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Section 271D of the Income-tax Act, 1961 - Penalty - For failure to comply with section 269SS - Assessment year 1990-91 - Tribunal found that assessee raised loans in cash in order to clear certain cheques as there was no sufficient bank balance with him and by clearing cheques he could avail discount - Whether conclusion of Tribunal that there was reasonable cause in not strictly complying with provisions of section 269SS was based on relevant factors - Held, yes Sanjiv Khanna and Subhash C. Sharma for the Appellant. JUDGMENT 1. This appeal under section 260A of the Income-tax Act, 1961 (for short the 'Act'), by the Revenue, is directed against order, dated 6th May, 2002, passed by the Tribunal, Delhi Bench 'D', New Delhi, in ITA No. 4048/Delhi/1996, for the assessment year 1990-91. By the impugned order the Tribunal has upheld the order passed by the CIT(A), whereby penalty levied on the respondent/assessee under section 271D of the Act was deleted. 2. While affirming the said order and holding that the assessee has been able to prove that there was a reasonable cause for receiving the money in cash, the Tribunal has held as follows : "Further, we find that there was a reasonable cause because the assessee was going to be directly benefited if the cheques issued to M/s. Hindustan Engg. Products are cleared in time, as there was a discount at the rate of 2 per cent for cash payment against the bills. The cheques issued by assessee were of dated 4th April, 1989; 14th September, 1989; 21st December, 1989; 16th January, 1990, and 20th February, 1990, and the advances, which were received by assessee in cash, were on the dates nearing the dates of issue of the abovesaid cheques. The payment was received on 5th April, 1989; 15th September, 1989; 22nd December, 1989; 17th January, 1990 and 21st February, 1990, respectively. The loans were taken by assessee just to clear these cheques issued by it, as there was no sufficient bank balance with assessee. The amounts were prepaid through…

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