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TMI Blog2016 (3) TMI 1298X X X X Extracts X X X X X X X X Extracts X X X X ..... 2-13. The only effective ground raised in the appeal for assessment year 2008-09 relates to deletion of penalty levied under section 271E of the Income Tax Act, 1961 [ Act in short] and for the assessment year 2012-13, the Revenue has raised the ground with regard to deletion of penalty levied under section 271D of the Act. I.T.A.No.262/Mds/2015 2. Brief facts of the case are that a survey under section 133A of the Act was conducted on 08.09.2011 in the case of Shri A. Kannan, Prop. Vadamalayan Finance, No. C-4, II Floor, Thiyagaraja Apartment, First Main Road, Thanthai Periyar Nagar, Pondicherry 605 005. Books of account and supporting documents were impounded under section 133A(3) of the Act during the course of survey. The finance operates from the residence of Shri A. Kannan from the above address. The survey revealed the following facts. Shri A. Kannan himself writes the books of account for the finance. His Finance is not licensed by the state government authorities for financing activities. He lends money on pro-notes and returns the same on repayment. He takes the interest portion on loan on the day of lending and collects the balance in 10 monthly instalments. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 271E of the Act of ₹.20,00,000/-. 4. On appeal, after considering the submissions of the assessee and by following the decision of the Coordinate Bench of the Tribunal in ITA Nos. 1905, 1906, 1907 1908(Mds)/2013 for the assessment years 2009-10 to 2012-13 dated 31.10.2013, the ld. CIT(A) directed the Assessing Officer to delete the penalty levied under section 271E of the Act. 5. Aggrieved, the Revenue is in appeal before the Tribunal. The ld. DR has relied on the decision of the Tribunal in the case of Shri P. Muthukaruppan v. ACIT in I.T.A. Nos. 220 to 228/Mds/2014 dated 29.05.2014 as well as decision of the Jurisdictional High Court in the case of P. Muthukaruppan v. JCIT [2015] 375 ITR 243 and prayed that the order of the ld. CIT(A) should be reversed. 6. On the other hand, the ld. Counsel for the assessee has submitted that the issue involved in this appeal is covered in favour of the assessee by the decision of the Coordinate Bench of the Tribunal in I.T.A Nos.1905 to 1908/Mds/2013 in assessee s own case passed under section 271E of the Act. 7. We have heard both sides, perused the materials on record and gone through the orders of authoriti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as representing an opening balance, except for a mere statement, there are hardly any materials to show that the said amount was an opening balance. Considering the series of transactions on taking cash loan from various parties, it is difficult to accept the case of the assessee. The Tribunal was therefore justified in law in confirming the levy of penalty under s. 271D. Except for mere statement that the receipt of amount in cash was on account of the business exigency and to meet the liquidity, there is hardly any material to show that in fact there was a real exigency that compelled the assessee to go for cash loan and Tribunal was therefore justified in law in confirming the levy of penalty under s. 271D. 10. Further, in the case of Kasi 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4, 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 the aggregate amount referred to in clause (b) is twenty thousand rupees or more: Provided that the provisions of this section shall not apply to any loan or deposit taken or accepted from, or any loan or deposit taken or accepted by,- (a) Government; (b) any banking company, post office savings bank or co-operative bank; (c) any corporation established by a Central, State or Provincial Act; (d) any Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956); (e) such other institution, association or bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n established by a Central, State or Provincial Act; (iv) any Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956) ; (v) 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, notify in this behalf in the Official Gazette. Explanation:-For the purposes of this section,- (i) 'banking company' shall have the meaning assigned to it in clause (i) of the Explanation to section 269SS ; (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 any loan or deposit of money which is repayable after notice or repayable after a period and, in the case of a person other than a company, includes loan or deposit of any nature. 9. The provisions of sections 269SS and 269T mandate that no amount should be received in cash in excess of the amount prescribed thereunder. The statement of the financier produced by the counsel for the Department and also relied upon by the appellant would be a case of money-lending busines ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of prejudice caused to the Revenue, because the nature of transactions conducted by the financier with the assessee and third parties are clearly not in accordance with the provisions of the Act. In one statement the financier clearly states that he used to conduct the money-lending business in the names of third parties. The assessee on his part has been repeatedly, for every assessment year, conducted the business in the same manner by receiving and repaying the loan amount in cash. Hence, the same cannot be called as a bona fide transaction and there is a reasonable cause. As a matter of fact, the conduct of the parties is more important to exercise the discretion under section 273B of the Act. As the assessee has not passed the test of reasonable cause showing his bona fides, the provisions of section 273B do not get attracted, more so, in a case of no explanation offered in spite of giving repeated chances therefor. On the facts in issue before us, there appears to be no justification to claim the benefit of section 273B of the Act. 11. In the present case, as mentioned above, the appellant has been charged for violation of the provisions of section 269SS and section 26 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or any other important circumstance for the breach and that too repeatedly. As a matter of fact, section 273B shows that no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provisions, if he proves that there was reasonable cause for the said failure. In the case on hand, as mentioned above, when the appellant was issued with the show-cause notice under sections 271D and 271E on December 16,2011, having sent a letter dated January 11, 2012, seeking adjournment, was issued with another notice dated February 1,2012. Again sending another letter dated February 16,2012, sought another adjournment for one more week on the ground that a close associate and senior citizen of his community passed away on February 16, 2012. Once again after receiving fresh notice dated February 16, 2012, and another notice dated February 24, 2012, the appellant finally sent Mr. V. Jayachander, chartered accountant, who also filed adjournment letter on July 24, 2012. When the said Mr. V. Jayachander, chartered accountant appeared on May 11, 2012, thereafter, sadly, no one appeared. That apart, the assessee had not even filed any reply nor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t applicable to the present case. 13. Similarly, the judgment of the Punjab and Haryana High Court in the case of Sunil Kumar Goel (supra) relied upon by the learned counsel for the appellant is also inapplicable to the present case since, in the said case, the Tribunal reached its conclusion by holding that a reasonable cause was shown by the assessee for the failure to comply with the provisions of section 269'1 of the Act at the very first instance before the assessing authority. In the present case, as mentioned above, the appellant has not submitted any explanation whatsoever. Similarly, in yet another judgment of the Division Bench of this court, in which one of us R. Sudhakar J., who was speaking for the court has held clearly that the assessee therein had shown reasonable cause for availing of loan from the agriculturists by properly placing the genuineness of the creditors who have been verified and the said transaction being found incapable of any suspicion by the authorities, hence, on that score, this court refused to interfere with the order of the Tribunal, however, in the present case, as there was no explanation offered for availing of such a huge cash loan t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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