the explanation of the assessee that breach of the provisions of the Act was on account of bona fide belief of the assessee and the same was...