Repayment of capital to the partners in the form of uncrossed cheque would not be liable to penalty u/s 269T

ITO Vs M/s Universal Associates (ITAT Ahemedabad) – Considering the facts of the case in the light of the above decisions, we are of the view that the at least the assessee has been able to explain reasonable cause for failure to comply with the provisions of law. The ex-partners have introduced their capital in the assessee firm and on retirement they were given their amount back through bearer cheques and, therefore, the assessee is able to prove that it had reasonable cause for failure to comply with the provisions of law.

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