TMI Blog2016 (9) TMI 262X X X X Extracts X X X X X X X X Extracts X X X X ..... /2014 the assessee has challenged the order of the CIT(A) in confirming the levy of penalty of ₹ 2,35,000/- u/s.271E of the Act. ITA No.2092/PN/2014 the assessee has challenged the order of the CIT(A) in confirming the levy of penalty of ₹ 1,75,000/- u/s.271D of the Act. 3. There is a delay of 69 days in filing of the appeals for which the assessee has filed an application for condonation of delay along with an affidavit. The Ld. Counsel for the assessee while explaining the reasons for delay in filing of the appeals stated that the assessee was seriously ill and was under medical examination for entercolites and complaints of abdominal pain. Since the assessee was suffering from serious health problems the appeals were filed late. He submitted that the delay in filing of appeals is not deliberate and there was no negligence on the part of the assessee. Relying on various decisions he submitted that the delay in filing of the appeals should be condoned. 4. After hearing the Ld. Departmental Representative and after considering the contents of the affidavit as well as the arguments advanced by the Ld. Counsel for the assessee, we are of the considered opinion that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee is being assessed for the Income Tax for last several years and she is being represented by the Chartered Accountant and hence the plea of the assessee, that she was under the wrong impression that the transactions with the family members are not covered by the provisions of Sections 269SS and 269T of the Income Tax Act is not acceptable. Further, Sections 269SS and 269T of the Income Tax Act do not exclude the transactions made between the family members. It is also settled that the acceptance and payment of any amount will either be a loan or advance. It cannot be said that a debt is not a loan or advance. Thus, the plea of the assessee is not acceptable at all. The Hon'ble Bombay High Court in the case of Dhanji R. Zalte Vs. ACIT (2004) 265 ITR 204 held that the penalty u/s.271D and 271E are leviable if there is contravention of Sections 269SS and 269T. In this judgement, the case decided by the Supreme Court in Asstt. Director of Investigation Vs. Kum. A.B. Shanti (2002) 174 CTR 513 (SC) was also discussed. This judgement of the High Court has been upheld by the Supreme in (2003) 264 ITR (St.) 140 SC. In view of these facts and legal position I impose a penal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act cannot be levied. In this case, it is clear from the facts and also held by the Assessing Officer that reasonable cause for taking and repaying cash loans has not been established. The appellant has relied upon the decision of Hon'ble Bombay High Court in the case of CIT Vs. Triumph International Finance(I) Ltd.(2012) 345 ITR 270 (Bom). From the perusal of the Order it is seen that the reliance of the appellant on the said order is misplaced as that decision was given in the context of payment and adjustment through Journal entry and not on account of cash payment. Therefore facts being distinguishable, the appellant cannot derive any benefit from this decision. The appellant has also relied upon the decision of Hon'ble Madras High Court in the case of CIT Vs. M. Yeshodha, 55(1) ITCL 391. In this regard also, it is seen that the appellant has failed to substantiate that there was urgent necessity to borrow the amount. Accordingly, on the facts and circumstances of the case, penalty of ₹ 1,75,000/- levied by the Assessing Officer u/s. 271D of Income-tax Act is upheld. Thus, the ground is dismissed. 8.1 Identical observations have been given by the Ld.CIT(A) w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon'ble Bombay High Court that if the assessee has not repeated such violation in any of the subsequent years and if it is the first and the only violation of S. 269T no penalty u/s 271-E can be sustained. In view of this the penalty be deleted. 3. On the facts and circumstances of the case and in law the delay occurred in filing the appeal of 69 days be condoned. The detailed application will be filed. 4. The appellant craves/leave to add, amend or alter any of the above grounds of appeal. 10. The Ld. Counsel for the assessee strongly opposed the levy of penalty u/s.271D and 271E by the Addl.CIT as well as the order of the CIT(A) in confirming the same. He submitted that the transactions in the instant case are genuine. The assessee due to business exigency has taken the loans in cash from her husband and mother-in-law. There was no attempt to evade the tax on the part of the assessee. Referring to the decision of the Hon ble Punjab Haryana High Court in the case of CIT Vs. Sunil Kumar Goel reported in 315 ITR 163 he submitted that the Hon ble High Court in the said decision has held that family transactions between two independent assessees based on an act of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f each case. 12. So far as the decision relied on by the AO is concerned he submitted that the same is distinguishable and not applicable to the facts of the present case. 13. The Ld. Departmental Representative on the other hand heavily relied on the order of the CIT(A). He submitted that the assessee in the instant case has clearly violated the provisions of section 269SS and 269T by accepting cash loan and repaying the same also in cash. He submitted that the Ld.CIT(A) has given valid reasons