Penalty cannot be levied on bonafide transaction with no intention to evade tax and where default was of technical nature

CA Mayank Parekh Facts: The assessee company was engaged in the business of manufacturing and trading of fertilizers. Fertilizers manufactured by the assessee were sold to farmers and various farmers co-operative societies by salesman appointed by the assessee. On sudden requirement of the business the assessee during Assessment Year (‘AY’) 2003-04 obtained cash loans in excess of Rs 20,000 from various parties including relatives of salesman who were not having bank account. These loans were repaid in cash to the respective relatives of salesman during AY 2004-05. As the sums were in exce...