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TMI Blog2007 (8) TMI 328X X X X Extracts X X X X X X X X Extracts X X X X ..... or the appellant. T. Ravikumar for the respondent. JUDGMENT The judgment of the court was delivered by D. Murugesan J.- All these appeals are admitted on the following substantial questions of law : "(i) Whether the Tribunal is correct in confirming the order imposing penalty under section 271D of the Act on the facts and in the circumstances of the case ? (ii) Whether the Tribunal is correct in concluding that there was reasonable cause for accepting deposits in cash exceeding Rs. 20,000 with reference to the provisions of section 273B of the Act ? (iii) Whether the Tribunal is correct in not considering the scope and the purpose of the provisions of section 271D of the Act, especially with reference to sections 269SS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f few deposits in cash was due to ignorance of law and the partners were not aware of the implications of section 269SS of the Income-tax Act. (3) The deposits were accepted from people of various walks of life and some of them even do not have a bank account. Of demand draft/cheque was insisted upon, then they would have chosen would choose to approach some other finance company. (4) The customers come after the close of banking hours. (5) The entire deposits were received form outside source and no deposits were made by the partners. (6) The quantum of non-compliance is not very substantial com-paring with the total deposits accepted. (7) The acceptance of deposits is for business purpose of the group concerns, which require ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and accordingly, allowed all the appeals. Hence, the present tax appeals at the instance of the assessees. 9. We have heard learned counsel for the appellants and as well as the learned standing counsel appearing for the Income-tax Department. 10. Learned counsel for the appellants has once again reiterated all the contentions raised before the Assessing Officer and further submitted that in view of the findings of the Income-tax Appellate Tribunal for rejecting the claim on the ground that there is no material placed by the assessee to sustain the claim that the depositors have no bank account in Chennai, to accept the deposit in cash, and the shortage of cash in the business which led the assessees to accept the deposits in cash, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of real estate and property development carried on by the related concerns, and there was reasonable cause and, therefore, the penalty would not have been imposed in view of the provisions of section 273B of the Act, the same was rejected by the Assessing Officer. However, the Commissioner of Income-tax (Appeals) found that penalty under section 271 was not automatic and on the facts and circumstances of the case, it should be analysed to ascertain as to the business exigencies. Again, the judgment of the Commissioner of Income-tax (Appeals) was negatived by the Special Tribunal. 14. Though the provisions of section 269SS contemplates that no person shall, after June 30, 1984, take or accept from any other person any loan or deposit o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income-tax (Appeals), we do not find any materials to support the findings as to the reasonable cause except quoting the provisions. 18. Precisely, for the said reason only the Income-tax Appellate Tribunal had come to the conclusion that the assessee has not produced any material whatsoever to sustain the plea of reasonable cause either by producing the materials to show that the depositors have no bank account, and consequently to accept the deposits in cash. The Tribunal came to a correct conclusion that the assessees have also not demonstrated the shortage of cash in the business, which made the assessees to accept the cash. It also observed that the assessees have not shown that there was cash deficiency to meet the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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