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TMI Blog2015 (7) TMI 848X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the provisions of Section 269T, cannot seek the support of Section 273B. The appellant has not explained as to the urgency, compulsion or any other important circumstance for the breach and that too repeatedly. Taking into account the conduct of the assessee, the assessing authority, after giving repeated reasonable opportunities, finding no explanation whatsoever, was unable to exercise his discretion under Section 273B and accordingly imposed the penalty under Sections 271D & 271E of the Act. Penalty orders confirmed - Decided against assessee. - Tax Case (Appeal) Nos. 850 to 858 of 2014 - - - Dated:- 26-3-2015 - R. Sudhakar And T. Raja, JJ. For the Appellant : Mr S Sridhar For the Respondent : Mr J Narayanaswamy JUDGMENT (Judgment of the Court was made by T. Raja, J.) The appellant-assessee, aggrieved by the impugned common order passed by the Income Tax Appellate Tribunal 'A' Bench, Chennai in I.T.A.Nos.220 to 228/Mds/2014 dated 29.5.2014 for the assessment years 2008-09, 2009-10, 2010-11, 2011-12 2012-13 respectively, has brought all these tax case appeals raising the following substantial questions of law:- (1) Whether the Appel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssued with another notice dated 1.2.2012, which was served upon him on 6.2.2012. Again he sent another letter dated 16.2.2012 seeking adjournment on the ground that a close associate and senior citizen of his community/mentor in business passed away. On the basis of the said request also, the matter stood adjourned to 23.2.2012. Therefore, fresh notices were again issued to him on 16.2.2012, 6.3.2012 17.4.2012 and the assessee sent his letters dated 23.2.2012, 15.3.2012 19.4.2012 seeking adjournment. However, when he sent his Chartered Accountant Mr.Jayachander to attend the hearing on 14.5.2012, sadly, for the reasons best known to him, it appears that he has not attended the hearing, as a result, the assessing authority has erroneously passed the impugned order holding him guilty under Sections 269SS and 269T of the Income Tax Act, consequently, penalty under Sections 271D and 271E of the Income Tax Act for each of the assessment years was levied. Aggrieved by the same, he preferred appeals before the Commissioner of Income Tax (Appeals), the appellate authority, inter alia, raising the following grounds:- ''(i) The object of introducing S.269SS is to eradicate the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nfirmed the orders passed by the authorities below, as a result, he was constrained to come to this Court by way of the present tax case appeals. The learned counsel for the appellant further submitted that when the appellant has admittedly received the cash amounts in question from the financier, as contended by the other side, during the course of investigation, the financier himself has deposed saying that he has been conducting the business by lending money only in cash, while that being the admitted position of the financier, till date, the department has not proceeded against the financier. In an identical circumstance, in respect of the very same assessee, when a similar issue was brought to the notice of the Income Tax Appellate Tribunal 'C' Bench, Mr.Sridhar further submitted that the very same explanation and the ground taken by the appellant was accepted by the Tribunal in I.T.A.Nos.1820 to 1825/Mds/2013 dated 31.10.2013 for the assessment years 2006-07 to 2010-11, on that basis, the penalty imposed against the appellant was set aside. While that being the case, the Tribunal ought not to have disbelieved the case of the appellant. 5. Adding further, he has con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hority, submitted that the instant appeals cannot be entertained on merits and they deserve to be dismissed. He has further submitted that when the appellant was issued with the show cause notices dated 16.12.2011 under Sections 271D and 271E of the Act, received by him on the same date, immediately thereupon, he sent a letter dated 11.1.2012 seeking adjournment. The assessing authority, accepting his request, granted adjournment. Again on receipt of another notice dated 1.2.2012, by another letter dated 6.2.2012, the appellant sought adjournment on the ground that one of his close associate and senior citizen belonging to his community passed away. Accepting the said reason, the matter was once again adjourned and a fresh notice dated 16.2.2012 was issued to the appellant on 17.2.2012. Again when the matter was processed, the representative of the appellant M/s.Ganesan and Company, Chartered Accountants filed adjournment letter on 23.2.2012. The appellant, who took several adjournments, did not come forward to submit any explanation for receiving the aforesaid amounts in cash. Therefore, when the appellant, was given all reasonable and fair opportunity repeatedly by the assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnment company84 as defined in section 617 of the Companies Act, 1956 (1 of 1956); (e) such other institution, association or body or class of institutions, associations or bodies which the Central Government may, for reasons to be recorded in writing, notify85 in this behalf in the Official Gazette : [Provided further that the provisions of this section shall not apply to any loan or deposit where the person from whom the loan or deposit is taken or accepted and the person by whom the loan or deposit is taken or accepted are both having agricultural income and neither of them has any income chargeable to tax under this Act.] Explanation.-For the purposes of this section,- [(i) banking company means a company to which the Banking Regulation Act, 1949 (10 of 1949), applies and includes any bank or banking institution referred to in section 51 of that Act;] (ii) co-operative bank shall have the meaning assigned to it in Part V of the Banking Regulation Act, 1949 (10 of 1949); (iii) loan or deposit means loan or deposit of money.] Mode of repayment of certain loans or deposits 269T. No branch of a banking company or a co-operative bank and no other compan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sel for the Department and also relied upon by the appellant would be a case of money lending business by the financier repeatedly indulging in violation of the provisions of Sections 269SS 269T of the Act. It is one thing to say that there was a compulsion on the part of the financier. Nevertheless, factually we find that the assessee has been taking loan and paying it in cash in total violation of the said provisions. The test insofar as non-levy of penalty under Sections 271D and 271E is established by Department. For invoking Section 273B the appellant has to establish a reasonable cause and satisfy the requirement therein. In the instant case, the assessing authority, the appellate authority as well as the Tribunal found that there is no reasonable cause. In any event, by record there is no explanation offered at the first instance by the assessee. It was argued before the Commissioner of Income Tax (Appeals) that there were some reasons for not complying with the requirement of law. It was found that the conduct of the assessee was in breach of the said provisions on more than one occasion and there was no justification of any business interest or exigency to violate the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been charged for violation of the provisions of Section 269SS and Section 269T of the Act on the ground that when a survey was conducted under Section 133A in the business premises of Mr.A.Kannan, Proprietor of Vadamalayan Finance on 8.10.2011, it was found that Mr.A.Kannan was doing money lending business, who chose to give loans to only selected group of persons after deducting interest for ten months; that the whole transaction was done in cash only, namely, no cheque or draft came into play; that the appellant was also found as one of the borrowers, as he received cash loan of ₹ 15 lakhs on 21.6.2007 and the same was found to be repaid in cash for the assessment year 2008-09. For the assessment year 2009-10, the appellant received ₹ 20 lakhs on 23.4.2008 and he repaid the same in cash. In the same assessment year on 7.3.2009, he had received another sum of ₹ 20 lakhs, but there is no proof of repayment. For the assessment year 2010-11, on 9.1.2010, he received cash loan of ₹ 20 lakhs and he had repaid the same in cash. For the assessment year 2011-12, the appellant took cash loan of ₹ 20 lakhs on 3.11.2010 and had repaid a sum of ₹ 23 lak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entry dated 11.5.2012 and letter dated 2.5.2012. In the above background, taking into account the conduct of the assessee, the assessing authority, after giving repeated reasonable opportunities, finding no explanation whatsoever, was unable to exercise his discretion under Section 273B and accordingly imposed the penalty under Sections 271D 271E of the Act. This finding has been affirmed by both the appellate authority and the Tribunal. When the finding of facts have been reached by all the authorities below, taking note of the conduct of the appellant, who was given sufficient opportunities by the assessing authority, we are unable to accept the prayer for remanding the matter to any of the authorities below. We are also not inclined to accept the subsequent explanation. 12. One another argument of Mr.S.Sridhar, learned counsel for the appellant placing reliance on the judgment of this Court in the case of Commissioner of Income Tax v. Balaji Traders, (2008) 303 ITR 312 (Mad), which held that if (i) there was business exigency forcing the assessee to take cash loans for the purpose of honouring the commitment viz., issuance of cheque on a particular date; (ii) the creditors ..... X X X X Extracts X X X X X X X X Extracts X X X X
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