Penalty not to be imposed unless Assessee acted deliberately in defiance of law

Assessee had contravened the provisions of section 269T of the Act during the financial year 1992-93 relevant to the assessment year 1993-94 by making repayment of loan/deposits in cash to 7 Persons of Rs. 2,30,400/-.  DCIT vide order dated August 20, 1998. levied penalty of Rs. 1,71,800 which was equal to the amounts repaid in cash by the assessee-firm.

On appeal CIT (Appeals) while deleting the penalty in

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