Section 271D & 271E Penalty Not Leviable for Bona Fide Cash Loans from Agriculturists: ITAT Mumbai

Advertisement Chemfert Traders (Bombay) Pvt. Ltd. Vs ACIT 1(1) (ITAT Mumbai) The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) allowed the assessee’s appeals and deleted penalties levied under Sections 271D and 271E of the Income-tax Act, 1961. The Tribunal held that where cash loans were accepted from and repaid to agriculturists who had no bank accounts, the transactions were bona fide, undertaken out of business necessity, and not intended to evade tax. Consequently, the assessee had established a reasonable cause under Section 273B, making the penalties unsustainable. T...