The Income Tax Appellate Tribunal (ITAT), New Delhi Bench, has recently, in an appeal filed before it, upheld the penalty u/s 271D, when the company couldn’t prove that cash loan was taken for urgent disbursal of salary.
The aforesaid observation was made by the Delhi ITAT when an appeal was filed before it by the assesseePlanman HR Pvt. Ltd, as against the order of the CIT(A), New Delhi, dated 29.06.2017.
The ground of the assessee’s appeal being that the on the facts and circumstances of the case the CIT(A) has erred both on facts and in law, in confirming the penalty ofRs. 15 ,60 ,000/- being loan received in cash, by treating the same as contravention of provisions of Section 269SS, the facts pertaining to the issue were that during the assessment proceedings, the AO happened to notice that the appellant violated the provisions of section 269SS by accepting loan of Rs. 15,60 ,000/- in cash from “M/s. Centre for vocation and Entrepreneurship Study”.
The Add. CIT, Range-20, New Delhi,being informed by the AO of the said violation of provisions of Section 269 SS of the Income Tax Act for taking action u/s 271D of the Income Tax Act, he, afterthe issual of notice u/s 274 read with Section 271D of the Income Tax Act to the appellant, levied penalty u/s 271D of the Rs. 15,60,000/-, vide order dated 11.08.2016.
Aggrieved by the penalty order, the assessee filed appeal before the CIT(A), who, after considering the submissions of the assessee,affirmed the order signed by Sh. Sarab jeet Singh, Addl. CIT, Range-20. And it is being aggrieved by the said affirmation, that the assessee has preferred the instant appeal before the Delhi ITAT.
Hearing thecontentions of Sh. Sanjay Nargas, the Sr. DR, with no representation being made on behalf of the assessee, as well as perusing the materials available on record, the ITAT Panel comprising of Yogesh Kumar US, the Judicial Member, along with Dr. B. R. R. Kumar, the Accountant Member noted:
“We have also gone through the judgments quoted by the ld. AR in his paper book at page no. 41 to 43. In the instant case, we find that though the assessee argued that the cash loan has been taken for urgent disbursal of the salary, the same fact could not be brought on record that the salary has been indeed paid from the loans taken.”
Thus, dismissing the assessee’s appeal the Delhi ITAT held:
“The assessee could not prove the fact of payment of salary subsequent to the receipt of loan and hence, we decline to interfere with the order of the ld. CIT(A)”.
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