Facts of the Case

  1. The Revenue filed four appeals before the Delhi High Court challenging the common order dated 6 January 2017 passed by the ITAT.
  2. The ITAT had deleted penalties imposed by the Assessing Officer under Sections 271D and 271E.
  3. The matter related to Assessment Years 2003-04 and 2004-05.
  4. The Tribunal relied upon an earlier judgment of the Delhi High Court dated 20 September 2012 involving identical legal issues in the case concerning Sahara Indian Financial Corporation Ltd.
  5. The Revenue sought reconsideration of the deletion of penalties on similar grounds.

Issues Involved

  1. Whether the ITAT was justified in deleting penalties imposed under Sections 271D and 271E?
  2. Whether any substantial question of law arose for consideration before the High Court?
  3. Whether the earlier precedent of the Delhi High Court governed the present dispute?

Petitioner’s Arguments (Revenue/Appellant)

  • The Revenue contended that the assessee had violated the statutory provisions of Sections 269SS and 269T.
  • It was argued that such violations attracted penalty under Sections 271D and 271E.
  • The Revenue challenged the Tribunal’s deletion of penalty and sought restoration of the Assessing Officer’s order.

Respondent’s Arguments (Assessee)

  • The assessee relied upon the earlier binding decision of the Delhi High Court on identical facts.
  • It was contended that the issue stood settled by judicial precedent.
  • The assessee argued that the Tribunal rightly followed the settled legal position and deleted the penalties.

Court Findings / Observations

  • The High Court noted that the ITAT had relied upon the earlier judgment of the Court dealing with identical questions.
  • The Court observed that the earlier judgment had already upheld deletion of penalties under Sections 271D and 271E in similar circumstances.
  • The Bench found no distinguishing factor warranting interference.
  • It held that no substantial question of law arose for adjudication.

Court Order / Final Decision

The Delhi High Court dismissed all four appeals filed by the Revenue and upheld the ITAT’s order deleting the penalties under Sections 271D and 271E. No order as to costs was passed. 

Important Clarification

This judgment reinforces the principle that where an issue has already been settled by a binding judicial precedent on identical facts and law, subsequent appeals on the same question may not raise a substantial question of law. It further strengthens judicial consistency in penalty matters under Sections 271D and 271E of the Income Tax Act.

Sections Involved

  • Section 271D – Penalty for contravention of Section 269SS
  • Section 271E – Penalty for contravention of Section 269T
  • Section 269SS – Acceptance of loans/deposits otherwise than by account payee cheque/draft
  • Section 269T – Repayment of certain loans/deposits otherwise than by account payee cheque/draft
    Income Tax Act, 1961

Link to download the order - https://delhihighcourt.nic.in/app/case_number_pdf/2017:DHC:8935-DB/SMD30082017ITA5572017_162417.pdf

Disclaimer

This content is shared strictly for general information and knowledge purposes only. Readers should independently verify the information from reliable sources. It is not intended to provide legal, professional, or advisory guidance. The author and the organisation disclaim all liability arising from the use of this content. The material has been prepared with the assistance of AI tools