Love Shoppers Ltd Vs ACIT (ITAT Ahmedabad)
ITAT Ahmedabad held that penalty under section 271D of the Income Tax Act leviable for contravention of provisions of section 269SS on failure to establish any reasonable cause for taking cash loans.
Facts- The penalty in the present case has been levied by the Assessing Officer under Section 271D of the Act for contravention of the provisions of Section 269SS of the Act, accepting loans and advances beyond the prescribed limit through modes other than by way of account payee cheques. In the present case, the contravention of the provisions of Section 269SS of the Act took place on account of accepting cash loans from the director of the assessee-company Shri Kamal Sonwani on various dates, amounting in all to Rs.13,25,000/-.
Conclusion- Held that the assessee was unable to establish any reasonable cause for taking cash loans also so as to escape from the levy of penalty under Section 271D of the Act in view of Section 273B of the Act.
In the absence of any case made out by the learned Counsel for the assessee to escape from the rigors of Section 269SS/271D of the Act, we dismiss the appeal of the assessee and uphold the order of the learned CIT(A) confirming levy of penalty under Section 271D of the Act of Rs.13,25,000/-.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
Present appeal has been filed by the assessee against order of the learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)” for short] dated 26.08.2021 passed under Section 250 of the Income Tax Act, 1961 [hereinafter referred to as “the Act” for short], confirming the levy of penalty under Section 271D of the Act, for the Assessment Year (AY) 2016-17.
2. The assessee has challenged the levy of penalty raising the following grounds:-
“1. The Ld. CIT(A) has erred in law and on facts in confirming the penalty of Rs.13,25,000/- u/s 271D of the Act for the alleged contravention of the provisions of Section 269SS of the Act without proper consideration and appreciation of the facts and the submissions. In view of the elaborate submission coupled with the legal decisions relied upon in support thereof, the penalty of Rs.13,25,000/- u/s 271D of the Act is required to be deleted.
2. The Ld. CIT(A) has erred in law and on facts in not following the legal ratio laid down in various legal decisions relied upon, which is squarely applicable to the case of the assessee company. The Ld. CIT(A) ought to have allowed the appeal of the assessee based on the legal decisions relied upon.”
3. As transpires from the orders of the authorities below, the penalty in the present case has been levied by the Assessing Officer under Section 271D of the Act for contravention of the provisions of Section 269SS of the Act, accepting loans and advances beyond the prescribed limit through modes other than by way of account payee cheques. In the present case, the contravention of the provisions of Section 269SS of the Act took place on account of accepting cash loans from the director of the assessee-company Shri Kamal Sonwani on various dates, amounting in all to Rs.13,25,000/-, as per the details reproduced in page No.3 of the CIT(A)’s order as under:-
