TMI Blog2007 (7) TMI 237X X X X Extracts X X X X X X X X Extracts X X X X ..... r the appellant. N. Muthukumar for the respondent. JUDGMENT The judgment of the court was delivered by P. P. S. JANARTHANA RAJA J.— This appeal is filed under section 260A of the Income-tax Act, 1961, by the Revenue, against the order of the Income-tax Appellate Tribunal, Bench "A", Madras in I. T. A. No. 1195(Mds)/94 dated June 18, 2003. On June 22, 2004, this court admitted the appeal and formulated the following substantial questions of law: "1. Whether, on the facts and under the circumstances of the case, the Appellate Tribunal was right in holding that cash payments made by the assessee pertains to refund of share application money and not repayment of deposit or loan? 2. Whether, on the facts and under the circumst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax case by the Revenue. 4. Learned senior standing counsel appearing for the Revenue submitted that the provisions are mandatory and hence there is no mens rea or evasion of tax needs to be proved before penalty is imposed. Further, it is submitted that the Tribunal has failed to note that the assessee did not have "reasonable cause" for repaying the share application money in cash and hence, levy of penalty under section 271E is automatic in cases of not complying with the provisions of section 269T. Further, it is contended that the assessee had availed of the loan and had repaid the same in cash under the guise of refund of share application money. Hence, the levying of penalty by the Assessing Officer is justified. 5. Learned c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ances of share application money or repayments of such advances have not flowed from any undisclosed income of the assessee or the concerned persons. It is also seen from the records that the assessee had not paid any interest at all on any of the advances repaid after quite some time. If the intention was to receive them as loans or deposits, then certainly the lenders would not have made the advances gratuitously. It is also a factual finding given by the authorities below that the assessee was not called upon to explain the default under section 269SS on receipt of the advances in earlier years, which would show that the assessee's case was not governed by the said provisions. Penalty under section 271E is not automatic, and a bona fide ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 269T". Section 271E, as on the relevant period, reads as follows "271E. (1) If a person repays any deposit referred to in section 269T otherwise than in accordance with the provisions of that section, he shall be liable to pay, by way of penalty, a sum equal to the amount of the deposit so repaid. (2) Any penalty imposable under sub-section (1) shall be imposed by the Deputy Commissioner." 8. From a reading of the above, it is clear that if a person repays any deposit referred to in section 269T otherwise than in accordance with the provisions of that section, he shall be subjected to levy of penalty. Section 269T deals with "mode of repayment of certain deposits". Section 269T, as on the relevant period, reads as follows "269 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erson 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." 9. The above section provides that no branch of a banking company, co operative bank and no oth ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f that the money received is only for the purpose of allotment of shares. Also, there is no material or evidence or any compelling reason produced by the Revenue to prove that the money received is a deposit or loan. The first appellate authority as well as the Tribunal have come to a correct conclusion after accepting the explanation offered by the assessee. It is a question of fact and the order of the Tribunal is not a perverse one. The concurrent finding given by both the authorities below is based on valid materials and evidence. In the case of CIT v. P. Mohanakala [2007] 291 ITR 278, the Supreme Court held that whenever there is a concurrent finding by the authorities below, no interference should be called for by the High Court. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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