TMI Blog1997 (11) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... r, Company Circle XXV, New Delhi, against the petitioners as per the following allegations. Petitioner No. 1 is a company registered under the Companies Act, 1956. Petitioners Nos. 2 to 4 were the directors of petitioner No. 1 during the period relevant to the assessment year 1984-85 and they were in charge of and responsible to the company for the conduct of its business at the time when the offence is said to have been committed. During the course of the assessment proceedings for the period relevant to the assessment year 1984-85, the complainant found that the company had shown deposits in its books of account in the name of Summan Steel and Rolling Mills Pvt. Ltd. and Universal Properties Limited. Repayment of deposits amounting to R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Chief Metropolitan Magistrate holding that the repayment was towards deposits as contemplated by section 269T of the Act. It further came to the conclusion that the term "deposit" means any deposit of money which is repayable after notice and repayable after a fixed period of time. It also observed that it was too early for the trial court to jump to the conclusion that the loans repaid by the petitioner company were not deposits as contemplated by section 269T of the Income-tax Act. I have heard learned counsel for the parties. In order to appreciate the question as to whether the petitioners have violated the provisions of the Act it would be necessary and convenient to extract section 269T thereof : "269T. Mode of repayment of certai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or jointly with any other person on the date of such repayment together with the interest, if any, payable on such deposits, is twenty thousand rupees or more : Provided that where the repayment is by a branch of a banking company or co-operative bank, such repayment may also be made by crediting the amount of such deposit to the savings bank account or the current account (if any) with such branch of the person to whom such deposit has to be repaid : Provided further that nothing in this sub-section shall apply to or in relation to the repayment of any deposit before the date on which the Income-tax (Second Amendment) Act, 1981, receives the assent of the President. Explanation.---For the purposes of this section,--- (i) 'banking ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ear to me that this sub-section is not applicable as the assent of the President of India was received earlier to the repayment, but clauses (a) and (b) of sub-section (2) of section 269T would undoubtedly be applicable if the repayment in the instant case was made in relation to deposits as the repayment was made after September 19, 1981, when the President of India assented to the Amendment Act. Now the only question which remains to be determined is whether the repayment was towards "deposit" or the same was towards "loan". In order to determine this question it will be necessary to consider whether the meaning of the term "deposit" ascribed by the Explanation to section 269T includes the term "loan" in its ambit. The distinction between ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the loan is to be kept by the borrower for himself. Thus I deposit my hat in the cloak room. My hat is not to be used by the depositee, but is to be kept for me and returned to me on my demand; but I lend my money to a friend and he can do what he likes with it as long as he returns it to me either on demand or at some specified time. It may be, as observed by Sir Walter Schwabe when Chief Justice of the Madras High Court in Kishtappa Chetty v. Lakshmi Ammal, AIR 1923 Mad 578, that article 145 covers more than the depositum of Roman law, and his Lordship observed that the framers of the Indian Limitation Act 'meant to use simple and plain language', but I take this to mean that the word 'deposit' is used in the ordinary sense of the word in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld violate a penal provision of a statute, as otherwise unwittingly he may fall in the net cast by a penal provision. In case two interpretations are possible, an interpretation which takes out an assessee from the clutches of a penal provision must be preferred. The complainant in the show-cause notice dated March 2, 1987, clearly stated that the petitioners raised a loan and a payment was made in cash with reference to the same. This is what the show-cause notice states :--- "During the course of assessment proceedings for the assessment year 1984-85 in your case it is found that you have raised a loan from Summan Steel and Rolling Mills and made payment for the said loan in the previous year relevant to the assessment year 1984-85. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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