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2013 (6) TMI 309 - HC - Income TaxPenalty u/s 271D - contravention of section 269SS - leniency provided in the 2nd proviso to Section 269SS - agriculturists - held that:- A perusal to second proviso to Section 269SS of the Act shows that where the person from whom the loan or deposit is taken or accepted and the person by whom the loan or deposit is taken or accepted are both having agricultural income and neither of them has any income chargeable under the Act, then the provisions of Section 269SS of the Act are not applicable. As a corollary it would follow that where Section 269SS of the Act is not applicable, the penalty under Section 271D of the Act could not be levied. The loans which were considered by the lower authorities, in the light of provisions of section 269SS read with section 271D of the Act, were prior to the date of becoming a partner of the assessee-firm. - Both the lender and borrower are agriculturists and did not have any income chargeable to tax - no penalty - decided in favor of assessee.
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