TMI Blog2010 (11) TMI 702X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the default, if any, was unintentional and therefore, it constitutes reasonable cause within the meaning of section 273B of the Income-tax Act - Provisions would show that section 269SS shall not apply to any loan or deposit taken or accepted from, or any loan or deposit taken or accepted by any banking company, post office savings bank or co-operative bank - In this case, the transactions in question were through bank and were deposited by some of the directors/promoters of the assessee-company - Decided in favor of assessee. - IT APPEAL NO. 77 OF 2000 - - - Dated:- 25-11-2010 - I.M. QUDDUSI AND N.K. AGRAWAL, JJ. Rajeev Shrivastava for the Appellant. M.C. Jain for the Respondent. JUDGMENT I.M. Quddusi, J. ‑ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for imposing penalty under section 271D of the Income- tax Act. During the course of penalty proceedings, the Deputy Commissioner of Income-tax, Range II, Raipur observed that all the persons from whom the assessee-company accepted the loans/deposits are directors/promoters of the said company and they are closely related to each other. The Deputy Commissioner of Income-tax passed an order under section 271D on September 30, 1996 (Annexure A) imposing penalty of Rs. 13,15,540 on the assessee-company. (b) Being aggrieved, the assessee preferred an appeal before the Commissioner of Income-tax (Appeals) and the appellate authority partly allowed the appeal with respect to part amount said to be received by the company through its director ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as recorded as to whether or not the receipt of the amount of the company from its directors/promoters was in accordance with the requirement of section 271D of the Act. 4. It is an admitted fact that the money was deposited by the directors in the bank account of the assessee, therefore, the transaction was genuine. The Tribunal was of the opinion that the default, if any, was unintentional and therefore, it constitutes reasonable cause within the meaning of section 273B of the Income-tax Act. 5. Section 269SS of the Income-tax Act provides for mode of taking or accepting certain loans and deposits. It reads as under : "No person shall after the 30th day of June, 1984, take or accept from any other person (hereafter in this section r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... person by whom the loan or deposit is taken or accepted are both having agricultural income and neither of them has any income chargeable to tax under this Act. Explanation.-For the purposes of this section,- (i) 'banking company' means a company to which the Banking Regulation Act, 1949 (10 of 1949), applies and includes any bank or banking institution referred to in section 51 of that Act ; (ii) 'co-operative bank' shall have the meaning assigned to it in Part V of the Banking Regulation Act, 1949 (10 of 1949) ; (iii) 'loan or deposit' means loan or deposit of money." 6. A perusal of the above quoted provisions would show that section 269SS shall not apply to any loan or deposit taken or accepted from, or any loan or depos ..... X X X X Extracts X X X X X X X X Extracts X X X X
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