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TMI Blog2019 (4) TMI 293X X X X Extracts X X X X X X X X Extracts X X X X ..... nsidered as a reasonable cause or as a compelling circumstance under which the mandate of Section 269SS can be violated. It cannot be termed as a reasonable cause contemplated under Section 273B to condone the violation. Hence, we are of the opinion that, the appellant has not succeeded in bringing the case within the ambit of Section 273B, warranting exoneration from imposition of penalty under Section 271D. - Decided in favour of revenue - ITA. No. 196 of 2014 - - - Dated:- 8-3-2019 - MR C. K. ABDUL REHIM AND MR R. NARAYANA PISHARADI, JJ. For The Appellant : ADVS. SRI. ANIL D. NAIR, KUM. SOUMYA PRAKASH, SMT. C. S. SULEKHA BEEVI, SRI. JOSE JOSEPH (CHEMPLAYIL) And SRI. R. SREEJITH For The Respondent : ADV. SRI. JOSE JOSEPH, SC, GOI FOR INCOME TAX JUDGMENT Abdul Rehim, J The above appeal, filed under Section 260A of the Income Tax Act, 1961 ( the Act for short) is instituted against an order of the Income Tax Appellate Tribunal, Cochin Bench, in ITA No.204/Coch/2014, dated 4.7.2014. 2. Assessment on the income of the appellant with respect to the year 2009-10 was completed under Section 143(3) of the Act through the order of the Assessing Au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee from taking or accepting the loans through account payee cheque or bank drafts. Therefore it was found that, there is no reasonable cause shown for accepting the loans otherwise through account payee cheques or drafts, in violation of Section 269SS of the Act. The Joint Commissioner also found that, it is not an isolated instance of acceptance of the loan amount in cash. The loans were accepted from seven different persons on different dates in different amounts. Therefore it was found that the assessee does not deserve the benefit of Section 273B. Accordingly, penalty proposed to the tune of ₹ 24,57,000/-, was confirmed. 3. The assessee challenged the order of the Joint Commissioner in appeal before the Commissioner of Income Tax (Appeals). The Commissioner (Appeals) had allowed the appeal and the order imposing the penalty was set aside, on the finding that the source for receipt of the loans was properly explained and it is proved that the amounts were later returned. It was found that the Assessing Officer, after being convinced of the above said fact, has not noted any violation of Section 269SS. Therefore it was found that there seemed to be no attempt of eva ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... from ₹ 1,50,000 to ₹ 4,00,000/- and credited those amounts into his bank accounts. It is also not in dispute that the contravention in this regard will attract imposition of penalty under Section 271D, to the tune of a sum equal to the amount of such receipt. The assessee can be exonerated from the liability only if he could prove that there was reasonable cause for the failure in not accepting the loan amounts either in crossed cheques or demand drafts. So the crucial question to be considered is as to whether the appellant was successful in establishing any reasonable cause, with respect to the above said failure or violation, as contemplated under Section 273B. 8. The factum of repayment of the loans on the date of their receipt itself through crossed cheques drawn in the name of the lenders, and the non-utilization of the money by the assessee for any of his business purposes, were established before the authorities concerned. The purpose for acceptance of the loans and crediting of the amounts in the bank account of the assessee is also not seen disputed. Fact that there was no attempt of evasion of payment of tax or induction of black money into the business, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of account payee cheque or demand draft, then the penalty shall not be levied. 11. This Court had occasion to deal with the issue again in the case of NSS Karayogam v. Commissioner of Income Tax [(2014) 364 ITR 81 (Kerala)]. Referring to the decision in K.V George's case (supra) it was reiterated that, the only consideration would be whether there existed any reasonable cause for receiving the amount by way of cash or whether there was a reason for not receiving the loan by way of account payee cheque or demand draft. It is held that burden is on the assessee to establish what was the reasonable cause. 12. In a still later decision of this Court in Grihalakshmi vision v. Additional Commissioner of Income tax [(2015) 379 ITR 100 (Kerala)], while confirming the orders passed imposing penalty by upholding the findings that the assessee had failed to prove any reasonable cause as contemplated under Section 273B, it was observed that, to take the benefit of Section 273B the assessee must prove why the cash loan was accepted and whether there was any reasonable cause for the failure to accept it in cheque or draft. The contention raised on the facts of the said case that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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