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TMI Blog2002 (4) TMI 230X X X X Extracts X X X X X X X X Extracts X X X X ..... mposed a penalty of Rs. 45,782 under section 271E of the act for contravention of section 269T of the Act as the assessee was found by the Assessing Officer to have repaid the alleged two deposits in cash by contravening the provisions of section 269T of the Act. The DCIT made a discussion in his order that the assessee has repaid two deposits to Smt. Sarita Rathi and Shri Dushyant Rathi amounting to Rs. 22,632 and Rs. 23,150 respectively. It was contended by the assessee before the DCIT that at no stage of time the payment of deposits were made in excess of Rs. 20,000 as detailed below: "Sarita Rathi 30-3-1992 Repayment of Interest (By Cash) Rs. 3,450 31-3-1992 Repayment of Principal (By Cash) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , cited in 197 ITR/page 330 considering the ratio of this decision I hold that the penalty imposed has no legs to stand on and as such, it is deleted in full." 4. Being aggrieved, the Department is in appeal before us. The learned Departmental Representative, Shri B.B. Deb, has strongly argued that the CIT(A) was unjustified and wrong in relying upon a decision of Madras High Court in the case of Kumari A.B. Shanthi alias Vennira Adai Nirmala V. A.D.I.[l992] 197 ITR 330 as the operation of this judgment was stayed by the Hon'ble Supreme Court as reported in [1993] 204 ITR 1 (Statute). He, therefore, contended that the cancellation of penalty by the CIT(A) by relying on the aforesaid decision in the case of Kumari A.B. Shanthi is total ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the first appellate authority was made on 9-11-1995 and the order was passed by the CIT(A) on the very same day. On perusal of the order of the Hon'ble Supreme Court staying the operation of the decision of the Hon'ble Madras High Court in the case of Kumari A.B. Shanthi we find that the operation of the Madras High Court judgment was stayed as far back as in the year of 1993 and as such reliance placed on the aforesaid decision of the Madras High Court in the case of Kumari A.B. Shanthi was not at all according to the norms of judicial discipline. The aforesaid decision of the Hon'ble Madras High Court in the case of Kumari A.B. Shanthi held that section 269SS of the Act is violative of Article 14 of the Constitution of India and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olding the validity of section 269SS of the Act. We, therefore, feel that placing reliance on the aforesaid decision of the Hon'ble Madras High Court in the case of Kumari A.B. Shanthi by the authorised representative of the assessee before the CIT(A) was not in the true spirit of the professional conduct while representing the case of his assessee. It is well-settled proposition of law that the authorised representative representing the assessee before the Income-tax Authorities are under obligation not to misrepresent facts and not to mislead the authorities, and they should not be parties in any manner to set up false defences. By over-looking the decision of the Division Bench of the Hon'ble Madras High Court in the case of K.R.M.V Ponn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as given by the CIT(A). 9. However, coming to the merit of the case we find that section 269T does not cover the loan transactions. From a comparative study of sections 269SS and 269T, it may be seen that the legislature has itself made a distinction between the loan and the deposit and knowing very well such distinction the legislature has introduced section 269T to cover one of the transaction, namely, the deposit. Therefore, it is not permissible for the taxing authorities to enlarge the scope of term deposit in section 269T to include transaction of the loan. It may be true that the loan transaction may have some of the attributes, qualities and characteristics of the deposit. The loan may be repayable on notice or may be repayable a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uent amendment sought to be made effective with effect from 1st June, 2002, by inserting the word 'loan' in section 269T. We, therefore, have no hesitation to hold that the provisions of section 269T are not applicable in the instant case and hence the penalty imposed by the DCIT under section 271E of the Act is not justified and is, thus, liable to be cancelled. We, therefore, upheld the order of the CIT(A) cancelling the penalty imposed under section 271E but on the reasons given by us as above and not on the reasons given by the CIT(A). 10. Before parting with this issue we would like to observe that granting a relief on another ground than the ground given by the CIT(A) is within the powers of the Tribunal, inasmuch as, the right of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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