ACIT Vs Shri Sunil Ramnarayan Mantri (ITAT Pune)
This case involves an appeal filed by the Assistant Commissioner of Income Tax (ACIT) against an order from the Commissioner of Income Tax (Appeals) [CIT(A)] for the Assessment Year (AY) 2016-17. The appeal challenged the deletion of a penalty of ₹48,64,586 levied on the assessee, Shri Sunil Ramnarayan Mantri, under Section 271E of the Income Tax Act, 1961. The penalty was imposed for an alleged contravention of Section 269T, which restricts cash repayment of loans. The assessee also filed a cross-objection, challenging the validity of the penalty proceedings themselves on several grounds.
Background of the Case
The assessee, an individual, had his assessment completed under Section 143(3) of the Act, which resulted in some additions to his income. Subsequently, a revenue audit flagged that the assessee had repaid a loan of ₹46,65,980 in cash, in violation of Section 269T. Based on this audit objection, the Assessing Officer (AO) initiated penalty proceedings and levied the aforementioned penalty under Section 271E. The CIT(A), however, sided with the assessee and deleted the penalty, leading the Revenue to file an appeal with the Income Tax Appellate Tribunal (ITAT).
The Primary Dispute: Low Tax Effect and CBDT Circulars
