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TMI Blog2022 (6) TMI 1237X X X X Extracts X X X X X X X X Extracts X X X X ..... hanlal Savjibhai Tilva 2012-13 Rs.10,00,000/- -do- 2014-15 Rs. 5,31,000/- Shri Vishal Mohanlal Tilva 2013-14 Rs.7,50,000/- -do- 2014-15 Rs.1,00,000/- 3. A perusal of the orders of the Revenue authorities would reveal that facts in all these cases are similar and identically worded except change in the figures of quantum. Therefore, for the convenience of adjudication, we take facts from ITA No.1024/Ahd/2019 in the case of Mohanlal Savjibhai Tilva for the Asst.Year 2012-13. 4. Brief facts relevant for adjudication of the issue is that the assessee is an individual and having income from business and profession which included interest and remuneration from partnership firm, besides income from other sources. The assessee has filed its original return of income under section 139 of the Act for the Asst.Year 2012-13 on 30.1.2013 and declared total income at Rs.2,15,690/-. Subsequent to search operation under section 132 of the Act and in response to notice under section 153A, the assessee filed return on 9.7.2016 declaring the same income as declared in the regular return. In this return the assessee has not declared any undisclosed income, however, the returned income was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 04 (Guj) Section 271D of the Income-tax Act, 1961 - Penalty - For failure to comply with section 269SS - Where assessee-AOP borrowed cash loan of Rs. 40 lakhs from its promoter for acquisition of land, in view of fact that genuineness of transaction had not been disputed by lower authorities, so also importance and urgency of raising cash loan, Tribunal was right in deleting penalty under section 271D [In favour of assessee] iii) CIT vs. Shreenathji Corporation 56 taxmann.com 439 (Guj) Section 269SS, read with sections 273B and 27ID, of the Income-tax Act, 1961 -Deposits - Mode of taking/accepting (Business need)- Assessee carries on business of construction of building and in course of such business large amount of labour charges and payments for raw material purchased from unorganized trading sectors and bricks etc. are required to be made after banking hours - If their demand for cash payment was not met they would cancel contract work and refused to complete work and would also prevent other contractors from undertaking work till their dues were settled - Whether since loan/deposits was taken in excess of Rs. 20,000 to meet urgent and immediate requirements of business, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, the ld.AO accepted the impugned transaction and no addition has been made thereon. The cash was to be accepted due to compelling situations, and to honour various cheques already issued to third parties, so that for want of insufficiency of the funds, the post dated cheques issued to the parties could not be bounced back and unnecessary litigations comprising therefrom including invocation of the action under the Negotiable Instrument Act could be avoided. It is further submitted that this was only an isolated case and one time affair during he entire financial year, and there is no reasons for the Revenue to impose penalty under section 271D of the Act. The reasons narrated by the assessee are sufficient enough to drop the invocation of proceedings under section 271D read with section 269SS of the Act. In support of her arguments, the ld.counsel for the assessee relied upon the following judgments: i) CIT Vs. Sunil Kumar Goel, 183 taxman 53 (P&H) ii) CIT Vs. Saini Medical Store, 277 IR 420 (P&H) iii) CIT Vs. Parma Nand, 266 ITR 255 (Del) iv) Hemendra Chandulal Shah Vs. aCIT, ITA No.1129/Ahd/2010 order dated 6/9/2010 (ITAT-Ahd); v) Smt.Meera Devi Kumawat Vs. JCIT, ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 269SS of the Act. Thus, the Revenue authorities imposed penalty, 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. For this, we are guided by decision of Hon'ble Bombay High Court in the case of CIT Vs. Triumph International Finance (I) Ltd., 22 taxmann.com 138 (Bom), wherein Hon'ble High Court held as follows: "23. The expression 'reasonable cause' used in Section 273B is not defined under the Act. Unlike the expression 'sufficient cause' used in Section 249(3), 253(5) and 260A(2A) of the Act, the legislature has used the expression 'reasonable cause' in Section 273B of the Act. A cause which is reasona ..... X X X X Extracts X X X X X X X X Extracts X X X X
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