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TMI Blog2021 (2) TMI 729X X X X Extracts X X X X X X X X Extracts X X X X ..... as not a reasonable cause for the said failure of taking cash loan exceeding ₹ 20,000/- Assessee do not deserve any immunity from paying the penalty u/s 271D of the Act by taking the shield/cover of Section 273B of the Act claiming it to be a reasonable cause for the said failure. We accordingly set aside the finding of Ld. CIT(A) and confirm the action of the Ld. A.O levying the penalty u/s 271D - Decided in favour of revenue. - ITA No. 539/Ind/2018 - - - Dated:- 16-2-2021 - HON BLE KUL BHARAT, JUDICIAL MEMBER AND HON BLE MANISH BORAD, ACCOUNTANT MEMBER Revenue by : Shri Harshit Bari, Sr.DR Assessee by : Shri Girish Agrawal Miss. Nisha Lahoti, ARs ORDER PER MANISH BORAD, A.M The above captioned appeal filed at the instance of the Revenue pertaining to Assessment Year 2013-14 is directed against the orders of Ld. Commissioner of Income Tax (in short Ld. CIT], Ujjain dated 21.03.2018 which is arising out of the order u/s 271D of the Income Tax Act 1961(In short the Act ) dated 28.07.2017 framed by JCIT, Range-2, Ujjain. 2. The sole grievance raised in this appeal is against the finding of Ld. CIT(A) deleting the penalty levied u/s 271D o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... purchase the land for setting up a petrol pump assessee deserves immunity for paying the penalty in terms of Section 273B of the Act as there was a reasonable cause which lead to taking cash loan in excess of ₹ 20,000/-. 6. Now the revenue is in appeal before the Tribunal. 7. Ld. Departmental Representative supported the order of Ld. A.O. 8. Per contra Ld. Counsel for the assessee vehemently argued apart from supporting the finding of Ld. CIT(A) CIT findings and also referring to the written submissions throwing light on the legislative intent for insertion of provisions of section 269SS of the Act, business exigencies for acceptance of loan by the assessee no finding/doubt raised by the Ld. A.O about the genuineness of the transaction of loans taken by the assessee in cash and placing reliance of various decisions. Relevant extract of the written submissions of Ld. Counsel for the assessee is reproduced below:- A. Legislative intent for insertion of provisions of section 269SS of the Act 1. Section 269SS was inserted by the Finance Act, 1984 with effect from 1-4-1984 and was made operative from 1-7-1984. 2. The Income-tax Department in course of sea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... st para] Proceedings were completed u/s 143(3) wherein following two additions were made - [AO page 3 PB 16] Bank interest ₹ 24,095 Low household expenses ₹ 1,00,000 During the impugned year, assessee had received a letter of intent for dealership at Ujjain of Indian Oil Corporation Limited (IOCL) dated 01.11.2012. Through this letter, it has been very specifically mentioned by IOCL that assessee is required to procure the particular plot survey no. 168/3/1 and 177/1 in village Panwasa, Ujjain within two months from the date of the letter. [PB 31-32] 4. The sellers of the plot required that the payment be made in cash only then assessee. Pursuant to this, assessee arranged for the cash by way of taking loan from various relatives and friends. The plot was registered in the name of assessee on 02.01.2013 for a consideration of ₹ 1,50,00,000. [PB 19-24] It was for the above mentioned business exigency as compelled by IDC through its Lol, that the loan was availed in cash during the impugned year. In the assessment proceedings completed u/s 143(3), no addition has been made on account of the unsecured loan availed by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The transaction took place due to compelling situation as the assessee samiti was short of fund and was to make the payment before 31.3.2007, being the last day of the financial year, it was not possible to receive the amount through account payee cheque. Even the Ld. Assessing Officer has neither disputed the source of amount nor contradicted the claim of the assessee. As there is no such finding in the assessment order as well as in the impugned order. In such a situation, if the scope of Section 273B is analyzed, then the Ld. Assessing Officer has discretion not to levy penalty, especially when the transaction was genuine and there was a reasonable cause of payment in cash. In such a situation, the decision of Hon'ble Gauhati High Court in the case of Shri Bhagwati pd. Bajoriya (HUF) comes to the rescue of the assessee, because President of the Society is a person, who is part and partial of the society and at the time of need, it is expected that the society is helped, especially when the transaction was not in genuine. A harmonious construction of Sections 269SS, 271D and 273B is that a construction, which preserve the exercise of power in favour of assessee Under the circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... loans were taken in cash penalty u/s 271D of the Act was initiated and subsequently levied for the contravention of provisions of section 269SS of the Act. 12. The penalty u/s 271D of the Act is attracted if the assessee fails to comply with the provisions of Section 269SS of the Act which reads as follows:- No person shall take or accept from any other person (herein referred to as the depositor), any loan or deposit or any specified sum, otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account, if,- (a) the amount of such loan or deposit or specified sum or the aggregate amount of such loan, deposit and specified sum; or (b) on the date of taking or accepting such loan or deposit or specified sum, any loan or deposit or specified sum 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: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... specified sum means any sum of money receivable, whether as advance or otherwise, in relation to transfer of an immovable property, whether or not the transfer takes place. 13. In the instant case the alleged loans have been taken in cash and there is no dispute with regard to this fact at the end of both the parties. So when the loans have been taken in cash and the assessee has failed to comply with the provisions of Section 269SS of the Act then Section 271D comes into picture which provides for a levy of penalty for a sum equal to the amount of loan or deposit or to specified sum so taken or accepted. 14. Now the question comes that under what circumstances the penalty cannot be imposed and for this, case of the assessee should falls under the provisions of Section 273B of the Act which reads as follows:- 273B. Notwithstanding anything contained in the provisions of clause (b) of sub-section (1) of section 271, section 271A, section 271AA, section 271B, section 271BA, section 271BB, section 271C, section 271CA, section 271D, section 271E, section 271F, section 271FA, 99[section 271FAB,] section 271FB, section 271G, 1[section 271GA,] 2[section 271GB,] section 271H, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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