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2018 (2) TMI 1467 - HC - Income TaxPenalty u/s 271D - reasonable cause for violation of Section 269SS - Tribunal partly allowed the Appeal by restoring the issue of amounts received in cash from agriculturists to the Assessing Officer to verify whether the agriculturists were not having banking facilities so as to delete the penalty under Section 271 D - Held that:- The law provides that the breach of Section 269 SS invites penalty under Section 271 D. The aforesaid breach has no relation to addition and / or deletion of income. The mere fact that a party accepts loans in cash (which are otherwise explainable) would not absolve a party from penalty under Section 271 D of the Act in the absence of reasonable cause. The fact that the Applicant's Appeal in quantum proceedings before CIT(A) deleted addition under Section 68 would have no bearing in respect of penalty imposed under Section 271D of the Act, for breach of Section 269SS of the Act. Even if, the Assessee has explained the identity, the source and genuineness of receipt in cash for the purpose of Section 68 of the Act, would not by itself permit / allow a party to obtain loans in cash in breach of Section 269 SS of the Act. So far as the next submission that reasonable cause made out by the Applicant, was that the Karta of the HUF being educated only upto 4th standard and was ignorant of the provisions of Section 269 SS of the Act. The Tribunal has dealt with the issue of reasonable cause and wherever it found that the reasonable cause has been made out, it restored the issue to the Assessing Officer for the purposes of verification of the facts stated by the Applicant in support thereof. In any case, the education of the Karta of the HUF is upto 4th standard, cannot by itself lead to presumption that he is ignorant of law. This is more particularly when the Karta is dealing with the large amounts of cash. Lack of formal education cannot by itself be the conclusive of ignorance of the law, particularly in respect of men of business. This of course, is without prejudice to the legal maxim that ignorance of law is no excuse. As under Section 260 A (7) the provisions of Code of Civil Procedure are made applicable to the appeals filed under the Act. Therefore, this would necessarily require application of O.41 R.1 and R.5 of the Code of Civil Procedure. The determination of the tax payable by the Assessee is in the nature of money decree and the same should be paid over to the successful party. In case, the applicant finally succeed in the appeal it would get the amounts paid in excess along with interest. However, there is no reason in the present facts to deny the successful party from the fruits of the decision of the Tribunal.
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