TMI Blog2016 (3) TMI 1381X X X X Extracts X X X X X X X X Extracts X X X X ..... . - I.T.A. Nos. 264, 265, 266, 267, 268, 269 & 270/Mds/2015 - - - Dated:- 31-3-2016 - Shri Chandra Poojari, Accountant Member AND Shri Duvvuru RL Reddy, Judicial Member For the Appellant : Shri A.V. Sreekanth, JCIT For the Respondent : Shri S. Sridhar, Advocate ORDER PER DUVVURU RL REDDY, JUDICIAL MEMBER: All the seven appeals filed by the Revenue pertain to same assessee are directed against separate orders of the ld. Commissioner of Income Tax (Appeals) VI, Chennai, all dated 14.11.2014 relevant to the assessment years 2006-07 to 2012-13. The only effective ground raised in all the appeals relates to deletion of penalty levied under section 271E of the Income Tax Act, 1961 [ Act in short] for the assessment years 2006-07 to 2012-13 and for the assessment years 2006-07 and 2012-13, the Revenue has also raised the ground with regard to deletion of penalty levied under section 271D of the Act. 2. Brief facts of the case are that a survey under section 133A of the Act was conducted on 08.09.2011 in the case of Shri A. Kannan, Prop. Vadamalayan Finance, No. C-4, II Floor, Thiyagaraja Apartment, First Main Road, Thanthai Periyar Nagar, Pondicherry 605 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en accounted for in the regular books of accounts of the assessee or firm, in which the assessee is partner and even if so recorded no business exigency and urgency have been established to follow a prolonged and persistent system of accepting and repaying loans in cash only. Therefore, by relying on various decisions, the Assessing Officer has held that the assessee cannot claim to have established a reasonable cause contemplated under section 273B of the Act to the satisfaction of assessing authority levied penalty to the extent of the sum equal to the amount of loan repaid under section 271E of the Act of ₹.2,00,000/- for the assessment year 2006-07. Similarly, penalty under section 271D of the Act towards receipt of loan in cash to the extent of ₹.20,00,000/- was levied for the assessment year 2006-07. 4. On similar facts and circumstances, penalty under section 271E of the Act towards repayment of loan in cash to the extent of ₹.24,00,000/- was levied for the assessment years 2007-08, 2008-09, 2009-10 and ₹.6,00,000/- for the assessment year 2010-11. Penalty under section 271D of the Act towards receipt of loan in cash to the extent of ₹.50,00, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yee bank draft if,- (a) the amount of such loan or deposit or the aggregate amount of such loan and deposit; or (b) on the date of taking or accepting such loan or deposit, any loan or deposit taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), the amount or the aggregate amount remaining unpaid; or (c) the amount or the aggregate amount referred to in clause (a) together with the amount or the aggregate amount referred to in clause (b) is twenty thousand rupees or more: Provided that the provisions of this section shall not apply to any loan or deposit taken or accepted from, or any loan or deposit taken or accepted by,- (a) Government; (b) any banking company, post office savings bank or co-operative bank; (c) any corporation established by a Central, State or Provincial Act; (d) any Government company as defined in section 617 of the Companies Act, 1956 (1 of 1956); (e) such other institution, association or body or class of institutions, associations or bodies which the Central Government may, for reasons to be recorded in writing, notify in this behalf in the Official Gazette: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nstitution, association or body or class of institutions, associations or bodies which the Central Government may, for reasons to be recorded in writing, notify in this behalf in the Official Gazette. Explanation:-For the purposes of this section,- (i) 'banking company' shall have the meaning assigned to it in clause (i) of the Explanation to section 269SS ; (ii) 'co-operative bank' shall have the meaning assigned to it in Part V of the Banking Regulation Act, 1949 (10 of 1949) ; (iii) 'loan or deposit' means any loan or deposit of money which is repayable after notice or repayable after a period and, in the case of a person other than a company, includes loan or deposit of any nature. 9. The provisions of sections 269SS and 269T mandate that no amount should be received in cash in excess of the amount prescribed thereunder. The statement of the financier produced by the counsel for the Department and also relied upon by the appellant would be a case of money-lending business by the financier repeatedly indulging in violation of the provisions of sections 269SS and 269T of the Act. It is one thing to say that there was a compulsion on the par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h the provisions of the Act. In one statement the financier clearly states that he used to conduct the money-lending business in the names of third parties. The assessee on his part has been repeatedly, for every assessment year, conducted the business in the same manner by receiving and repaying the loan amount in cash. Hence, the same cannot be called as a bona fide transaction and there is a reasonable cause. As a matter of fact, the conduct of the parties is more important to exercise the discretion under section 273B of the Act. As the assessee has not passed the test of reasonable cause showing his bona fides, the provisions of section 273B do not get attracted, more so, in a case of no explanation offered in spite of giving repeated chances therefor. On the facts in issue before us, there appears to be no justification to claim the benefit of section 273B of the Act. 11. In the present case, as mentioned above, the appellant has been charged for violation of the provisions of section 269SS and section 269T of the Act on the ground that when a survey was conducted under section 133A in the business premises of Mr. A. Kannan, proprietor of Vadamalayan Finance on October 8, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee, as the case may be, for any failure referred to in the said provisions, if he proves that there was reasonable cause for the said failure. In the case on hand, as mentioned above, when the appellant was issued with the show-cause notice under sections 271D and 271E on December 16,2011, having sent a letter dated January 11, 2012, seeking adjournment, was issued with another notice dated February 1,2012. Again sending another letter dated February 16,2012, sought another adjournment for one more week on the ground that a close associate and senior citizen of his community passed away on February 16, 2012. Once again after receiving fresh notice dated February 16, 2012, and another notice dated February 24, 2012, the appellant finally sent Mr. V. Jayachander, chartered accountant, who also filed adjournment letter on July 24, 2012. When the said Mr. V. Jayachander, chartered accountant appeared on May 11, 2012, thereafter, sadly, no one appeared. That apart, the assessee had not even filed any reply nor even the particulars called for vide order-sheet entry dated May 11, 2012, and letter dated May 2, 2012. In the above background, taking into account the conduct of the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unsel for the appellant is also inapplicable to the present case since, in the said case, the Tribunal reached its conclusion by holding that a reasonable cause was shown by the assessee for the failure to comply with the provisions of section 269T of the Act at the very first instance before the assessing authority. In the present case, as mentioned above, the appellant has not submitted any explanation whatsoever. Similarly, in yet another judgment of the Division Bench of this court, in which one of us R. Sudhakar J., who was speaking for the court has held clearly that the assessee therein had shown reasonable cause for availing of loan from the agriculturists by properly placing the genuineness of the creditors who have been verified and the said transaction being found incapable of any suspicion by the authorities, hence, on that score, this court refused to interfere with the order of the Tribunal, however, in the present case, as there was no explanation offered for availing of such a huge cash loan transaction for number of years. We hold that the cited judgment cannot be made applicable to the facts of the present case. 14. For all the aforementioned reasons, we find t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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