DCIT Vs Subramaniam Thanu (ITAT Chennai)
The Chennai Bench of the Income Tax Appellate Tribunal (ITAT) dismissed the Revenue’s appeals against the orders of the Commissioner of Income Tax (Appeals), who had deleted penalties imposed under Sections 271D and 271E of the Income-tax Act for Assessment Years 2015-16 and 2016-17. Since the facts and issues were identical, the Tribunal decided the appeals through a common order. The assessee’s cross-objections were also dismissed as infructuous after the Tribunal upheld the relief granted by the CIT(A).
The assessee was subjected to a search under Section 132 on 30.09.2015. After filing the return of income, the case was selected for scrutiny, and the assessment was completed under Section 143(3) on 30.12.2017 after additions relating to unexplained interest paid and unexplained cash expenses. During assessment, the Assessing Officer initiated penalty proceedings only under Section 271(1)(c). Subsequently, by letter dated 15.03.2021, the Assessing Officer informed the appropriate authority that the assessee had accepted cash loans of ₹17 crore in violation of Section 269SS and requested initiation of penalty proceedings under Section 271D. Separate proceedings were also initiated under Section 271E on the ground that interest payments in cash violated Section 269T. After issuing show-cause notices and rejecting the assessee’s explanations, the appropriate authority levied penalties under Sections 271D and 271E.