while upholding the penalty levied by the Addl.CIT. He submitted that there is no reasonable cause on the part of the assessee for accepting such cash loans and repaying them also in cash. 14. Referring to the decision of Hon ble Madras High Court in the case of P. Muthukaruppan Vs. JCIT reported in 375 ITR 243 he submitted that the Hon ble High Court in the said decision has held that where assessee accepted and repaid loan exceeding ₹ 20,000/- in cash from/ to money lender repeatedly, even when transaction took place in a major city and offered no explanation regarding urgency or compulsion, levy of penalty was in consonance with law. Referring to the decision of Hon ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e belief that taking money in cash and repaying thereof in cash from the husband and mother-in-law is not in violation of provisions of section 269SS and 269T. The genuineness of the transactions have not been doubted by the revenue authorities and therefore there was a reasonable cause within the meaning of section 273B. Therefore, no penalty is leviable u/s.271D and 271E for violation of the provisions of section 269SS and 269T respectively. 17. We find some force in the above arguments advanced by the Ld. counsel for the assessee. Admittedly, the transactions are between close family members. The assessee has accepted loans in cash from her husband and mother-in-law and has repaid the same in cash. The genuineness of the transactions has not been doubted. We find the Hon ble Punjab Haryana High Court in the case of Sunil Kumar Goel (Supra) while deciding an identical issue has observed as under : 10. We have considered the submission advanced by the learned counsel for the respondent-assessee. We are satisfied that section 273B of the Act envisages a non-obstante clause as against sections 271D and 271E of the Act (which have been sought to be invoked for penalisin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anging from ₹ 10,000 to 30,000 were taken by way of cash by the respondent-assessee as loans in conscious and deliberate disregard of obligation envisaged under section 269SS of the Act. And the aforesaid loans were then returned by way of cash, again, in conscious disregard of the obligation envisaged under section 269T of the Act. It was also submitted by the learned counsel for the appellant-Revenue, that it had not been argued at the hands of the respondent-assessee, that action of the respondent-assessee was not deliberate, or that, the same was under a bona fide belief that he could not accept or return a loan(s) in excess of ₹ 20,000 by way of cash. It is, therefore, the submission of the learned counsel for the appellant-Revenue, that the onus to establish bona fides at the hands of the respondent-assessee, squarely rests on the shoulder of the respondent- assessee. In addition to the above, it is submitted that a breach of the provisions of the Act, cannot be justified on the alleged bona fide belief, which cannot be illustrated through cogent evidence. It is, therefore, the submission of the learned counsel for the appellant-Revenue, that in the facts and circ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent- assessee were with the sister concern and that these transactions were between the family and due to business exigency. A family transaction, between two independent assessees, based on an act of casualness, specially in a case where the disclosure thereof is contained in the compilation of accounts and which has no tax effect, in our view establishes reasonable cause under section 273B of the Act. Since the respondent-assessee had satisfactorily established reasonable cause under section 273B of the Act he must be deemed to have established sufficient cause for not invoking the penal provisions (sections 271D and 271E of the Act) against him. 15. For the reasons recorded hereinabove, we find no merit in either of the aforesaid two appeals, i.e., I. T. A. Nos. 777 and 778 of 2008, and accordingly, the said appeals are hereby dismissed. 18. We find the Hon ble Punjab Haryana High Court in the case of Saini Medical Store (Supra) while dealing with an identical issue has observed as under : 10. Section 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 reason ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of section 271E of the Act. The impugned order of penalty is cancelled. 13. The findings of the Commissioner of Income-tax (Appeals) have been confirmed in appeal by the Tribunal. 14. Therefore, the findings recorded by the Commissioner of Income-tax (Appeals) and the Tribunal that the assessee had shown reasonable cause for the failure to comply with the provisions of section 269T of the Act 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. 15. Accordingly, the appeal is dismissed. 19. So far as the decisions relied on by the Ld. Departmental Representative are concerned they are distinguishable and not applicable to the facts of the present case. In the case of P. Muthukaruppan (Supra) the Hon ble High Court has upheld the penalty levied u/s.271D and 271E on the ground that assessee was taking and giving back amounts exceeding ₹ 20,000/- to the money lender through cash repeatedly though entire transactions took place in major city and the assessee had neither explained as to the urgency, compulsion or any other important circumstances fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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