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TMI Blog2004 (3) TMI 768X X X X Extracts X X X X X X X X Extracts X X X X ..... rmation letter from the vendors, in regard to the amounts advanced by them, to the Assessing Officer on 29-03-1993: Sr no St. Date of No. Certificate Name of Vendors Amount Period of advance 1 25.12.1992 C.V. Nagaraju (nephew) ₹ 20,000 May 1990-July 1990 2. 25.12.1992 C.V. Srinivas (Nephew) ₹ 20,000 May-1990-July-1990 3. 15.12.1992 James Rodrigues ₹ 30,000 28.04.1990 to 1.07.1990 4. 12.12.1994 S. Ramanna ₹ 20,000 22.12.1989 to 20.08.1990 5. 25.12.1992 B. K Ranjana ₹ 20,000 01.04.1990 to 31.03.1991 6. 18.12.1992 C. S. V. Rao ₹ 20,000 22-12-1989 to 28-03-1990 7. 31-01-1993 A. Subbaramu ₹ 20,000 25-11-1990 to 31-12-1990 8. 18.12.1992 K. Venkatesha ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... my control and there was no sufficient time to accept cheques or by demand drafts from them when I Or we visited their places to request for money. To cite an example, all the members of my family are living at Madikeri and are all self-employed and we could no have time to visit our friends/relatives on worming days. Hence we usually planned to visit their places on Saturday night of sometimes Sunday morning and returning on the same day so as to enable us to receive money to disburse the money. Since Saturday afternoon and whole of Sunday is holiday, the provisions contained in Section 269SS of the Act could not be followed in principle on account of the reasons not attributable to either of the parties…." 4.In the meanwhile, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ave borrowed the amount otherwise than though crossed cheques and demand drafts and therefore there was no reasonable cause for the failure to fallow Section 269SS. 6. The said order is challenged by the assessee in this appeal on the ground that the following substantial question of law arises for consideration: "Whether on the facts, the Tribunal was justified in upholding the levy of penalty under Section 271D of the Act, on the ground that the appellant is an Income Tax practitioner who was aware of the provisions of the Act, when (i) is was accepted that the loan transaction were genuine; and (ii) the assessee had established that he was prevented by reasonable causes from obtaining the loans by account payee cheques/demand drafts." ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ailure referred to in the said provision if he proves that there was reasonable cause of such failure…..therefore, undue hardship is very much mitigated by the inclusion of Section 273B in the Act. If here was a genuine and bona-fide transaction and if for any reason the taxpayer could not get a loan or deposit by account-payee cheque or demand draft for some bonafide reasons, the authority vested with the power to impose penalty has got discretionary power" It follows therefore that no penalty should be imposed even if there is a violation of Section 269SS if the assessee establishes as required by Section 273B (a) That the translation relating to the loans are guanine and bonafide; and (b) that there was reasonable cause (bona ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e same for fine construction work. The confirmation certificates also made it clear that the amounts were advance by as many as nine persons during the course of more than a year, in sums varying from ₹ 50,000/- to 10,000/- (except on one or two occasions). The explanation that having regard to his preoccupation which his work he was approaching the friends and relatives only on Saturday afternoons and Sunday and there receiving the loan amount in cash has not been dis-believed. In fact, the assessing officer has accepted the transactions as genuine. The fact that the assessee was an Income Tax Practitioner has nothing to do with the violation. In the circumstances, non-consideration of the reason given by the assessee to find out whe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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