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2007] 294 ITR 599 [2008] 169 TAXMAN 158 (JHARKHAND) HIGH COURT OF JHARKHAND OMEC Engineers v. Commissioner of Income-taxï‚ ï-ª M.Y. EQBAL AND D.G.R. PATNAIK, JJ. TAX CASE NO. 40 OF 1998(R) SEPTEMBER 18, 2007 Section 271D of the Income-tax Act, 1961 - Penalty - For failure to comply with section 269SS - Whether in context of penalty provisions, words 'reasonable cause' would mean a cause which is beyond control of assessee - Held, yes - Assessing Officer imposed penalty under section 271D upon assessee for having received cash deposits in violation of section 269SS - Assessee explained that it was in urgent need of money for making payment to labourers and sufficient cash not being available, it received cash deposits from different persons - Commissioner (Appeals) as well as Tribunal upheld imposition of penalty - Whether since there was no finding of assessing authority, appellate authority or Tribunal that transaction made by assessee in breach of provisions of section 269SS was not a genuine transaction and on contrary, return filed by assessee was accepted after scrutiny under section 143(3), imposition of penalty merely on technical mistake committed by assessee, which had not resulted in any loss of revenue, was harsh and could not be sustained in law - Held, yes FACTS After completing the assessment, the Assessing Officer initiated penalty proceedings under section 271D against the assessee-firm for having received cash deposits of Rs. 20,000 or more in violation of section 269SS. The assessee explained that it was in urgent need of money for making payment to labourers and sufficient cash not being available, it received cash deposits from different persons in cash; that its return was finally accepted under section 143(3) and no loss of revenue was found; and that it had not acted deliberately in defiance of law. The Assessing Officer rejected the submissions of the assessee and imposed penalty. On appeal, the Commissioner (Appeals) as well as the Tribunal concurred with the Assessing Officer and upheld the imposition of impugned penalty. On reference : HELD From a bare reading of the provision of section 269SS, it is manifestly clear that after…

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