TMI Blog2022 (6) TMI 1237X X X X Extracts X X X X X X X X Extracts X X X X ..... alty, as if the provision of section 271D is mandatory, without considering the reasonable cause explained by the assessee both during the penalty proceedings. We find that the explanation given by the assessee cannot be disregarded, more so, when it was a onetime affair to meet business exigency and urgent financial necessity. Further, the impugned transaction was from his individual capacity to his HUF capacity. A reasonable and justifiable explanation has been rendered by the assessee for the impugned transaction, and therefore, imposition of penalty under section 271D of the Act was not warranted. See TRIUMPH INTERNATIONAL FINANCE (I) LTD. [ 2012 (6) TMI 358 - BOMBAY HIGH COURT] Thus we delete impugned penalty imposed under section 271D of the Act, and allow the ground of appeal of the assessee. - ITA No. : 1024 And 1025/Ahd/2019 And 1026 And 1027/Ahd/2019 - - - Dated:- 24-6-2022 - Smt. Annapurna Gupta, Accountant Member And T.R. Senthil Kumar, Judicial Member For the Assessee : Ms.Urvashi Shodhan, Advocate For the Revenue : Smt. Leena Lal, Sr.DR ORDER PER T.R. SENTHIL KUMAR, JUDICIAL MEMBER These four appeals are by the above two assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or receiving loan in cash. The ACIT issued a show cause notice for violation of provisions of section 269SS to the assessee. In response to that the assessee replied that a cash loan of Rs.10 lakhs was received by the assessee from his HUF on 14.4.2011 in compelling circumstances in order to honour the posted cheques issued by him in his individual capacity. Due to shortage of time, he could not transfer Rs.10 lakhs from his bank account to settle posted cheque issued to various third parties and also to avoid rigorous criminal proceedings under the Negotiable Instrument Act. It was a onetime affair made by the assessee cash transaction exceeding Rs.20,000/-. Furthermore, the assessee in his HUF capacity is having a PAN AACHT 1050 M for more than ten years, and is regularly filing his return of income. The said cash transaction was duly recorded in the books of accounts maintained regularly by the HUF also. To prove the genuineness of the transaction, the assessee has filed confirmation letter, copy of Income-Tax Returns and contra account of the client. In fact the AO has accepted this cash transaction as genuine and no addition has been made under section 68 of the Act in the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - Assessment year 2002-03 - Where assessee's explanation for receiving Rs.5 lakhs in cash was that funds were urgently required for honouring cheques issued by one of its directors, there being a reasonable cause for accepting cash, penalty was not leviable on assessee. 5. The above explanation offered by the assessee was not accepted and the Addl.CIT levied penalty of Rs.10.00 lakhs for the Asst.Year 2012-13 for contravention of section 269SS of the Act. Similarly for the Asst.Year 2014-15 the assessee has taken cash loan of Rs.5,31,000/- on 5.7.2013 which was required to close RBS bank account (formerly ABN Amro Bank). There also the ld.AO imposed penalty of Rs.5,31,000/- u/s.271D of the Act. 6. Against the order of the AO, the assessee preferred appeals before the ld.CIT(A). Before the ld.CIT(A), the assessee has reiterated his submissions as made before the AO. He further submitted that it was out of business exigency and extreme need of money, the assessee has taken cash loan from HUF, due to insufficient fund in his individual bank accounts, some cheques already issued to third parties could not be honoured, and therefore, in order to escape from the criminal proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on Mfg. Co. Ltd. Vs. CIT, 38 taxmann.com 61 (P H), (ii) CIT Vs. Chandra Cement Ltd., 74 taxmann.com 75 (Raj). 9. We have given our thoughtful consideration to the submissions made by the both the parties and also perused the impugned orders of the Revenue authorities. We find that the ld.AO has levied the penalty under section 271D read with section 269SS of the Act on the ground that the assessee has accepted cash loans and the reasons for accepting loan in cash were also not reasonable and sufficient to drop the proceedings. The intention of this provision is to bring down non-genuineness transactions. Section 271D stipulates that if a person takes or accepts any loan or deposit or specified sum in contravention of the provisions of section 269SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposits or specified sum so taken or accepted. Provisions of section 269SS for imposition of penalty under section 271D are applicable only in case of loans and deposits received by the assessee in cash exceeding limits prescribed therein. But such imposition of the penalty shall be subject to section 273B of the Act, which stipulates that no pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 273B for non-imposition of penalty under Section 271E would have to be construed liberally depending upon the facts of each case. 11. However, the case law relied upon by the ld.DR are clearly distinguishable on facts viz. in the case of Auto Piston Mfg. Co. P.Ltd. (supra), in which case, no business urgency was established by the assessee, and therefore, the Hon ble Court confirmed levy of penalty. In the case of CIT Vs. Chandra Cement Ltd. (supra) business exigency in respect of cash loan was not being established, and therefore, levy of penalty was confirmed by the Hon ble Court. 12. Thus, we are not inclined to support the view taken by the Revenue authorities. We delete impugned penalty imposed under section 271D of the Act, and allow the ground of appeal of the assessee. 13. Similarly, for the reasons stated hereinabove, we also allow identical ground raised by the same assessee in other appeal as well in ITA No.1025/Ahd/2019 for the Asst.Year 2014-15. 14. In ITA No.1026/Ahd/2019 and 1027/Ahd/2019 are the cases of Son of Shri Mohanlal Savjibhai Tilva where cash loan of Rs.3 lakh each has been availed from his wife on 14.4.2012 and 21.7.2012, and a sum o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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