Sec. 269SS, 271D and 273B, of the Income-tax Act, 1961 – Loans & Deposits – While finalising the assessment, the AO found that, during the previous year relevant to the assessment year concerned, the assessee had conducted finance business by violating the provisions contained in Section 269SS of the Act by accepting deposits in cash from various clients, exceeding the sum of Rs. 20,000/-. On the recommendation of the Assessing Authority, penalty proceedings under section 271D of the Act was initiated and notice was issued to the assessee. The assessee replied the same. The Assessing Authority did not accept it by holding that the assessee was doing large scale finance business dealing with public, extending to crores of rupees. Therefore the ignorance of the provisions of law cannot be put forth as an excuse. Therefore penalty to the tune of Rs. 4,74,46,248/- was imposed under section 271D. CIT(A) dismissed the appeal of the assessee and Tribunal confirmed the same.
High Court also dismissed the Tax appeal of the assesse holding that:– We do not find that any substantial question of law existing warranting interference with respect to the impugned order passed by the Tribunal – KARAYOGAM (N.S.S.) Vs. CIT [2020] 271 TAXMAN 193 (KER)