Shri Mohanlal Savjibhai Tilva Vs ACIT (ITAT Ahmedabad)
The case of the assessee was that the loan in cash was taken from his HUF on account of extreme business exigency and necessity of honouring post dated cheques issued to the third parties. Further at that time, the assessee was not having sufficient balance in the bank, which would otherwise attract provisions of Negotiable Instrument Act and therefore, he was in compelling situation taken the loan in cash from his own HUF. Besides, to prove the genuineness of the transactions, the assessee has filed Income Tax Returns, confirmation; contra ledger accounts. That apart the AO has neither doubted the impugned transaction nor any addition made in this behalf even under section 68 of the Act. Only the reason for the Revenue was that the receipt of the loan was in cash, which was in violation of section 269SS of the Act. Thus, the Revenue authorities imposed penalty, as if the provision of section 271D is mandatory, without considering the ‘reasonable cause’ explained by the assessee both during the penalty proceedings. We find that the explanation given by the assessee cannot be disregarded, more so, when it was a onetime affair to meet business exigency and urgent financial necessity. Further, the impugned transaction was from his individual capacity to his HUF capacity. A reasonable and justifiable explanation has been rendered by the assessee for the impugned transaction, and therefore, imposition of penalty under section 271D of the Act was not warranted.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
These four appeals are by the above two assessees against respective orders of even dated 9.5.2019 passed by the Commissioner of Income-tax (Appeals)-12, Ahmedabad relating to the Asst.Year 2012-13 & 2014-15 and Asst.Year 2013-14 & 2014-15 vide which the ld.CIT(A) has confirmed levy of penalty under section 271D of the Income Tax Act, 1961 (“the Act” for short) imposed by the AO. Since the sole issue raised in all these appeals is similar, for the sake convenience we dispose of all of them by this common order.
2. In these appeals, the assessees have challenged imposition of penalty under section 271D of the Act. The details are as follows:
