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TMI Blog2014 (5) TMI 1052X X X X Extracts X X X X X X X X Extracts X X X X ..... asonable cause for accepting loans in cash and repaid the same in cash. It is very clear from the order of the Assessing Officer that he has given as many as number of opportunities to explain his case before him. However, the assessee has not utilized those opportunities and he was not in a position to explain as to what was the reason for accepting and repaying monies in cash, which is contrary to the provisions of sections 269SS and 269T of the Act. After carefully going through the orders of the Assessing Officer and ld. CIT(Appeals), we are of the opinion that the assessee is not in a position to give any explanation either before the Assessing Officer or before the ld. CIT(Appeals) and therefore, he has avoided to attend before the lower authorities. Now, the ld. Counsel for the assessee is requesting to remit the matter back to the ld. CIT(Appeals), which appears to be not fair, just and proper. Once the assessee obtained loans in cash exceeding ₹ 20,000/- and repaid it in cash, if this factual position is correct, the only option for the assessee is to explain the reasons under what circumstances the assessee has obtained the loans and repaid the loans in cash as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... #8377; 20 lakhs Assessment year 2011-12 Cash loan: 03.11.2010 20 lakhs Cash repayment ₹ 23 lakhs Assessment year: 2012-13 Cash repayment ₹ 13 lakhs The ITO has referred this case to the JCIT, Puducherry and consequent to the above reference, a show cause notice dated 16.12.2011 were issued to the assessee under section 271D 271E of the Act and the same was served upon the assessee on 16.12.2011. The assessee filed letter dated 11.01.2012 and sought adjournment. Another notice dated 01.02.2012 was also issued and served upon the assessee on 06.02.2012. The assessee vide letter dated 16.02.2012 sought adjournment on the ground stated that a close associate, senior citizen of my community and my mentor in business passed away this morning. Hence, I request you to grant me a week s time and the case was adjourned to 23.02.2012 . Thereafter, a fresh notice dated 16.02.2012 were served upon the assessee on 17.02.2012. None appeared in response to the notice served. Further notice dated 24.02.2012 were issued and served on the assessee on 24.02.2012. The assessee s representative M/s. Ganesan and Co. C.As filed adjournment letter dated 23.02.2012 An ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8.2013 to file further details. Even on this date, the AR of the assessee has failed to attend before the ld. CIT(Appeals). Therefore, the ld. CIT(Appeals) proceeded to decide the appeal on ex-parte and confirmed the order passed by the Assessing Officer by passing a detailed order, which is reproduced as under: 5. Decision and grounds of determination: In the statement of facts filed by the appellant along with the Form No.35, it is stated by the appellant that it had obtained a loan of ₹ 15 lakhs on 21.06.2007 by cash. The acceptance of the loan by the appellant from the lender in cash was not disputed by the appellant before the AO as well as in the statement of facts filed by the appellant. The evidence of acceptance of the loan by the appellant was also in possession of the Assessing Officer and the Assessing Officer called for several details from the appellant including bank accounts of the appellant, the reasonable cause, if any, for acceptance of the cash loan etc. vide his letter dated 02.05.2012 and 11.05.2012. But, no compliance was made to the letters dated 02.05.2012 11.05.2012. The appel1ant has violated the provisions of Sec.269SS of the IT Act. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... all the grounds of appeal filed by the appellant are rejected. Under the facts and circumstances of the case, I am of the confirmed view that Joint Commissioner of Income Tax has rightly levied penalty u/s 271D of the IT Act of ₹ 15,00,000/-. 5. On being aggrieved, the assessee is in appeal before the Tribunal. 6. The ld. Counsel for the assessee has pleaded that since the ld. CIT(Appeals) has passed order ex-parte, one more opportunity may be given to the assessee to substantiate its case before the ld. CIT(Appeals). Alternatively, he has submitted that survey was conducted in the premises of Shri A. Kannan, who is doing money lending business. Based on the material collected from Shri Kannan, the Assessing Officer has initiated the proceedings for violation of sections 269SS and 269T of the Act and referred the matter to the JCIT, Puducherry. No such material was supplied to the assessee. He relied on the decision in the case of CIT v. Lakshmi Trust Co. reported in 303 ITR 99 (Mad). 7. On the other hand, the ld. DR has submitted that the assessee has violated sections 269SS and 269T of the Act and no explanation was given before either of the authorities below. Bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... just and proper. Once the assessee s intention is clear that he chose not to appear before the authorities below, it is not justified for us to set aside the order passed by the ld. CIT(Appeals). Therefore, the request of the ld. Counsel for the assessee is rejected. The only argument of the ld. Counsel for the assessee is that the documents found during the course of survey was not given to the assessee. This argument was not pressed either before the Assessing Officer or before the ld. CIT(Appeals). He has not disputed the material fact of accepting loans in cash and repaying the loans in cash. Therefore, this argument of the ld. Counsel for the assessee cannot be accepted at this stage. Once the assessee obtained loans in cash exceeding ₹ 20,000/- and repaid it in cash, if this factual position is correct, the only option for the assessee is to explain the reasons under what circumstances the assessee has obtained the loans and repaid the loans in cash as prescribed under sections 269SS and 269T. Other materials and arguments of the assessee are irrelevant and immaterial in the context of the present case. In this case, the assessee has not explained under what circumstanc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... si Consultant Corporation v. CIT (supra), the Hon ble Jurisdictional High Court had considered similar issue of imposition of penalty under section 271D of the Act and held that the assessee being received deposits from public in violation of section 269SS, there being no material to show reasonable cause, the Tribunal was justified in restoring the order of the Assessing Officer in imposing penalty under section 271D while reversing the order of the ld. CIT(Appeals) deleting the penalty. In the present case, the assessee has not given any reason to show the reasonable cause for him to obtain loan in cash and repaid the same in cash. In this case, the assessee has received huge amount in cash and repaid the same in cash and no reasons were explained. The judgement of the Hon ble Jurisdictional High Court squarely applies to the case in hand. 11. In so far as the case law relied on by the ld. Counsel for the assessee on the decision in the case of CIT v. Lakshmi Trust Co. (supra), the Hon ble Madras High Court has observed that if there was a genuine and bonafide transaction and the tax payer could not get the loans or deposit by account payee cheques or DD for some bonafide reas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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