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2015 (7) TMI 1084 - HC - Income TaxPenalty u/s 271E - Tribunal upheld the penalty under section 271D and set aside the penalty under section 271E - Held that:- . In so far as the order setting aside the penalty under section 271E, is concerned, we do agree with the findings rendered by the Tribunal by accepting the contention of the assessee, that he was constrained to repay the loan account as per the whims and fancies of A. Kannan and the repayment of loan amount by way of cash is out of compelling reasons.Having regard to the statement of the financier, A. Kannan. The Tribunal, after having duly appreciated the difficulty faced by the borrower in the hands of the financier and their compulsion to accept the terms imposed by the money lender, accepted the explanation and such findings need not be interfered by us and the same disentitles the Revenue to get any order in their appeals One consistent stand taken by the assessee before the authorities below that the assessee was deprived of valuable opportunity to defend his case for want of copy of the statement given by the financier Kannan and the copy of the materials seized from him and without giving him an opportunity to cross-examine Kannan is acceptable. The Commissioner of Income-tax (Appeals) as well the Appellate Tribunal though allowed the party to raise additional ground regarding the urgency for receiving the amount in cash and also to produce additional documents, have not duly applied their mind to ascertain the genuineness and relevancy of the same in deciding the issue in hand. The authorities below have also omitted to consider that there is serious violation of the principles of natural justice in not allowing the assessee to have the copy of the statement of the financier Kannan and the documents seized from him and to cross-examine him. Such failure on the part of the authorities below, in our considered view, has deprived the assessee of his valuable opportunity to satisfactorily prove the reasonable cause for receiving the amount in cash and to defend his case properly and effectively. As such, we feel that it is a fit case, to give the assessee such an opportunity and for such purpose, set aside the impugned order and to remand the same for fresh disposal, after giving the copies of the relevant documents to the assessee and after giving him an opportunity to cross-examine the witness and after duly considering the additional grounds raised and additional documents produced by the assessee and the substantial questions of law are accordingly decided in favour of the assessee.
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