IN THE HIGH COURT OF DELHI AT NEW DELHI 
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   ITA 522/2012  
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 CIT             ..... Appellant 
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 Through: Mr. Sanjeev Sabharwal, Sr. Standing Counsel. 
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 versus 
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 INTEGRATED TECHNOLOGIES LTD ..... Respondent 
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 Through: None. 
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 CORAM: 
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 HON'BLE MR. JUSTICE S. RAVINDRA BHAT 
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 HON'BLE MR. JUSTICE R.V.EASWAR 
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 O R D E R 
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       25.09.2012 
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 The Revenue claims to be aggrieved by the order of the Income Tax 
 Appellate Tribunal (?Tribunal?, for short) dated 09.02.2012 in ITA 
 No.5552/Del/2011 the question of law sought to be urged is that whether 
 the Tribunal fell into an error in holding that the assessee had not 
 violated Section 269SS of the Income Tax Act, 1961 (?Act?, for short). 
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 The assessment, completed under Section 143(3) of the Act by order 
 dated 14.03.2001, sought to add under Section 68 of the Act, certain 
 amounts on account of unexplained and unsecured credits.  The matter was 
 remanded and in further proceedings `18,39,800/- was again added under 
 Section 68 of the Act.  The Assessing Officer while completing the 
 assessment noted that the substantial amount was on account of amounts 
 credited through journal entry and added them under Section 68 of the Act 
 and referred the matter to the Addl. CIT to initiate penalty proceedings 
 u/s 271D which were taken on 12.10.2011.  The assessee in response denied 
 the liability but its explanation was rejected.  The CIT (Appeals) 
 cancelled the penalty holding that the assessee had not in fact received 
 the amount in cash, but was only a beneficiary since the amount in 
 question was paid otherwise than by the cheque on its behalf by its 
 Director to the creditor.  The Revenue?s appeal was dismissed by the 
 Tribunal.  Learned counsel for the Revenue contended that the Tribunal?s 
 order defeats the very purpose for which the provision i.e. Section 269SS 
 was introduced.  If the impugned order is to be upheld, the devices and 
 mechanism to circumvent the mandatory provision of Section 269SS, 
 infraction of which attracts penal action under Section 271D of the Act, 
 can conveniently be used to get around the provision. 
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 This Court is of the opinion that the language and terminology of 
 Section 269SS clarifies that the amount should be received by the 
 concerned individual which is sought to be visited with the penalty under 
 Section 271D.  The Tribunal discussed this aspect elaborately in para 5.6 
 and concluded as below: - 
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 ?5.6 It is well established by the decision of the Supreme Court in 
 Hindustan Steel Ltd. v. State of Orissa, (1972) 83 ITR 26 that the 
 liability to pay penalty does not arise merely upon proof of default in 
 complying with the statutory requirements and an order imposing penalty 
 for failure to carry out a statutory obligation being the result of a 
 quasi-criminal proceeding, will not ordinarily be imposed unless the 
 party obliged either acted deliberately in defiance of law or was guilty 
 of conduct, contumacious or dishonest or acted in conscious disregard of 
 its obligation, and penalty will also not be imposed merely because it is 
 lawful to do so.  Whether penalty should be imposed for failure to 
 perform the statutory obligation, it is stated, is a matter of discretion 
 of the authority concerned to be exercised judicially on a consideration 
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 of all relevant circumstances and even if a minimum penalty is prescribed, the authority competent to impose the penalty will be 
 justified.? 
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 In the present case the facts of this case would reveal that the 
 assessee was only the beneficiary of the payment and was in fact neither 
 the recipient and nor did it make payments.  The payments were received 
 by third party from the direction of the assessee; consequently, in the 
 opinion of the Tribunal, the Revenue appears to have misdirected the 
 inquiry towards the assessee rather than someone else.  We fully concur 
 with the opinion of the Tribunal. 
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 We also notice that this view accords that the previous judgment of 
 this Court in CIT v. Noida Toll Bridge Company Ltd., (2003) 262 ITR 260. 
 The appeal has to consequently fail; the same is, therefore, dismissed. 
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 S. RAVINDRA BHAT, J 
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 R.V.EASWAR, J 
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 SEPTEMBER 25, 2012 
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 hs 
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 $ 5 and 6 
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