9911796707
TMI Blog2015 (7) TMI 331X X X X Extracts X X X X X X X X Extracts X X X X ..... om records are: The assessee is an Educational Trust. The assessee is fully aided by the Government and thus, its income is exempt u/s. 10(23C)(iiiab) of the Act. The assessee filed its return of income for the assessment year 2007-08 declaring NIL income. During the course of scrutiny assessment, the Assessing Officer found cash deposits of Rs. 7,73,000/- from three different persons who were trustees/members of the assessee trust. The said amount was repaid shortly thereafter in cash to the persons from whom it was taken. The Assessing Officer held that the assessee accepted the cash deposits and repaid the same in cash in violation of the provisions of section 269SS and 269T. Accordingly, penalty proceedings u/s. 271D and 271E for accept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 419 (Mad). iii. P. Baskar Vs. CIT, 340 ITR 560 (Mad). iv. ITO Vs. Sunil M. Kasliwal, 94 ITD 281 (Pune)(TM). v. Balaji Traders Vs. DCIT, 78 ITD 368 (Pune). 4. On the other hand Shri Pramod Shingte appearing on behalf of the assessee strongly supported the order of Commissioner of Income Tax (Appeals). The ld. AR submitted that the assessee had taken loan of Rs. 3,00,000/- from one Geeta Nagari Sahakari Pat Puravtha Sanstha Maryadit, Mohol (hereinafter referred to as "Geeta Sanstha") for the purpose of construction in the year 1994. The assessee was not in position to repay loan to Geeta Sanstha all these years as it was in financial distress. When the loan was taken the assessee was not receiving any aid from the Government. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Solapur District Central Co-operative Bank claimed that they are entitled to receive the amount on behalf of Geeta Sanstha. The officials of the Solapur District Central Co-operative Bank claimed that the Bank had lended money to Geeta Sanstha and recovery proceedings against Geeta Sanstha are pending before the same Court. Therefore, they have the lien on the said amount. Since, the assessee had no instructions from Geeta Sanstha to repay the amount to Solapur District Central Co-operative Bank, the assessee was advised by Counsel not to make the payment at that point of time in the Court. As a consequence of events that occurred in Court, the lenders insisted the assessee to repay the money on the same day itself. Accordingly, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se for not complying with provisions of the Act. The assessee has given detailed reasons for accepting the loan amount in cash from its Members/Office bearer and repayment of the same in cash. Further, in support of its submissions, the assessee has placed on record letter dated 28-04-2006 from Geeta Sanstha making an offer to settle the loan account by paying an amount of Rs. 6,11,000/- on 12-06-2012 before the Co-operative Court. The assessee has also placed on record the translated copies of the Resolution dated 31-03-2006 and 15-08-2005 to substantiate that the assessee had to repay loan to Geeta Sanstha. The assessee has filed affidavits of the lenders who are agriculturist to substantiate that they have advanced cash loan for the purp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty imposed u/s. 271D and 271E of the Act. The Hon'ble High Court set aside the order of Tribunal on the ground of violation of rules of natural justice. The Hon'ble High Court held that the Tribunal has failed to record tangible and cogent reasons for upsetting well reasoned orders passed by the Assessing Officer and the Commissioner of Income Tax (Appeals). In the case of Kasi Consultant Corporation Vs. DCIT (supra) the Hon'ble Madras High Court confirmed the levy of penalty u/s. 271D as the assessee was not able to explain the reasonable cause for accepting the cash. The Tribunal after appreciating the facts had come to the conclusion that the assessee has not produced any material to substantiate the plea of reasonable caus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the Commissioner of Income Tax (Appeals) and Tribunal have found that transaction of cash loan and its repayment were genuine and there was no intention to evade tax. No interfere was called for in the order deleting penalty u/s. 271D and 271E of the Act. In the case of Sharda Educational Trust Vs. ACIT (supra) the Co-ordinate Agra Bench of the Tribunal deleted the penalty u/s. 271D on the ground that the Revenue authorities have accepted the transaction as genuine. The Tribunal further held that the transaction in question was neither loan nor deposit because the amount was received by the trust from the trustees. The phrase used in section 269SS is ".....take or accept from any other person.....". The amount advanced by trustee to trus ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
