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TMI Blog2015 (8) TMI 1214X X X X Extracts X X X X X X X X Extracts X X X X ..... se receipts were anything other than loans or deposits. There is no law that every receipt from a partner or a sister concern cannot, in all circumstances, be treated as a loan or deposit. On the other hand, the nature of the receipt would depend upon the agreement between the parties and the evidence that is produced. As we have already stated, there is no material whatsoever to accept the case of the assessee that these are loan or deposit. In such circumstances, the findings of the Assessing Officer confirmed by the Appellate Commissioner and the Tribunal that it was a loan or deposit that was received by the assessee also has to be upheld and we do so. - Decided in favour of the Revenue - ITA No. 83 & 86 of 2014 - - - Dated:- 7-8-2015 - Antony Dominic And Shaji P. Chaly, JJ. For the Petitioner : Sri P Balakrishnan (E), Sri Mohan Pulikkal, Sri P P Narayanan and Sri R Anas Muhammed Shamnad For the Respondent : Sri PKR Menon, SC and Sri B Ramachandran, Addl. CGSC JUDGMENT Antony Dominic, J. These appeals are filed by the assessee impugning the orders passed by the Tribunal in ITA Nos.103/11 and 104/11 whereby the orders passed under Sections 271D and 271E ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng for the Revenue. 6. Section 269SS of the Act, occurring in Chapter XXB, provide for mode of taking or accepting certain loans and deposits. Insofar as it is relevant, the Section provides that no person shall, after 30th day of 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 aggregate amount of such loan or deposit is ₹ 20,000/- or more. Section 269T of the Act, also occurring in Chapter XXB of the Act, provides for the mode of repayment of certain loans or deposits. As per this provision, no firm or other person shall repay any loan or deposit made with it otherwise than by an account payee cheque or account payee bank draft drawn in the name of the person who has made the deposit if the amount of loan or deposit together with the interest, if any,payable thereon is ₹ 20,000/- or more. 7. Section 271D and 271E of the Act provides for penalty for failure to comply with the provisions of Section 269SS and 269T. As per these provisions, contravention of provisions of Section 269SS and 269T renders the person concerned liable to pay, by way of penalty, a sum equal to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 69T. As per sub section (2) to both these sections any penalty imposable under sub section (1) of these provisions shall be imposed by the Joint Commissioner. It was, therefore, that the matter was referred to the Joint Commissioner who passed orders on 29.7.2008 levying penalty. 10. Question to be considered is whether proceedings for levy of penalty, are initiated with the passing of the order of assessment by the Assessing Officer or whether such proceedings have commenced with the issuance of the notice issued by the Joint Commissioner. From statutory provision, it is clear that the competent authority to levy penalty being the Joint Commissioner. Therefore, only the Joint Commissioner can initiate proceedings for levy of penalty. Such initiation of proceedings could not have been done by the Assessing Officer. The statement in the assessment order that the proceedings under Section 271D and E are initiated is inconsequential. On the other hand, if the assessment order is taken as the initiation of penalty proceedings, such initiation is by an authority who is incompetent and the proceedings thereafter would be proceedings without jurisdiction. If that be so, the initiation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... examined the question whether this was a reasonable cause as provided under Section 273B. Answering this question, the Assessing Officer has stated thus: The said replies do not give 'reasonable cause' of failure to repay 'otherwise' than by the account payee cheque or, account payee bank draft. The assessee does not state any 'objective satisfaction' regarding cash repayment of ₹ 2,97,000/-. The assessee also does not say anything about availability of banking facility and maintenance of bank accounts by both parties (the person who has paid loan/deposit and the person who has received such loan/deposit) or, Nothing has been stated about banking transaction facilities/knowledge of both the assessee firm and its partners/sister concerns. But why the partners/sister concerns of the firm were paid cash loans whereas banking facilities are available for both the firm and the partners/sister concerns. I found no reasonable circumstances compelling the assessee firm to repay cash loans to its partners/sister concerns without proving the receipts and payments both were made beyond normal banking hours or beyond the availability of banking facilities. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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