- (1.) CHALLENGING the judgment of the Income -Tax Appellate Tribunal (hereinafter referred to as the Tribunal) dated June 08, 2012 by preferring present Tax Appeal under section 260 -A of the Income -Tax Act, 1961 (hereinafter referred to the Act), the Revenue has proposed the following substantial question of law: Whether Appellate Tribunal has erred in law and on facts in deleting penalty of Rs. 11,75,000 levied under section 271D of the Income Tax Act?
(2.) WE have heard learned counsel Mr. K.M. Parikh for the Revenue. The brief facts are as under: 3.1. The respondent -assessee for the assessment year 2006 -2007 declared in the return of income its income at Rs. 4,29,600. He is the proprietor of M/s. Fixo -Fitwell and engaged in the business of Contract for Natural Gas. The assessing officer on scrutiny assessment finalised his income at Rs. 17,00,000 by making certain additions under section 68 of the Act on account of unexplained cash credit. 3.2. The assessing officer issued notice under section 271D of the Income Tax Act, 1961 (hereinafter referred to as the Act) on the ground that the assessee had accepted the loan/deposit exceeding the sum of Rs. 20,000 in cash from Shri Ambika Finance and as this was in contravention of Section 269 -SS of the Act, the same would fetch penalty under section 271 -D of the Act and it, thus, levied penalty of Rs. 11,75,000. 3.3. Aggrieved by the same, when the Commissioner (Appeals) was approached, it confirmed partly the addition by deleting the sum of Rs. 11,75,000. 3.4. It deleted the penalty relying upon the decision in the case of Shreenath Builders v. Dy. CIT : (2000) 111 Taxman 142 (Ahd.)(Mag.). It also relied upon decisions of different High Courts for such deletion. 3.5. When the Tribunal was approached by the revenue challenging such deletion of penalty, it also concurred with the finding of the Commissioner (Appeals) holding that if there was reasonable cause for violation of provisions of Section 269 -SS of the Act, the penalty cannot be levied under section 271 -D of the Act.
(3.) IT is urged by the learned counsel that the assessee in return was taking cash loans from Shree Ambika Finance and when it had not established any pressing need for so doing it in violation of provisions of section 269 -SS of the Act, the penalty proceedings need to be invoked.;