Penalty Against Agriculturist for Accepting Loan Through Banking Channel u/s 269SS of IT Act, 1961: ITAT [Read Order]

The Ahmedabad bench of the Income Tax Appellate Tribunal (ITAT) has held that no penalty can be levied against an agriculturist for accepting a loan of more than Rs. 20,000/- in cash if the loan is received through a banking channel.

The assessee, Vijayaben G Zalavadia, is an agriculturist. The assessee received a loan of Rs. 1,70,000/- from The Berna Gamni Seva Sahkari Mandali Ltd. (the society). The AO and the CIT(A) held that the assessee had violated Section 269SS of the ITA because the loan was not received through the banking channel.

The assessee contended that the assessee's bank statement proved the loan was genuinely obtained through a banking channel. Additionally, the assessee provided a document from the society attesting to the fact that the loan was truly obtained through a banking channel and the tax authorities did not cast any doubt on the bank statement or the other documented proof that was provided by the assessee.

The revenue authorities claimed that a banking channel was not used to get the loan and the bank statement did not demonstrate that the loan money was moved from the society's account to the assessee's account and revenue contended that the society's certificate was unreliable.

The Tribunal observed that the assessee submitted a bank statement and a certificate from the society confirming the loan was received through a banking channel. The revenue authorities did not doubt the bank statement or other documentary evidence.

The Single Bench Member Suchitra Kamble (Judicial Member)  held that the revenue authorities had not discharged their burden of proof to show that the loan was not received through the banking channel and held that the penalty levied under Section 271D of the ITA was not sustainable in the absence of any reasonable doubt about the genuineness of the loan transaction.

Suggested Image: Documentary evidence/ Bank Statement      

Suggested Keywords: Income Tax Appellate Tribunal (ITAT), Section 269SS of the Income Tax Act, 1961, Penalty under Section 271D, Loan received through banking channel, Agriculturist, Ahmedabad bench, Loan money, society’s certificate

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