Rajiv Manharlal Duseja Vs ACIT (ITAT Bangalore)
The Income Tax Appellate Tribunal (ITAT) Bangalore allowed the appeal filed by Rajiv Manharlal Duseja, challenging the penalty of ₹2.20 lakhs imposed for the assessment year 2007-08. The penalty was levied by the Additional Commissioner of Income Tax under section 271D of the Income Tax Act, 1961, for allegedly violating section 269SS by accepting cash loans totaling ₹2.20 lakhs from his father and paternal aunt.
The assessee argued that the loans were taken in installments and he believed that section 269SS applied only when individual cash borrowings exceeded ₹20,000. He further contended that transactions between family members should not attract the provisions of section 269SS, citing several judicial precedents. The ITAT relied on a similar case, Deepika vs. Addl CIT, where it was held that cash transactions between family members do not warrant a penalty under section 271D. The Tribunal also referred to decisions by the Punjab & Haryana High Court and the Madras High Court, which held that genuine family transactions, especially those disclosed in accounts and without tax evasion motives, constitute a “reasonable cause” under section 273B, thus exempting them from penalty under sections 271D and 271E.
The ITAT concluded that since the loans were taken from close family members and the genuineness of the transactions was not disputed by the Assessing Officer, the provisions of section 269SS were not applicable. Alternatively, the Tribunal found that there was a reasonable cause for accepting the loans in cash. Following the consistent view of its co-ordinate benches and various High Court decisions, the ITAT set aside the order of the Commissioner of Income Tax (Appeals) and directed the deletion of the penalty.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
