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TMI Blog1998 (12) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... oner an opportunity to be heard. The petitioner filed a revision petition before the Commissioner of Income-tax under section 264 of the Income-tax Act, seeking cancellation of the order of penalty levied under section 271E of the Income-tax Act. The Commissioner of Income-tax held that the provisions of section 269T speak of mode of repayment of loan, i.e., by account payee cheque or draft and the section has been introduced to prevent the assessee found in the possession of unexplained cash at the time of search, etc., explaining away the same as loans received from certain parties by cash. He held that the provisions of section 269T were attracted to the facts of the case and he was also of the view that the mere fact that the loans were treated as genuine loans and accepted as genuine by the Department would not be a material consideration for the non-levy of penalty under section 271E of the Act. According to him, it is for the petitioner to prove the presence of reasonable cause for committing. the default under section 269T of the Income-tax Act and the petitioner has not explained the reason for his acceptance of the loans in cash in the first instance from these two lend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. I have carefully considered these submissions of the parties. I am of the view that the Commissioner was quite justified in holding that the petitioner has not established the reasonable cause to repay the loan in cash to the lenders. The fact that the loans have been treated as genuine at the time of completion of the petitioner's assessment or the person to whom the amounts have been repaid have no banking facility are not relevant considerations which would constitute reasonable cause for the petitioner to repay the same in cash. The burden of proving that the petitioner was prevented by reasonable cause from repaying the loan in cash is on the petitioner and when the petitioner has not discharged his burden and when the Commissioner found that there is no reasonable cause, for making the payment in cash, I am not inclined to interfere with the finding rendered by the Commissioner. I am also of the view that the contention of learned counsel for the petitioner that the provisions of section 269T are not applicable as the loans were obtained in the year 1983 or 1984 is not well founded. In my view, the date on which the loans were obtained is not relevant for the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... completion of assessment that the assessee had borrowed certain sums of money and the transactions were regarded as loan transactions. In view of the finding of the Deputy Commissioner of Income-tax as well as the Commissioner of Income-tax that the transactions are loans, the further question that arises is whether the provisions of section 269T are attracted to the loan transactions. We have seen that the provisions of section 269SS which deal with the loans and deposits. On the other hand, section 269T deals with the repayment of deposits. I am of the view that the provisions of section 269T do not deal with repayment of loans. Firstly, there is a distinction between a loan and a deposit. In the case of loan, it is the duty of the debtor to seek the creditor and repay the money to him or to repay the money according to the agreement. But, in the case of the deposit, it is generally the duty of the depositor to go to the banker or the person with whom the money has been deposited as the case may be, and make a demand for the repayment of the same. The distinction between loan and deposit is noticed in two earlier decisions of this court, in the case of V. Balakrishnudu v. Nara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not to cases of repayment of loans. The Delhi High Court held that in case two interpretations are possible, an interpretation which takes the assessee out of the clutches of a penal provision should be preferred. I am in agreement with the reasoning and conclusion of the Delhi High Court. The submission of learned senior counsel for the Commissioner of Income-tax that the expression "deposit" is widely defined under section 269T and it would include the loan is not acceptable, He submitted that considering the object behind the section there is no distinction between loan and deposit. According to him in the case of a loan, the amount is repayable after notice or it may be repayable after the expiry of the period and in any case, the expression deposit is widely defined to include deposits of any nature and therefore, according to him the repayment of loan should also be considered to fall within the scope of section 269T. The expression deposit is defined to include an amount which is repayable after notice and includes a deposit of any nature, but there is no express provision to include the loan obtained by a person-.within the meaning of the term "deposit". All deposits may ..... X X X X Extracts X X X X X X X X Extracts X X X X
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