IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकर अपील सं./ITA No.427/RJT/2023 ((cid:467)नधा(cid:91)रण वष (cid:91)/ Assessment Year: (2016-17)

(Physical Hearing)

M/s. Love Shoppers Ltd. Vs. Add. CIT, Range 2(1)

10^th Floor, Broadway Business Ahmedabad Centre, Opp. Mayors Bunglow, Nr.

Law Garden, Ellisbridge Ahmedabad 380006 èथायीलेखासं./जीआइआरसं./PAN/GIR No.: AAACL5963A (Assessee) (Respondent)

Assessee by : Shri Mehul Ranpura, AR Respondent by : Shri Abhimanyu Singh Yadav, Sr. DR Date of Hearing : 07 /11/ 2024 Date of Pronouncement : 04 /02/ 2025 आदेश / O R D E R PER DR. A. L. SAINI, AM:

Captioned appeal filed by the assessee, pertaining to assessment year

2016-17, is directed against the order passed by the Commissioner of Income Tax (Appeals), vide order dated on 13.10.2023, which is turn arises out of a penalty order passed by the Assessing Officer, under section 271E of the Income Tax Act 1961(hereinafter referred to as the “Act”), vide order dated 20.11.2019.

2. The grounds of appeal raised by the assessee are as follows:

“1.The grounds of appeal mentioned hereunder are without prejudice to one another.

2.The learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred as to the "CIT(A)"] erred on facts as also in law in confirming levy of penalty u/s 271E of the Act at Rs. 13,25,000/-, on the ground of alleged contravention of provision of section 269T of the Act. The penalty confirmed u/s 271E of the Act may kindly be deleted.

3.Your Honour's appellant craves leave to add, to amend, alter, or withdraw any or more grounds of appeal on or before the hearing of appeal.”

3. Succinctly, the factual panorama of the case is that assessee before us is a Limited Company. The Assessee- company has filed its return of income on 24.09.2016, declaring total income of Rs.1,42,57,360/-. The assessment u/s 143(3) of the Act was completed on 10.12.2018, by accepting the total income of the assessee- company. The assessee- company repaid loan of Rs.13,25,000/- to its director Shri Kamal Sonwami in cash, that is, otherwise than by account payee cheque or account payee bank draft, in contravention of the provisions u/s 269T r.w. section 271E of the Act. During the penalty proceedings, the assessing officer issued show cause notice to the assessee, dated 27.06.2019, which is reproduced below:

"Reference has been received from Dy. CIT, Circle- 2(1)(2) Ahmedabad who during the course of assessment proceedings for AY 2016-17 noticed from 3- CD report that the assessee- company repaid loan of an amount of Rs. 13,25,000/-

during FY 2015-16 in cash.

As per section 269T of the I.T. Act, 1961, no person shall repay deposit or loan otherwise than by an account payee cheque or account payee bank draft if the amount is twenty thousand rupee or more. Further, as per provisions u/s 271 E of the I.T. Act, 1961, if a person repays such sum in contravention of the provisions of section 269T, he shall be liable to pay a penalty of a sum equal to the amount of loan or deposit so repaid.You are, therefore, requested to show cause as to why the penalty u/s 271E of the Act should not be imposed against you for violations of the provisions u/s 269T of the Act in respect of the above transactions."

4. In response to the above show- cause notice, of the assessing officer, the assessee submitted it reply during the penalty proceedings before the assessing officer, which is reproduced below:

"The assessee submits here that during the F.Y.2015-16 relevant to A.Y.2016-17, the company received the unsecured loan form one of its directors namely Shri Kamal Sonwani in cash on different dates totaling to Rs. 13,25,000/-. The same has been repaid in cash on different dates to the said director during the financial year 2015-16 itself. The above loan was availed in order to meet the monthly regular business expenses particularly salary expense