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2020 (6) TMI 507 - HC - Income TaxPenalty u/s 271D - violation of the provisions contained u/s 269SS - reasonable cause or as compelling circumstances provided under Section 273B - HELD THAT:- It should be proved that there existed reasonable and acceptable cause for not accepting the loans or deposits through crossed cheques or demand drafts. It was found that the mere proof regarding genuineness of the transaction or the intention in accepting the amounts in cash or that there was no attempt to induct black money into the business etc. cannot be considered as a reasonable cause or as compelling circumstances provided under Section 273B to avoid the penal action contemplated u/s 271D, with respect to violation of the provisions contained under Section 269SS. Analysed on the basis of the principle remaining settled as above, contention raised all along by the assessee is that it was due to ignorance of the provisions or due to lack of banking facilities in the area etc; cannot be accepted. Contention that both the parties to the transaction were having agricultural income and therefore the transaction will fall within the purview of the 2nd proviso to Section 269SS, cannot also be accepted, because the admitted case itself is that the appellant is a company doing finance business of money lending and receiving deposits. Appellant has raised a contention that the assessee will fall within the exempted category of banking company contained under the 1st proviso to Section 269SS. There is nothing to indicate that the assessee has got any registration as a banking company, as defined under the Banking Regulation Act or not even to the effect that the appellant is a 'non-banking financing company' having authorisation from the Reserve Bank of India. Therefore the said contention also cannot be accepted. No substantial question of law.
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