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TMI Blog2012 (12) TMI 894X X X X Extracts X X X X X X X X Extracts X X X X ..... as no material or evidence brought before the Court to show that the finding was perverse or was of such nature that no reasonable person, duly instructed on the facts and the legal position, would have reached. In the present case also the revenue has not been able to bring on record any material to show that the finding of the Tribunal as to the existence of reasonable cause is perverse - also as decided in CIT v. Parma Nand [2002 (11) TMI 13 - DELHI HIGH COURT] and CIT v. ITOCHU Corpn. [2004 (5) TMI 53 - DELHI HIGH COURT] that whether or not there was reasonable cause for the default is a question of fact which does not give rise to a substantial question of law unless the finding is perverse or irrational. Thus having regard to the finding of fact entered by the Tribunal that there was reasonable cause for the defaults, no substantial question of law arising for consideration - in favour of assessee. - IT Appeal Nos. 846, 848,to 851 & 876 of 2011 - - - Dated:- 20-9-2012 - R.V. Easwar and S. Ravindra Bhat, JJ. Kamal Sawhney for the Appellant. Percy J. Pardiwala, Satyen Sethi and Arta Trana Panda for the Respondent. ORDER R.V. Easwar, J. - The Reven ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cceptance of the deposits to the tune of Rs. 98,23,600/- in cash. Similar details and ledgers were also produced in respect of the default in repayment of the deposits to the extent of Rs. 33,13,132/-. A reply running to about 127 pages was filed before the Additional CIT giving reasons as to why penalty should not be imposed under Sections 271D and 271E. The summary of the reply is as below:- (a) The assessee, being a mutual benefit company under the Companies Act, can accept the loans or deposits only from its shareholders or members who are known and identifiable. The deposits are thus genuine. It amounts to the company taking deposits from itself. (b) The deposits are mobilized under various saving schemes collected through more than 600 branches of the agents spread across the country. They are located in remote areas where the savings and the contributions to the schemes are small. The field workers motivate the members/shareholders to effect savings and deposit them with the assessee. The procedural formalities are more or less the same as in the case of opening an account in the banks. (c) In several cases, the agents of the assessee had faced difficulties in openi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o said that the said argument was correct. He, however, held that the provisions of the Act were applicable uniformly to deposits from all persons without any exemption for persons of agricultural background and petty shopkeepers. As regards the objection that the deposits were genuine and the depositors were identifiable, he held that the provisions of Section 269SS were applicable to genuine deposits only. He also considered as irrelevant the fact that the amounts were added under Section 68 of the Act in the assessment against which an appeal was pending. In this view of the matter, he held that the assessee was liable to penalty under Section 271D. 6. A similar view was taken by him in respect of the applicability of Section 269T of the Act and the penalty imposed under Section 271E for having repaid the deposits in cash. 7. In respect of the other years, the penalties under Section 271D and Section 271E were levied for similar reasons. 8. All the penalties were deleted by the CIT(Appeals). He was of the view that there was reasonable cause for the acceptance/repayment of the deposits as explained by the assessee. The revenue carried the matter in appeal before the Tribun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ally different, as mentioned above, but the ingredients of reasonable cause remain by and large the same. The assessee's business will have a small fraction of cash payments of deposits where banking facilities are inadequate and other factors as indicated exist. Some depositors insisted for cash repayments of their deposits which were collected on daily, weekly or monthly earn over basis in our view it will not be possible for the assessee to deny the same and invite bad publicity among its depositors which would have serious repercussions for business. It has not been pointed out to us that the volume of such cash repayment of deposits is alarming or disproportionate." 10. It would appear that there were some instances of repayment of the deposits otherwise than through account payee cheques or account payee drafts even in bigger cities like the Bhinder, Gorakhpur etc. With reference to these repayments the Tribunal referred to the assessee's explanation that the depositors insisted on cash payments which the assessee was not in a position to refuse, considering the nature of its business. The Tribunal observed as follows : "5.2 Apropos some instances of repayment in bigger c ..... X X X X Extracts X X X X X X X X Extracts X X X X
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