2023 (5) TMI 877 - AT - Income Tax

Levy of penalty u/s 271D - contravention of the provisions of Section 269SS accepting loans and advances beyond the prescribed limit through modes other than by way of account payee cheques - HELD THAT:- Any amount received by modes other than cheques, as loans or advances, results in violation of the provisions of Section 269SS - There is no question of genuineness or bona fides of the transactions coming into picture. Therefore, this pleading of assessee is bereft of any merit.

Our view is supported by the various decisions cited by the learned DR before us as above by the case of Deepak Sales & Properties (P) Ltd.2018 (7) TMI 1314 - ITAT MUMBAI] categorically holding that for escaping from the rigors from the Section 269SS of the Act, establishing genuineness or bona fides of the transactions is not sufficient.

Similar decision rendered by case of Listin Stephen [2019 (4) TMI 293 - KERALA HIGH COURT] and case of Vasan Healthcare (P) Ltd.[2021 (2) TMI 76 - SC ORDER] and Al Ameen Educational Trust [2021 (9) TMI 732 - SUPREME COURT]

The pleading of assessee that the cash was required to meet urgent business requirements is also negated by the findings of fact by the AO that the assessee had sufficient funds in its banks accounts on the day it took cash loans from the directors and the days on which the expenses were made were bank working days; so the plea of the assessee that the cash loans were taken to meet the shortage of funds stands negated by this finding of fact by the Assessing Officer which has remained uncontroverted before us.

Clearly, therefore, the assessee was unable to establish any reasonable cause for taking cash loans also so as to escape from the levy of penalty under Section 271D of the Act in view of Section 273B of the Act. All the case laws relied upon by the Ld. Counsel for the assessee deleting penalty levied u/s 271D of the Act finding reasonable cause adduced by the assessee for accepting cash loans. In the absence of any reasonable cause in the present case, the said case laws are of no assistance to the assessee.

In the absence of any case made out by the learned Counsel for the assessee to escape from the rigors of Section 269SS/271D of the Act, we dismiss the appeal of the assessee.