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TMI Blog2010 (11) TMI 536X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer in the course of proceedings under section 143(3) of the Income-tax Act, 1961 found that the assessee had received cash loan exceeding Rs. 20,000 from 7 persons totalling Rs. 7,50,000 in contravention of the provisions of section 269SS of the Act. In the course of penalty proceedings, the authorised representative of the assessee submitted that a sum of Rs. 50,000 taken from Sri Shyamal Sarkar was a brought forward balance. On examination of case records, the Assessing Officer accepted this claim of the assessee. But in respect of remaining amount of Rs. 7,00,000, the Assessing Officer after considering the written submission of the assessee observed that the argument of the assessee was not tenable. The assessee had taken ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urity personnel, which is not justified as there was no business exigency, but the payment of salary is a routine payment, which is paid every month for which the assessee needs to plan accordingly. Since all the transactions were done in cash by violating the provisions of section 269SS of the Act, the action of the Assessing Officer in imposing penalty was fully justified. He lastly prayed before the Bench to set aside the order of the learned Commissioner of Income-tax (Appeals) and restore that of the Assessing Officer. On the other hand, learned counsel for the assessee while reiterating his same submissions as submitted before the lower authorities relied on the order of the learned Commissioner of Income-tax (Appeals). He fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) Karnataka Ginning and Pressing Factory v. Joint CIT [2001] 77 ITD 478 (Mum), (j) JITU Builders Pvt. Ltd. v. Addl. CIT [2010] 124 ITD 134 (Ahd), (k) Joint CIT v. Luchman Das Surajmull in I. T. A. No. 848/Kol/2006 dated December 29, 2006, and (l) Tarai Transport Corporation v. Joint CIT in I. T. A. No. 325/Kol/2007 dated April 20, 2007. He lastly submitted that the levy of penalty under section 271D is not justified in this case. Therefore, the learned Commissioner of Income-tax (Appeals) has rightly deleted the same and his action may be upheld. We have heard the rival submissions, carefully perused the material available on record and the case law cited by learned counsel for the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 36 times during year-Considering assessee's act to be in violation of section 269SS, Assessing Officer imposed penalty upon assessee under section 271D-Tribunal found that there was business exigency forcing assessee to take cash loans for purpose of honouring its cheque commitments ; creditors were genuine persons and transactions were satisfactorily explained by assessee ; and there was no revenue loss to State exchequer-Tribunal accordingly, set aside penalty-Whether Tribunal was justified-Held, yes." The hon'ble Jharkhand High Court in the case of OMEC Engineers v. CIT reported in [2007] 294 ITR 599 ; [2008] 169 Taxman 158 has held as under:- "Section 271D of the Income-tax Act, 1961-Penalty-For failure to comply with s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 271D-Commissioner (Appeals) and Tribunal came to a finding that transactions were genuine and there was reasonable cause for accepting loan in cash and, therefore, no penalty was exigible-Whether question as to whether a particular transaction is genuine or otherwise is a question of fact, and if it had been found by Tribunal that assessee had shown a reasonable cause for accepting money in cash, said finding of fact could not be interfered with-Held, yes." The hon'ble Gujarat High Court in the case of CIT v. Bombay Conductors and Electricals Ltd. reported in [2008] 301 ITR 328 ; 173 Taxman 434 has held as under:- "Section 271D of the Income-tax Act, 1961-Penalty-For failure to comply with section 269SS-Assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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