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TMI Blog2021 (9) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... of Section 269SS of the Act, therefore, in our view, the A.O. was under an obligation to independently prove by carrying out necessary enquires or bringing on record evidence that the cash loan was taken by the assessee from Shri Aditya Kumar Sharma in contravention of provisions of Section 269SS. A.O. as well as the CIT(A) fell in error by merely relying upon the copies of the order of the Magistrate regarding conviction of the accused, more particularly when there was no independent evidence or material brought on record by the A.O. to the effect that the cash loan was taken or accepted by the assessee in contravention of Section 269SS of the Act. Merely because the Magistrate on a complaint filed had convicted the assessee on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 61. The action of the ld. CIT(A) is illegal, unjustified, arbitrary and against the facts of the case. Relief may please be granted by quashing the penalty of ₹ 2,50,000/- imposed by the ld. AO and confirmed by the ld. CIT(A). 2. The hearing of the appeal was concluded through video conference in view of the prevailing situation of Covid-19 Pandemic. 3. Having considered the rival contentions and carefully perused the material placed on record. From the facts of the present case, we noticed that the penalty in this case was levied by the A.O. on the ground that the assessee had obtained loan of ₹ 2.5 lacs from one Shri Aditya Kumar Sharma in cash and towards repayment of such loan, the assessee had issued one cheque, whi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e loan, therefore, the said Aditya Kumar Sharma who was having blank signed cheque of the assessee misused the said cheque and got dishonoured and filed a complaint U/s 138 of the N.I. Act r.w.s. 190 of the Cr.PC. The stand of the assessee from the very beginning had been specific that he had not actually received any cash loan from Shri Aditya Kumar Sharma hence question of penalty U/s 271D of the Act do not arise. Although, the assessee has also submitted that the said Aditya Kumar Sharma is a person of criminal nature and various FIR in different police station are already lodged against him and the copies of the said documents were submitted before the A.O. 5. We noticed that, although, the Magistrate had convicted the assessee on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the effect that the cash loan was taken or accepted by the assessee in contravention of Section 269SS of the Act. We are further of the view that merely because the Magistrate on a complaint filed had convicted the assessee on the ground of dishonoring of cheque U/s 138 of the N.I. Act it cannot automatically lead to presume that the assessee had in fact taken or accepted cash amount of ₹ 2.5 lacs as loan in contravention of provisions of Section 269SS of the Act. The proceedings before Income tax authorities are independent proceedings and the A.O. being the adjudicator as well as investigator was under an obligation to carryout independent enquiries and to bring on record cogent and convincing independent evidence to specifically ..... X X X X Extracts X X X X X X X X Extracts X X X X
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