TMI Blog2019 (5) TMI 1783X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year is 2005- 2006. 2. The solitary issue that is raised is whether the CIT(A) is justified in confirming the penalty imposed u/s 271D of the I.T.Act. 3. Brief facts of the case are as follows: The assessee was carrying out finance business by accepting deposits and advancing loans in cash above the permissible limit, both from members as well as from nonITA members. Since the assessee had accepted cash deposits and advanced loans in cash above the permissible limit, it had violated the provisions of section 269SS of the I.T.Act. Consequently, notice dated 24.12.2007 was issued by the Assessing Officer asking the assessee to show cause why penalty u/s 271D of the I.T.Act should not be levied. After considering the explanation given by the assessee, penalty u/s 271D of the I.T.Act was imposed. On further appeal by the assessee, the penalty imposed u/s 271D of the I.T.Act was confirmed by the CIT(A) and ITAT. 4. Aggrieved, the assessee filed appeal u/s 260A of the I.T.Act before the Hon ble High Court. The Hon ble High Court restored the matter to the Assessing Officer to consider if there is a reasonable cause on the part of the assessee for having accepted deposits a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the explanation of the appellant-assessee. What was the reasonable cause for receiving such amounts in cash in violation of the provisions of Section 269SS? Apparently several transactions are beyond and above ₹ 20,000/- So far as the present controversy is concerned, as indicated by learned standing counsel for Revenue, the case which was relied upon by the Tribunal, ie. K.V.George's case, came up for consideration before this Court in I.T.A No.279/2013, wherein scope of Sections 269SS and 2710 was discussed with reference to various judgments of other High Courts and also Supreme Court. While referring to scope of Section 26955 read with Section 2710, it was clearly held that the only consideration would be what was the reasonable cause for receiving such a huge amount by way of cash or what was the reason for not receiving the loan or deposit by way of account payee cheque or demand draft a matter to be explained by the assessee. In other words, the burden is on the assessee to establish what was the reasonable cause for not receiving the loan or deposit by way of account payee cheque or a demand draft. It is not a single transaction but several transactions which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee has filed the present appeal before the Tribunal. The learned Counsel for the assessee strongly relied on the judgment of the Hon ble High Court in the case of CIT v. Shri P.K.Shamsudheen reported in 2011(2) TMI 1188. It was contended that the transaction carried on by the assessee in finance and chitty business were found to be bonafide and genuine and as such the principle of law laid down by the Hon ble jurisdictional High Court in the case of CIT v. Shri P.K.Shamsudheen (supra) is squarely applicable to the facts of the instant case. It was submitted that in the above judgment of the Hon ble jurisdictional High Court, the assessee had furnished the source of loan and the same was accepted by the Department itself as a reasonable cause and as such no penalty can be levied u/s 271D of the I.T.Act. It was submitted that in the instant case also, the source has been proved and the violation is only technical. It was contended that there was no finding by the Department for any evasion of tax and therefore penalty u/s 271D of the I.T.Act should be deleted. 7. The learned Departmental Representative strongly supported the order of the Income-tax authorities. 8. We have ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case, came up for consideration before this court in I. T. A. No. 279 of 2013-since reported as K. V. George v. CIT [2014] 2 ITR-OL 445 (Ker), wherein the scope of sections 269SS and 271D was discussed with reference to various judgments of other High Courts and also the Supreme Court. While referring to the scope of section 269SS read with section 271D, it was clearly held that the only consideration would be what was the reasonable cause for receiving such a huge amount by way of cash or what was the reason for not receiving the loan or deposit by way of account payee cheque or demand draft a matter to be explained by the assessee. In other words, the burden is on the assessee to establish what was the reasonable cause for not receiving the loan or deposit by way of account payee cheque or a demand draft. It is not a single transaction but several transactions which have to be explained by the appellant-assessee. Though there is no specific consistent stand as stated above on behalf of the appellantassessee, since the matter is remitted back to the Assessing Officer for fresh consideration, so far as the factual situation whether all transactions were ₹ 20,000 and above, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 273B should be a reasonable cause as to why or what was the reason which compelled the assessee to accept the loans or deposits in cash. In other words, it should be proved that there existed reasonable and acceptable cause for not accepting the loans or deposits through crossed cheques or demand drafts. When analysed based on the dictum as mentioned above, none of the facts contended or proved by the appellant will constitute a valid explanation or reasonable cause coming within the purview of Section 273B. The mere proof that the loans were repaid through cheques drawn in the name of the lender or that there was no attempt to induct black money into the business, itself cannot be considered as a reasonable cause or as a compelling circumstance under which the mandate of Section 269SS can be violated. It cannot be termed as a reasonable cause contemplated under Section 273B to condone the violation. Hence, we are of the opinion that, the appellant has not succeeded in bringing the case within the ambit of Section 273B, warranting exoneration from imposition of penalty under Section 271D. 8.4 In the instant case, the assessee was unable to prove that there was the compellin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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