TMI Blog2015 (7) TMI 1084X X X X Extracts X X X X X X X X Extracts X X X X ..... nnan and the copy of the materials seized from him and without giving him an opportunity to cross-examine Kannan is acceptable. The Commissioner of Income-tax (Appeals) as well the Appellate Tribunal though allowed the party to raise additional ground regarding the urgency for receiving the amount in cash and also to produce additional documents, have not duly applied their mind to ascertain the genuineness and relevancy of the same in deciding the issue in hand. The authorities below have also omitted to consider that there is serious violation of the principles of natural justice in not allowing the assessee to have the copy of the statement of the financier Kannan and the documents seized from him and to cross-examine him. Such failure on the part of the authorities below, in our considered view, has deprived the assessee of his valuable opportunity to satisfactorily prove the reasonable cause for receiving the amount in cash and to defend his case properly and effectively. As such, we feel that it is a fit case, to give the assessee such an opportunity and for such purpose, set aside the impugned order and to remand the same for fresh disposal, after giving the copies of the r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was not given any opportunity of cross-examining P. Kannan and the same amounts to violation of principles of natural justice. 4. The Commissioner of Income-tax (Appeals), vide his order dated December 30, 2013, decided the grounds raised by the appellant and dismissed the appeal filed by the assessee, which reads as follows : 7. Decision and grounds of determination.-All the grounds of the appeal raised are against the action of the Assessing Officer in levying penalty of ₹ 20,00,000 under section 271D of the Income-tax Act. I have considered the assessee's submissions as well as the findings given in the order of penalty. The contention of the appellant that he had received ₹ 20 lakhs in its burden of proving with an evidence regarding its plea of reasonable cause to obtain the loan in cash. The insistence of the lender to advance the loan in cash cannot be treated as reasonable cause for excusing the appellant from levy of penalty under section 271D of the Income-tax Act. Therefore, under the facts and circumstances of the case, I am fully in agreement with the view of the Assessing Officer that penalty of ₹ 20,00,000 is leviable and uphold the acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the insistence of financier to repay the loan in cash is a compelling circumstances and is a reasonable cause for transacting the loan transaction in cash and thereby deleting the levy of penalty under section 271E ? T. C. A. No. 325 of 2015 1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in confirming the penalty under section 271D which was clearly imposed in violation of the principles of natural justice based on the statements recorded behind the back of the appellant ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was right in confirming the penalty under section 271D after recording that the financier insisted on granting loans and receiving back only in cash ? 7. Heard the rival submissions made on both sides and perused the records. 8. Admittedly, the assessee received ₹ 20 lakhs from and repaid the same by way of cash to one Kannan, who was carrying on unlicensed financial activities. The assessee filed his return for the relevant assessment years for the cash loan transaction and repayment after receipt of notice under section 271D for the penalty proceedings. 9. As th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the explanation and such findings need not be interfered by us and the same disentitles the Revenue to get any order in their appeals in T. C. (A.) Nos. 291 and 292 of 2015. 11. In so far as the other appeal T. C. (A.) No. 325 of 2015 filed by the assessee is concerned, one consistent stand taken by the assessee before the authorities below is that the assessee was deprived of valuable opportunity to defend his case for want of copy of the statement given by the financier Kannan and the copy of the materials seized from him and without giving him an opportunity to cross-examine Kannan. The impugned order of the authorities below is based on two reasons (1) the assessee has not come forward with consistent case, and (2) no reasonable cause is shown for receiving the loan in cash. As rightly argued by the learned counsel for the appellant-assessee, the authorities below before arriving at such conclusion ought to have considered the explanation offered by the assessee and the documents based on which the same was made. The Commissioner of Income-tax (Appeals) and the Tribunal have also failed to consider the documents such as, bank statement and the copy of the notice received fro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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