9911796707
TMI Blog2002 (3) TMI 6X X X X Extracts X X X X X X X X Extracts X X X X ..... irtue of section 271D of the Act of 1961 or the assessing authority has the jurisdiction and authority to consider the facts and circumstances in which the assessee made default of non-complying the provisions of section 269SS of the Act of 1961 and can waive the penalty. - the questions are answered in favour of the assessee. The appeal is dismissed. - - - - - Dated:- 22-3-2002 - Judge(s) : P. P. NAOLEKAR., A. C. GOYAL. JUDGMENT The judgment of the court was delivered by P.P. NAOLEKAR J.-The following substantial questions of law arise for adjudication by this court: "1. Whether, on the facts and circumstances of the case, the Tribunal had erred in law in deleting the penalty under section 271D for violation of the provisions o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provided under section 271D. Accordingly he imposed a penalty amounting to Rs. 2.5 lakhs vide order dated June 23, 1999. On first appeal, the Commissioner of Income-tax (Appeals) also rejected the assessee's plea of reasonable cause and confirmed the penalty vide order dated October 1, 1999. The assessee went in appeal before the Income-tax Appellate Tribunal. Having heard the rival submissions of the parties, the Tribunal came to the conclusion that the assessee is an exporter and in urgent need of the time bound supplies, the assessee took a loan of Rs. 2.50 lakhs from his brother-in-law, Mukesh Manwani. It was also observed that the genuineness of the loan has not been doubted by the Assessing Officer and the assessee immediately depos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... udication of the question referred, read thus: "269SS. No person shall, after the 30th day of June, 1984, take or accept from any other person (hereafter in this section referred to as the depositor), any loan or deposit otherwise than by an account payee cheque or account payee bank draft if,- (a) the amount of such loan or deposit or the aggregate amount of such loan and deposit; or (b) on the date of taking or accepting 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), the amount or the aggregate amount remaining unpaid; or (c) the amount or the aggregate amount referred to in clause (a) together with the amount or t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccepted in contravention of the provisions of section 269SS. A plain reading of section 271D gives an impression that if there is a contravention of the provisions of section 269SS, the assessee shall be liable to pay a penalty equal to the amount which has been taken as loan or deposit and there is no discretion left with the assessing authority to waive the penalty considering the facts and circumstances in which the loan or deposit was taken by the assessee. But when we read section 271D with section 273B of the Act of 1961 which begins with the non obstante clause "Notwithstanding anything contained in the provisions of section 271D", it is clear that in spite of the provision of section 271D, the enactment following, namely, "no penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... amount of loan, in fact, was received by him from Mukesh Manwani. It was only to meet the emergent need of time bound supplies; the loan was taken as he did not have sufficient time and funds and that there was no intention to violate the provisions of section 269SS of the Act of 1961. The Tribunal, in these circumstances, has arrived at a conclusion that the cash loan was taken by the assessee in the exceptional circumstances and that it is a case of reasonable cause, and as a consequence thereof set aside the penalty imposed by the revenue authorities. As we have already held that on a reasonable cause being shown, the assessing authority has jurisdiction not to impose the penalty and, therefore, in our opinion, the Tribunal has acted in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
