Law:

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Section 271E of the Income-tax Act, 1961 - Penalty - For failure to comply with section 269T - Assessment year 1993-94 - Commissioner (Appeals) deleted penalty imposed by ITO under section 271E accepting explanation of assessee that breach of provisions of Act was on account of its bona fide belief and same was not with any intention to avoid or evade tax - On appeal, Tribunal confirmed the order of Commissioner (Appeals) - Whether findings recorded by Commissioner (Appeals) and Tribunal being findings of fact, did not give rise to any question of law, much less substantial question of law - Held, yes FACTS The ITO levied penalty upon the assessee-firm under section 271E on the ground that the assessee-firm had contravened the provisions of section 269T during the assessment year 1993-94 by making repayment of loan/deposits in cash. On appeal, the Commissioner (Appeals) cancelled the order of penalty. Tribunal, also dismissed the revenue's appeal. On appeal : HELD A combined reading of the provisions of sections 271E and 273B, makes it clear that if the assessee shows reasonable cause for the failure to comply with any provision referred thereto, the penalty for its violation shall not be imposable on the assessee. [Para 11] In the instant case, the Commissioner (Appeals) while deleting the penalty, had accepted the explanation of the assessee that breach of the provisions of the Act was on account of bona fide belief of the assessee and the same was not with any intention to avoid or evade tax. The findings of the Commissioner (Appeals) had been confirmed in appeal by the Tribunal. [Para 12] Therefore, the findings recorded by the Commissioner (Appeals) and the Tribunal that the assessee had shown reasonable cause for failure to comply with the provisions of section 269T was a finding of fact based on appreciation of material on record. It did not give rise to any question of law much less substantial question of law. [Para 13] Accordingly, the appeal was to be dismissed. Rajesh Bindal for the Appellant. ORDER Ajay Kumar Mittal, J. - The revenue has filed the present appeal under section 260A of the Income-tax Act, 1961 (for short 'the Act') against the order…

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