9911796707
TMI Blog1997 (1) TMI 21X X X X Extracts X X X X X X X X Extracts X X X X ..... ejection of such applications on the grounds that the penalty which was sought to be stayed, is illegal and ss. 269SS and 269T of the IT Act, 1961, are ultra Ores the Constitution and, therefore, no demand could have been issued against the petitioners. 3. The basic argument of learned counsel for the petitioners for challenging the vires of ss. 269SS and 269T of the IT Act (hereinafter referred to as "the Act"), is based on a judgment of the Madras High Court in the matter of Kumari A.B. Shanthi alias Vennira Adai Nirmala vs. Asstt. Director of Inspection, Investigation (1992) 197 ITR 330 (Mad) : TC 70R.386. According to learned counsel for the petitioners, s. 269SS of the Act makes the "borrower" of a sum more than Rs. 20,000 now and Rs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the act of the respondents has the effect of putting the petitioner in multiple jeopardy. His income under s. 68 of the Act is enhanced by adding the entries of such transaction. After this, under ss. 271D and 271E of the Act, penalty is imposed as the petitioner is held guilty of transaction under ss, 269SS and 269T, respectively' Multiple penalisation for the same offence is hit by the principles of double jeopardy. It is further argued that the penalties have been imposed on protective basis. It has been offered that, if the petitioner agrees for addition of such income under s. 68 of the IT Act then the penalties can be waived. That kind of order cannot sustain the penalty. 6. Another contention of learned counsel for the petitioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n and strike down the section. In this regard we draw strength from a Supreme Court pronouncement in the case of D. K. Yadav vs. J. M A. Industries Ltd. (1993) 83 FJR 271 (SC) (1993) 3 SCC 259 wherein it has been held, that once an authoritative law is laid down after considering all the relevant provisions and the previous precedents, it is no longer open to recanvass the same on new grounds or reasons that may be put forth in its support unless the Court deemed appropriate to refer it to a larger Bench in the larger public interest to advance the cause of justice. Every new discovery or argumentative novelty cannot undo or compel reconsideration of a binding precedent. It does not lose its authority "merely" because it was badly argued, i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... borrower and lender cannot be presumed to be similarly situated as far as imposition of penalty is concerned. The Division Bench of the Gujarat High Court thus, also upheld the constitutional validity of s. 269SS of the Act. On the strength of the aforesaid decision it has been urged on behalf of the respondent-Department that the writ petition is meritless. 9. We have considered the rival submissions. The foundation on which Kumari A. B. Shanthi's case proceeds is that-like should be treated alike. The learned single Judge of the Madras High Court has held that when "lender" and "borrower" stand on the same footing in a transaction of loan then they should be treated similarly. The observation of the learned single Judge of the Madras ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not germane from the provisions as an assessee can always show a reasonable cause before any penalty is imposed under s. 269SS and, therefore, it is not an unbridled and unchecked power. We are in agreement with the view taken by the Division Bench of the Madras as also of the Gujarat High Courts and do not find any unconstitutionality in the provisions of s. 269SS and, on the same parity, the validity of s. 269T is also upheld. 10. The question raised by learned counsel for the petitioners regarding mens rea is a subject-matter which the Departmental authorities have to consider. The absence of mens rea is a question which does not touch the constitutional validity of the sections and similarly hardship can also be said to be a feature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The genuineness is the basic ingredient. This being absent it is not one default-with every step a different offence is committed and that brings the act of the petitioners out of the double jeopardy jargon. In any case, no such case is made out from the facts. Each penalty is prescribed for a different kind of violation. 13. The law laid down by the Madras High Court and the Gujarat High Court in upholding the constitutional validity of s. 269SS of the Act appears to be sound and the view taken by the learned single Judge of the Madras High Court in Kumari A. B. Shanthi's case seems to us as being unreasonable, being a judgment passed in utter disregard of the principles of judicial propriety because the learned single Judge of the Madr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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