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TMI Blog2024 (10) TMI 527X X X X Extracts X X X X X X X X Extracts X X X X ..... issued by the Reserve Bank of India (RBI) dated 9th March 2017 gives another plausible view hence, we find reasonable cause u/s 273B of the Act in peculiar facts of the case. We also find that transaction in question is genuine. Therefore, we delete the levy of penalty u/s 271E of the Act. Appeal of the assessee is allowed. - Hon ble Shri Manu Kumar Giri, Judicial Member And Hon ble Shri S.R. Raghunatha, Accountant Member For the Appellant : Shri S. Dwarakesh, FCA For the Respondent : Dr. Samuel Pitta, IRS, JCIT. ORDER PER MANU KUMAR GIRI (JUDICIAL MEMBER) This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NF ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the legislation . 3. Brief facts of the case are that assessee is engaged in the business of Real Estate. For the subject assessment year, the Appellant filed his return of income under section 139(4) of the Income Tax Act, 1961 (in short the Act ) on 30th March 2015. In the return of income, the Appellant declared a total income of Rs. 41,98,650 and paid resultant tax liability of Rs. 11,24,095/-. The Appellant has availed a vehicle loan from Mahindra and Mahindra Financial Services Ltd (Mahindra') which is a Non Banking Financial Company ('NBFC'). The Appellant has identified a buyer and directed the buyer to repay the loan before taking delivery of the vehicle. The buyer has subsequently repaid the loan by way of cash payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t . Aggrieved assessee is in appeal before us. 5. Summary of the arguments of the ld.Counsel for the assessee: a. Intention of the Section 269T of the Act does not apply to banking companies; b. Considering the intention of the legislation enacting the provisions of section 269SS and 269T by itself cannot be applied to the appellant s case on the ground that there was no intention to generate black money; c. The courts have been treating NBFCs at par with banking companies for income tax purposes [referred CIT V. KEC Holdings Ltd (IT Appeal No.221 of 2012 dated 11.06.2014; CIT Vs Mahila Seva Sahakari Bank Limited (Cooperative Bank) (2017) 395 ITR 324 (Gujrat High Court) and CIT Vs Vasisth Chai Vyapar Limited (NBFC) 410 ITR 244 SC] ; d. No p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing NBFCs at par with banking companies for income tax purposes . g. The assessee has submitted paper book consisting of 166 pages which includes written submissions filed before the CIT (A), National Faceless Appeal Centre, Receipt issued by Mahindra and Mahindra Financial Services Ltd, judgments of Hon ble Supreme Courts and various High Courts. The index of the same is reproduced hereunder for brevity. Sl.No Particulars Page No. From To 1 Written Submissions filed before the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre ['CIT(A)] 1 10 2 Receipt issued by Mahindra Mahindra Financial Services Limited 11 11 3 Copy of income tax return (ITR') for AY 2012-13 12 36 4 Copy of ITR for AY 2011-12 37 60 5 Extracts o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -tax vs Smt. Dimpal Yadav [379 ITR 177] 123 128 14 Decision of the Agra ITAT in the case of DCIT vs Akhilesh Kumar Yadav [26 taxmann.com 264] 129 129 139 Penalty cannot be imposed as a mandatory levy in a mechanical or automatic manner 15 Decision of the Supreme Court in the case of Union of India vs Rajasthan Spinning Weaving Mills [Civil Appeal No. 3527 of 2009] 140 140 163 16 Decision of the Punjab Haryana High Court in the case of CIT vs Sidhartha Enterprises [322 ITR 80] 164 164 166 The ld.Counsel for the assessee also submitted letter of the Reserve Bank of India (Pg 69 of P.B. Index supra) which reads as under:- भारतीय रिजर्व बैंक RESERVE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Srinivasan) Chief General Manager 6. Per contra ld. DR Dr.Samuel Pitta, JCIT submitted that as per Income Tax Act, 1961 NBFC cannot become banking company by RBI regulation. The ld.DR pleaded for the strict interpretation of the provisions of section 269T of the Act. 7. We have heard the rival submissions, perused the record, gone through the relevant provisions of the Act, paper book and case laws cited at bar. Seeing the entire conspectus of matter, we are of the considered view that issue of repayment of loan in cash to NBFC is not free from doubt specially in the light of Notification issued by the Reserve Bank of India (RBI) dated 9th March 2017 [RBI/2016-17/245 DNBR (PD),CC.No. 086/ 03.10.001/2016-17] and citations referred. In fact ..... X X X X Extracts X X X X X X X X Extracts X X X X
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