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TMI Blog2022 (2) TMI 1205X X X X Extracts X X X X X X X X Extracts X X X X ..... ly triggers penalty provision as laid in section 271D unless the sheltered within the umbrella of 273B. Hon ble High Court of Judicature at Bombay in a similar circumstance in Manish Nitin Wadikar [ 2019 (6) TMI 444 - BOMBAY HIGH COURT] held that, where the assessee failed on a given sufficient opportunities to establish any reasonable cause of violation of provisions of section 269SS, per contra makes mere assertion against the proposition of tax authorities without any supporting material in substantiating such assertion, is essentially sufficient to draw conclusion against the assertion made by the assessee, consequently the penal provision shall follow. Tribunal had occasioned to considered the correctness of levy of penalty u/s 271D for the violation of provisions of section 269SS triggered out of bonafide transaction but in the absence of any reasonable cause as contemplated in section 273B in the case of Deepak Sales Properties Pvt Ltd [ 2018 (7) TMI 1314 - ITAT MUMBAI] Held that the penalty u/s 271D is invincible in the absence of reasonable cause. We find no illegality in the penalty order; consequently, we upholding the order of Ld JCIT with no infirmity. - Decided agains ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing officer. 4.2 During the course of penalty proceedings, a show cause notice was served and considering of submission filed by Shri Amit Rai CA, the representative of the assessee [for short "AR"], the Ld JCIT imposed the penalty u/s 271D equivalent to the amount of cash deposit accepted in violation of provisions of section 269SS of the Act. 4.3 In an appeal before CIT(A), the assessee through his authorised representative Shri Amit Rai CA, made representation submitting that, such cash was received as advance towards sales from the prospective buyer of trading goods on behalf of principal supplier and deposited into his account for bank transfer, however this proposal did not yield any relief to the assessee, consequently Ld CIT(A) confirmed the order of penalty. 4.4 Aggrieved by the aforesaid order of tax authorities, the appellant assessee is before this final-fact-finding authority as a forum of last resort assailing the hardship caused by the penalty proceedings. 5. The case was posted for hearing on various occasion and for the reasons stated in the order-sheet, hearing was adjourned from time-to-time. On this date of hearing, none appeared for the assessee. Recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i, CA on behalf of the appellant, contending that such was the single instance of cash receipt against trading advances and actual sales were effected to the depositors, the same was reproduce by the Ld JCIT at para 4 on page 2 of his order as; "That the assessee accepted advance against order from M/s Banshi Lal & Sons ₹ 5.00 Lacs; M/s Choudhary Enterprises ₹ 7.00 Lacs; M/s Dhapriya Tradings ₹ 5.00 Lacs; M/s Hari Om Traders ₹ 5.00 Lacs; M/s H.P. Sons ₹ 5.00 Lacs {the parties} during the year, which was deposited in bank and transferred to the principal for supplying material. This advance was received only once from these parties. On receipt of material from the principal it was sold to the parties thereby settling their accounts. Thus, the amount received from the parties was not of the nature of loan rather it was advance against order." 6.3 Considering the submissions & explanations of the assessee, Ld JCIT rejected the claim to hold such cash deposits as trading advances on the basis of his categorical findings as deduced in the penalty order to the effect that; a. Receipt of cash from five parties totalling to ₹27.00 Lakhs is indeed a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty following catena of judicial precedents including; R K Singhal Vs CIT 221 CTR 412 (Raj), Nandi Dhall Mills Vs CIT 61 Taxmann.com 97 (Mad), Auto Piston Mfg Co Pvt Ltd Vs CIT 37 Taxmann.com 61 (Punjab&Haryana), ITO Vs Nandi Promoters 13 Taxmann.com 213 (Delhi) etc. 7. The levy of penalty arises on the sole violation of provisions of section 269SS and unless we touch upon the prime code which gives birth to penalty it would serve no purpose, hence the provision of 269SS is reproduced for ready reference; 269SS Mode of taking or accepting certain loans, deposits and specified sum. 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 [or through such other electronic mode as may be prescribed], 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 pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovided for certain exclusion for the removal of hardship while transacting with Government, banking institution, state or central corporations and transaction between agriculturist with reasonable restrictions. Except the foregoing exception, there finds no goby in the provision except through the evince of reasonability envisaged in section 273B, hence if any transaction does not fall within the ambit of exception so carved out, or the reasonable cause behind such violation, shall transaction shall be violative of this restrictive provision of section 269SS. 9. In the instance case, the assessee also pleaded that the part of the transaction has been effected through banking channel and thereby establishes the genuineness thereof for not bring into the ambit of 269SS is not acceptable in the light of the decision rendered by the Hon'ble Apex Court in the case of ADI Vs Kum A B Shanti (2002) reported at 255 ITR 258, wherein the Lordships have held that, existence of genuine or bonafide transaction is not sufficient to attract relief u/s 273B of the Act and it has to be established clearly on records that on account of some bonafide reasons the assessee could not get loan/deposit by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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