TMI Blog2015 (12) TMI 1544X X X X Extracts X X X X X X X X Extracts X X X X ..... al & Islamia College Branches & in Asst. Year 2007-08, the violation was by Lal Mandi Branch whereas in Asst. Year 2005-06, the violation was by Lal Bazar Branch. We further find that learned CIT(A) himself in Asst. Year 2006-07 has deleted the penalty imposed by Assessing Officer under similar facts circumstances. We further find that no mens rea is involved as the violation is not intentional. Therefore, in view of the above facts and circumstances and in view of the legislature intention of introducing these penal provisions & also in view of the precedents relied upon by learned AR, we hold that penalties are not imposable in these cases. - Decided in favour of assessee - I.T.A Nos. 73, 74 & 75(Asr)/2014 - - - Dated:- 17-12-2015 - SH. A.D.JAIN, HON BLE JUDICIAL MEMBER AND SH. T.S.KAPOOR, HON BLE ACCOUNTANT MEMBER For the Appellant: Sh. R.K. Gupta (CA.) For the Respondent: Sh. R.K. Sharda (DR.) ORDER PER T.S.KAPOOR (A.M): These are three appeals filed by the assessee against the separate order of learned CIT(A), Jammu, all dated 06.12. 2013. In these appeals common issue is involved and they were heard together and therefore, for the sake of conv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rawn in their respective names. The above action is in violation of the express provision of law for which penalty is leviable u/s 27 IE of the l.T. Act. As discussed earlier no reply was filed on or uptill the fixed date i.e. 20/06/2011. However a written reply has been filed by the Ld. Counsel of the assessee on 21/06/2011 which has been placed on record. Though reply was not filed in time, yet it is being considered. In his reply, the Ld. Counsel has argued that the repayment was made to persons who were not maintaining bank accounts and were in urgent need of money. The reasons given are for medical expenses, marriage expenses or some urgency. He also argued that the Branch Manager of the bank made the repayment in cash when these persons insisted on receiving the repayment in cash. He has admitted that there is contravention of provision of sec. 269T but that was for a reasonable cause, it has also been argued that imposition of penalty is not a mandatory but only directory u/s 27 IE of the l.T. Act. Penalty order for Assessment Years 2005-06 The repayments have been made in cash for the reason that these depositors were not maintaining any type of account with t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced below. Sec.271E deals with penalties imposable for failure to comply with the provisions of sec.269T of the Act whereas sec.273B of the Act provides that no penalty is imposable for any failure referred to in the said provisions, if the assessee proves that there was a reasonable cause for said failure .In case under consideration, reasonable cause given by the appellant like medical treatment of family members etc. of the depositors having no account with any bank cannot be considered as a reasonable cause for repaying the amount in cash. There seems to be no business exigency forcing the Branch Manager of Lai Mandi Branch of the appellant bank to make payments of 4,73,499/- to 7 number of depositors in cash all exceeding ₹ 20000/-. The repayment of deposit in contravention of provisions of sec.269T cannot be made merely because a depositor does not have a bank account or expressed his/her inability to open the account.Sec.269T of the Income Tax Act, 1961 clearly provides that no banking company [defined in sec 269SS explanation (i)] shall repay loan or deposit made with it otherwise than through account payee cheque or account payee bank draft drawn in the name of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts and circumstances and in view of the judicial precedents prayed that penalties imposed may be deleted. 6. The learned DR, on the other hand, heavily relied upon the orders of authorities below and submitted that admittedly assessee had violated the provisions of section 269T and therefore, Assessing Officer had rightly imposed the penalty and learned CIT(A) had rightly confirmed the same. 7. We have heard the rival parties and have gone through the material placed on record. We find that there is no dispute that assessee had made repayments of fixed deposits in violation of provisions of section 269T and there is also no dispute that in Asst. Year 2007-08 repayments were made to such depositors who had no saving banks account as it apparent from the findings of learned CIT(A) himself. In Asst Year 2005-06, the repayments were made to seven persons in excess of ₹ 20,000/- on the basis of specific request letters from depositors who required the cash for marriage of children/ repairs of house or for non maintenance of Savings Bank Account. The learned CIT(A) has confirmed the penalty holding that there was no reasonable cause. In Asst. Year 2008-09, the CIT(A) has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e penalty had accepted the explanation of the assessee that breach of the provisions of the Act was on account of bona fide belief of the assessee and the same was not with any intention to avoid or evade the tax. The findings of the CIT(A) have been confirmed in appeal by the Tribunal. Therefore, the findings recorded by the CIT(A) and the Tribunal that the assessee had shown reasonable cause for the failure to comply with the provisions of s. 269T is a finding of fact based on appreciation of material on record. It does not give rise to any question of law, much less substantial question of law. Accordingly, the appeal is dismissed. In the present cases, the Department has not doubted the genuineness of the transactions and has imposed upheld the penalties holding that the reasons for repayment as submitted by assessee did not constitute reasonable cause. We further find that in different years the violation has been made by different branches of the Bank the violation has not been repeated. In Asst. Year 2008-09, the violation was by Bulbul Nowgam, L.D. Hospital Islamia College Branches in Asst. Year 2007-08, the violation was by Lal Mandi Branch whereas in Asst. Yea ..... 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