Case Law Details
Anamallais Bus Transports P Ltd Vs PCIT (Madras High Court)
Introduction: The Madras High Court, in the matter of Anamallais Bus Transports P Ltd vs. PCIT, has issued a directive challenging the penalty proceedings under Section 271-E of the Income Tax Act. The court’s preliminary view suggests a lack of cash transactions, prompting a reevaluation by the Appellate Authority.
This writ petition challenges the order dated 09.10.2023, asserting that the petitioner, Anamallais Bus Transports P Ltd, faced unjust penalty proceedings. The company had extended a sum of Rs.14,00,00,000/- to M/s. Shakti Sugar Ltd, prompting repayments to other entities. The court, upon examination, finds no violation of the Income Tax Act.
Background: The petitioner contends that despite clear indications in audited accounts of no cash transactions, the Assessing Officer imposed a penalty under Section 271-E. The petitioner filed an appeal, but the Appellate Authority demanded a 20% deposit. This led to the filing of the present writ petition.
Court’s Observation: The court observes that the transactions between the petitioner and M/s. Shakti Sugar Ltd, resulting in the reduction of liabilities, were in accordance with the law. It notes that the Assessing Officer assumed a cash transaction, leading to the incorrect imposition of penalties. The court holds a prima facie view that the penalty proceedings should be set aside.
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