Penalty under section 271DA is eliminated by the ITAT since a party’s monetary deposit came from a distance.
facts and issue of the case
1. Briefly stated facts are that assessee submitted the return of income for the AY 2019-20 on 12.09.2019 declaring therein total income of Rs.1,29,07,990/-. Assessee is carrying on the business of breeding farm, hatchery, captive feed mills etc. As required under the provision of Sec. 44AB, assessee obtained the Tax Audit Report and submitted the same. In the Tax Audit Report, the Auditor has mentioned about the cash of Rs.2,04,000/- deposited on 04.07.2018 in the assessee’s Bank A/c bearing No. 40160101059286 at the branch of the Union Bank of India at Katlicherra Branch in the State of Assam. The assessee maintains Bank A/c with Union Bank of India, Camac Street Branch, Kolkata bearing A/c No. 401601010519286. The Auditor during the course of audit process found that M/s Choudhary Poultry Feed Centre had deposited an amount of Rs.2,04,000/- in cash on 04.07.2018 which contravenes the provisions of Sec.269ST of the Act and reported the same in column No.31 of the Tax Audit Report.
2. Based upon the information provided in the Tax Audit Report, the Joint/Additional Commissioner of Income Tax issued a notice u/s. 271DA of the Act requiring the assessee to show cause as to why the penalty should not be imposed for such contravention of provisions of Sec.269ST. The assessee upon receipt of the show cause notice submitted
3. The Ld. Joint Commissioner being not satisfied with the explanation submitted by the assessee proceeded to levy penalty of Rs.2,04,000/- u/s. 271DA of the Act. He did not accept the assessee ‘s contention that the client could have deposited the cash directly into the account of the assessee. He ignored the basic submission that the deposit of cash has been made directly into the account of the assessee. 3.3. Being aggrieved with the action of the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A), who confirmed the action of the AO. Aggrieved, assessee is in appeal before the Tribunal.
observation of the tribunal
1. the tribunal has heard the rival contentions and from the perusal of material placed on record, we find that there exists a good and sufficient reason in terms of proviso to section 271DA for deleting the penalty of Rs.2,04,000/-imposed by the Ld. AO. The facts demonstrated before us are uncontroverted which makes us incline towards the contentions made by the ld. Counsel narrated above. Considering the nature of business of the assessee and one of such transaction of deposit of cash by a party to a remote location in the bank account of assessee against a sales volume of Rs.56.93 Cr., we direct to delete the penalty imposed u/s. 271DA of the Act. Before parting, we make it clear to the assessee that this relief should not be construed as precedence and a lee way for accepting the money in the manner as in the present case. We direct the AO accordingly. The grounds taken by the assessee in this respect are allowed.
2. In the result, appeal of the assessee is allowed.
The tribunal has ruled in favour of the assessee and dismiss the appeal