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TMI Blog2014 (7) TMI 522X X X X Extracts X X X X X X X X Extracts X X X X ..... - - - Dated:- 4-7-2014 - N R S Ganesan And Chandra Poojari, JJ. For the Appellant : None For the Respondent : Smt Latha V Kumar, Jr DR ORDER:- PER : Chandra Poojari This appeal by the revenue is directed against the order dated 22nd Jan 2014 of the CIT(A)-V, Kochi and its relates to the Assessment Year 2009-10. 2. The grievance of the revenue is in regard to the deletion of penalty of ₹ 24,57,000/- levied u/s 271D of the IT Act. 3. The brief facts relating to the issue in this appeal is that the assessee has accepted loans or deposits by way of cash from the following persons: Sl.No Name Amount Date 1 Shri Justine 257000 150000 300000 09.04.2008 21.05.2008 17.02.2009 2 Shri Cyriac Joseph 400000 150000 150000 150000 150000 09.07.2008 14.01.2009 28.01.2009 06.02.2009 16.02.2009 3 Shri P T Rajesh 150000 16.02.2009 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeared on behalf of the assessee. Before adverting to the facts of the present case, it would be appropriate to reproduce the relevant portion of s. 269SS which reads as under: 269SS. No person shall, after the 30th day of June, 1984, take or accept from any other person (hereafter in this section referred to as the depositor), any loan or deposit otherwise than by an account payee cheque or account payee bank draft if,' (a) the amount of such loan or deposit or the aggregate amount of such loan and deposit; or (b) on the date of taking or accepting such loan or deposit, any loan or deposit taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), the amount or the aggregate amount remaining unpaid; or (c) the amount or the aggregate amount referred to in cl. (a) together with the amount or the aggregate amount referred to in cl. (b), is twenty thousand rupees or more (since the case of the assessee does not fall within the purview of either of the provisos, hence these are not being reproduced). 4.1. So far as validity of the provision containing s. 269SS is concerned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id piece of legislation. The entries in a legislative list should be given their fullest meaning and widest amplitude and be held to extend to all ancillary and subsidiary matters which can fairly and reasonably be said to be comprehended in them. It is only when a legislature which has no power to legislate, or the legislation is camouflaged in such a way as to appear to be within its competence when it knows that it is not, that it can be said that the legislation so enacted is a colourable legislation and that there is no legislative competence. If any legislation which is intended to achieve the collection of income-tax and to make it easier and systematic is enacted, such legislation would certainly be within the competence of Parliament. When a provision in a statute is challenged on the ground of colourable legislation, what has to be proved to the satisfaction of the Court is that though the statute ostensively is within the legislative competence of the legislature in question, in substance and in reality, it covers a field which is outside its legislative competence. 4.2 In the context of such provision that for existence of reasonable cause the assessee is ent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to establish any reasonable cause for violation of the specific provision of law in this regard and said penalty came to be deleted by learned CIT(A) on the ground of reasonable cause. 4.5 In the light of above noted authoritative pronouncements and the facts as found and mentioned as above, it is observed that the assessee may be exonerated from the rigour of penalty under s. 271D of the Act, provided it is established that there existed a reasonable cause for not complying with the prescription of s. 269SS of the Act. The mandate given under s. 269SS of the Act is clear. Any departure from the said mandate invites penalty, as is envisaged under s. 271D of the Act. It is clearly laid down in the section that no person shall after 30th June, 1984 take or accept from any other person any loan or deposit otherwise than by an account payee cheque or account payee bank draft, if the amount of loan or deposit or the aggregate amount of such loan or deposit is ₹ 20,000 or more. This monopoly of law was brought on the statute to counter the tax evasion. Therefore, it is not sufficient to say that simply the transaction was genuine, so s. 269SS of the Act is not applicable. One ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be accepted by the department, the Division Bench opined that there is no tax evasion or black money introduced in the business. That is not the situation here. The source of funds of the creditors was not from the bank and introduction of black money cannot be ruled out. There is a clear finding by the assessing officer that no proof was furnished regarding earnings of agricultural income by the creditors. Hence, P K Shamsuddin's case does not apply to the facts of this case. For that reason itself we do not think that there is any perversity in the findings of the Tribunal and since no question of law arises for consideration, the appeal is liable to be dismissed and we dismiss the appeal. 5. In this case the claim of the assessee is that he has accepted loans from various persons by way of cash and returned the same to the persons from whom the loans were availed. On verification of the bank accounts of the assessee with South Indian Bank and Dhanalashmi Bank, the AO found that those persons have given loans to the assessee for clearing the account payee cheques issued by the assessee through their bank account. In the above bank account of the assessee, the clearin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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