Penalty u/s 271E mandatory due to repayment of loan in cash in excess of Rs. 20,000

Kacharu Madhukar Shinde Vs JCIT (ITAT Delhi)

ITAT Delhi held that penalty u/s 271E of the Income Tax Act leviable on account of repayment of loan in cash in excess of Rs. 20,000 vis-à-vis failure of assessee to prove that such payment is covered by exceptional circumstances covered under section 269T.

Facts- During the assessment proceedings, AO observed that assessee had re-paid loan in cash exceeding Rs.20,000/- aggregating to Rs.5,90,644/- during the F.Y.2009-10. The AO referred the case to the Ld. JCIT. The Ld. JCIT after giving opportunity to the assessee, passed the order under section 271E levied the penalty of Rs.5,90,644/-.

The assessee had accepted that repayment was made in cash. Aggrieved by the penalty order, the assessee filed an appeal before the ld.CIT(A). However, appeal was dismissed. Being aggrieved, the present appeal is filed.

Conclusion- The assessee failed to prove that the payments were made in some exceptional circumstances. As the assessee is not covered by any of the exceptions. Therefore, since the assessee has repaid loan in cash in excess of Rs.20,000/-, the assessee is liable for penalty u/s 271E. Hence, we uphold the penalty u/s 271E. Accordingly the grounds of appeal raised by the assessee are dismissed.

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