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TMI Blog1996 (2) TMI 562X X X X Extracts X X X X X X X X Extracts X X X X ..... from Shri Jayesh Goel. The Assessing Officer initiated proceedings under section 271-D read with section 269-SS of the Income-tax Act, 1961. It was explained before the Assessing Officer that the assessee took the loans because he booked a flat with Lok Housing Constructions Ltd. at a cost of ₹ 4,21,000, for which he had to make deposit to the tune of ₹ 1,60,000. Over and above, he made arrangement with Status Enterprises for the purchase of a dental chair, for which he was required to keep ready money. The assessee also had to make payments for various purchases of instruments for the clinic. Since the loans were genuinely taken, it was submitted that no penalty should be imposed under the above section. The Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loans taken. In the assessment for the year under consideration, there is no objection raised to any of the loans taken during the year. In such a case, the genuineness of the loans is never in question. 5. The provisions of section 271D have been introduced by the Finance Act, 1984. In the Budget Speech, the Hon ble Finance Minister made the following reference: With the reduction in rates and expeditious disposal of assessments, I believe there can now be no excuse for any leniency to be shown to those who abuse our laws. Such cases will necessarily have to be dealt with severely. In order to discourage tax avoidance and tax evasion, I am also introducing some further measures. In all cases where the annual turnover exceeds ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g 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) and the amount or the aggregate amount remaining unpaid is ₹ 10,000 or more. The proposed prohibition would also apply in cases where the amount of such loan or deposit, together with the aggregate amount remaining unpaid on the date on which such loan or deposit is proposed to be taken, is ₹ 10,000 or more. 24. The proposed prohibition will, however, not apply to any loan or deposit taken or accepted from, or any loan or deposit taken or accepted by the following, namely: (a) Government; (b) any banking company, post office savings bank or any co- o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Motilal Padampat Sugar Mills Co. Ltd. vs. State of Uttar Pradesh . (1979) 118 ITR 326 (SC) held that there is no presumption that every person knows the law. It is often said that everyone is presumed to know the law, but that is not a correct statement; there is no such maxim known to the law. This ratio of the decision of the Hon ble Supreme Court is squarely applicable in the case of the assessee who is a dentist by profession. Even if there is any ignorance of law, which resulted in infraction of law, the default is in the nature of technical or venial infraction of law which does not prejudice the interests of the Revenue, as no tax avoidance or tax evasion is involved in this case. I hold accordingly and cancel the penalty. 7. In ..... X X X X Extracts X X X X X X X X Extracts X X X X
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