TMI Blog2004 (2) TMI 308X X X X Extracts X X X X X X X X Extracts X X X X ..... course of assessment proceedings under s. 143(3) of the IT Act, 1961 for the asst. yr. 1993-94, the AO noticed that the assessee had accepted loans and deposits from M/s Maheshwari Nirman Udyog, Nokha exceeding Rs. 20,000 in cash on various dates during the financial year relevant to assessment year under consideration and since the assessee had taken/accepted loans/deposits from the aforesaid concerns in contravention of the provisions of s. 269SS, the ITO referred the case to the Dy. CIT, Bikaner Range, Bikaner. The Dy. CIT issued show-cause notice under s. 274 to the assessee which was complied with. The Dy. CIT observed that the assessee was a contractor and received total payments from Government Departments for the different works ex ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad not paid any interest or received any interest in that account. It was further stated that the legislative intention of s. 269SS, as laid out in the Parliament by the Finance Minister while introducing the Bill was to curb the tendency of taxpayer to prove the huge cash found and seized during the course of search by making deposits in the names of fictitious persons and thereby to prove the accumulation of cash as genuine. It was submitted that the legislature never intended to initiate and levy penalty in cases where transactions were bona fide and genuine, like that of the assessee. Reliance was placed on the decision of Ahmedabad Bench of the Tribunal in the case of Vir Sales Corporation vs. CIT (1994) 50 TTJ (Ahd) 130. The Dy. CIT d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n at the work site and the money was repaid later on. According to him, it was only a technical breach of law and for a mere technical breach, no penalty was exigible. He therefore, deleted the penalties. 5. Now the Department is in appeal. The learned Departmental Representative strongly supported the order of the Dy. CIT and vehemently argued that both the assessee as well as the sister concerns were having bank account and the transactions in question were in cash. Therefore, the assessee violated the provisions of ss. 269SS and 269T of the IT Act, 1961. As such the penalties were rightly levied. He further stated that the learned CIT(A) was not justified in deleting the penalties. 6. In his rival submissions, the learned counsel for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... man Udyog, Nokha (sister concern of the assessee) from whom the assessee received cash and repaid the same and the learned CIT(A) deleted the penalty vide order dt. 23rd Sept., 1996, i.e., the same date, which is the date of the impugned order and the Department against the order of the learned CIT(A) came in appeal before this Bench of the Tribunal and the Tribunal vide order dt. 27th March, 2002 confirmed the order of the learned CIT(A) by dismissing the appeal of the Department in appeal No. ITA 2145/Jp/1996. In that view of the matter, it was submitted that the issue becomes a settled issue and was covered by the earlier order of the Tribunal dt. 27th March, 2002. Reliance was also placed on the following case laws: 1. Chandra Cement ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in the manner prescribed by the statute." In the instant case, the Department also has not doubted the transactions. In other words, the transactions have been considered as genuine because both the parties, i.e., assessee as well as M/s Maheshwari Nirman Udyog, Nokha are assessed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ture of deposits or loans with certain conditions attached to them, either as regards the period of such deposits or loans or with regard to their repayments. From the copies of the accounts furnished all that could be gathered was that funds had been transferred from and to the sister concern as and when required and since the managing partner was common to all the sister concern, the decision to transfer the funds from one concern to another concern or to repay the funds could be said to have been largely influenced by the same individual. In other words, the decision to give and the decision to take vested with either the same group of people or with the same individual. In such circumstances of the case, the transaction inter-second bet ..... X X X X Extracts X X X X X X X X Extracts X X X X
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