The Bangalore bench of the Income Tax Appellate Tribunal (ITAT) has deleted a penalty under section 271DA of the Income Tax Act, 1961 by holding that the cash receipt of less than two lakh rupees from different persons on different dates would not attract section 269ST of the Act.
The Assessing Officer, during the assessment proceedings against the assessee, M/s Balaji Auto Enterprises Mysore Limited, observed that as per Form No.61A, report provided by the ITO(I & CI), the assessee company had received cash in excess of Rs.2.00/- from four different persons in contravention of provision of sec.269ST of the Act.Since as per the opinion of the AO, the assessee has received cash more than Rs.2.00/- from parties accordingly he has violated provision of sec 269ST , therefore, the assessee is laible for penalty and accordingly the AO has imposed the penalty u/s271DA for violation of sec.269ST of the Act.
The assessee explained that it received more than Rs.2 lakhs form 4 parties but not in single instance. He produced copy of ledger of the 4 parties and also submitted that the cash was received towards booking of car, accessories, payment of insurance and other items , which is clear from the copy of the ledger account produced.
After hearing both sides, a bench of Shri Beena Pillai, Judicial Member and Shri Laxmi Prasad Sahu, Accountant Member observed that “perusing entire materials on record and after examining the orders of the lower authorities, we observe from the order of the AO that the assessee has received cash more than 2.00/- from the four parties on different dates. As per the opinion of the AO the assessee has violated the provision of section 269ST, therefore, he imposed the penalty u/s 271DA of the Act. On going through the copy of the ledger, it has been observed that the assessee has not received cash more thanRs.2.00/- in a day from one party.”
After analyzing the provisions of section 269ST of the Income Tax Act, 1961, the Tribunal held that “as per the above section, it is clear that the assessee’s case does not fall under this section. Hence, penalty cannot be levied.”
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