The Pune Bench of Income Tax Appellate Tribunal (ITAT) has upheld the penalty imposed under Section 271E as the repayment of loan in cash had exceeded Rs. 20,000.
In the instant case assessee Kacharu Madhukar Shinde had undergone assessment under section 143(3) read with 147 Income Tax Act 1961, assessing the total income at Rs.1,71,950/-. During the assessment proceedings, the Assessing Officer (AO) observed that the assessee had repaid loan in cash exceeding Rs.20,000/- aggregating to Rs.5,90,644/-. The AO referred the case to the Joint Commissioner of Income Tax (JCIT). The JCIT after giving opportunity to the assessee, passed the order under section 271E levying penalty of Rs.5,90,644/-.
Section 271E of the Income Tax Act 1961 deals with the imposition of penalty if any person repeats the deposit mentioned under Section 261 of the Act, then he shall be liable to pay a penalty equal to the amount deposited.
Section 261 of the Income Tax Act 1961 says that No branch of a banking company or a co-operative bank and no other company or co-operative society and no firm or other person shall repay any loan or deposit made with it otherwise than by an account payee cheque or account payee bank draft drawn in the name of the person who has made the loan or deposit if the amount of the loan or deposit together with the interest, if any, payable.
Prasad S. Bhandari on behalf of appellant contended that he was ignorant about the provisions of Section 269T r.w.s. 271E of the IT Act referring to Hon’ble Income Tax Appellate Tribunal (ITAT) Amritsar bench decision in the case of Ajit Singh Rana vs. ACIT that ignorance of law could not be a reasonable cause for failure to file an audit report and for not levying penalty. He further submitted that the payment by appellant was bonafide .
Ramnath P Murkunde ON BEHALF OF REVENUE SUBMITTED THAT THE appellant had undisputedly admitted the repayment of loan in cash otherwise than by account payee cheque or account payee Bank draft and appellant had also failed to establish the immediate and urgent need of making payment in cash.
The Pune Bench of Dipak P Rippotte (Accountant Member) and S S Godara(Judicial Member) held that the assessee was liable for penalty u/s 271E and uphold the penalty u/s 271E as the assessee had repaid loan in cash in excess of Rs.20,000/- and also had not submitted any sufficient cause for such payment. The bench dismissed the appeal of the assessee.
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to TaxscanAdFree. Follow us on Telegram for quick updates.
