Penalty for alleged contravention of provisions of section 269SS of the Income Tax Act

Last updated: 28 August 2021

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The Income Tax Appellate Tribunal (ITAT) Ahmedabad has allowed an appeal filed by M/s. Apple Weighinfra Limited. The company had accepted a loan of Rs. 17,40,000 in cash from its director, Shri Mitesh R. Shah. The Assessing Officer had levied a penalty under Section 271D of the Income Tax Act for this contravention of Section 269SS, which mandates acceptance of loans or deposits otherwise than by an account payee cheque. The Tribunal, following previous High Court judgments, ruled in favour of the assessee.

Court :
ITAT Ahmedabad

Brief :
This appeal has been filed by the Assessee is directed against the order of the Commissioner of Income Tax (�hereinafter called CIT(A)�) order no.

Citation :
ITA. No: 2173/Ahd/2018

IN THE INCOME TAX APPELLATE TRIBUNAL
AHMEDABAD “B” BENCH
(BEFORE SHRI PRADIP KUMAR KEDIA, ACCOUNTANT
MEMBER & SHRI MAHAVIR PRASAD, JUDICIAL MEMBER)
[Through Virtual Court]

ITA. No: 2173/Ahd/2018
(Assessment Year: 2013-14)

M/s. Apple Weighinfra
Limited Address: 1-1, New
Madhupura Market,
Shahibaug, Ahmedabad-
380004
PAN No. AAGCA8862K

Appleant

JCIT Central Range-1,
Ahmedabad

(Respondent)

Appellant by : Shri D. K. Parikh, A.R.
Respondent by : Dr. Shyam Prasad, Sr. D.R.

ORDER

Date of hearing : 19-07-2021
Date of Pronouncement : 24-08-2021

The Brief facts of the case are that assessee had taken amount of Rs. 17,40,000/- from Shri Mitesh R. Shah through cash and for which the Ld. A.O. levied the penalty of Rs. 17,40,000/- u/s 271D of the Act, as the loan acceptance was made otherwise by an account payee cheque.

2. Assessee company had accepted the amount of Rs. 17,40,000/- in cash from director Shri Mitesh R. Shah as the assessee company was required the fund for the purpose of the business of company. During the course of the assessment proceedings, it is submitted by Shri Mitesh R. Shah that he has provided the funds out of his savings and borrowings from farmers and in support of the same copies of 7/12 abstract of the farmers was submitted before the Ld. A.O.

3. Thus, respectfully following the aforesaid judgment of Hon’ble High Courts, we allow the appeal of the assessee.

4. In the result, appeal filed by the Assessee is allowed.
Order pronounced in Open Court on 24 - 08- 2021

Please find attached the enclosed file for the full judgement

FAQ :

The case concerned a penalty imposed under Section 271D of the Income Tax Act for accepting a loan of Rs. 17,40,000 in cash, which contravenes Section 269SS.

Section 269SS of the Income Tax Act was allegedly contravened, as it prohibits accepting loans or deposits otherwise than by an account payee cheque.

The Assessing Officer levied a penalty equal to the amount of the loan, which was Rs. 17,40,000, under Section 271D.

The cash loan of Rs. 17,40,000 was provided by Shri Mitesh R. Shah, a director of the assessee company.

The Income Tax Appellate Tribunal (ITAT) Ahmedabad allowed the appeal filed by the assessee, M/s. Apple Weighinfra Limited.