TaxTMI 
TaxTMI 
2002 (4) TMI 233
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....ing the learned counsel for the assessee submitted that all the grounds relate to only one issue i.e., confirmation of imposition of penalty amounting to Rs. 48,500 under s. 271D of the Act. The brief facts of the case are during assessment proceedings, AO noticed that assessee has taken certain sums in cash and repayments were made in cash which were in violation of s. 269SS and 269T, therefore, penalty proceedings under ss. 271D and 271E were initiated. During penalty proceedings it was submitted that assessee was located in a small town and was not having any bank account. It was also submitted that assessee was not conversant with the amendments made in income-tax and that is why this default was committed. It was further submitted that....
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.... thus the aggregate became Rs. 25,000 and violation, if any, of s. 269SS was made to the extent of Rs. 5,000 only. Later on a further sum of Rs. 10,000 was taken from this party thus total violation is only to the extent of Rs. 15,000 only. In this regard, he referred to s. 269SS and pointed out that limit of Rs. 20,000 or more has been mentioned after items (a), (b) & (c) which means that violation would start only after the sum exceeds Rs. 20,000 because item (c) consider both the items (a) and (b) i.e. amount of loan or deposit taken and amount remaining unpaid on that date. He also relied on Vir Sales Corpn. vs. Asstt. CIT (1994) 50 TTJ 130 (Ahd) and Dr. Deepak Muchala vs. ITO (1997) 58 TTJ 524 (Mumbai). 5. On the other hand, learned....
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....an or deposit any loan or deposit taken or accepted earlier by such person from the depositor is remaining unpaid the amount or an aggregate amount remaining unpaid has been mentioned which means aggregate of amount accepted as well as amount remaining unpaid on that date has to be aggregated and then considered for the purpose of violation of s. 269SS. He contended that reliance by learned authorised representative on Veer Sales Corpn. vs. Asstt. CIT was not correct because in that case first of all it was pointed out that penalties could not be imposed for transactions entered before 1st April, 1989, because at that point of time provisions of ss. 271D and 271E were not on statute book. He submitted that earlier only prosecution was presc....
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....ply put a restriction that loans and deposits cannot be accepted in cash beyond a particular limit or repaid in cash beyond a particular limit. It is a well settled principle that ignorance of law is not an excuse. We also find that assessee does not seem to be that ignorant because he has taken advantage of certain provisions as found by AO by giving cross-gifts to the minor children of the partners. From the penalty order, it is seen that assessee has been represented by two CAs and one advocate which clearly shows that assessee was using help of tax experts and can be presumed to be aware of legal provisions. It is also well settled legal position that mens rea is not required for imposing penalty for default in complying with the statut....
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....in view, we are of the considered opinion that in case of Shri Laxmichand Jain, there is violation only to the extent of Rs. 15,000 because it is clear from p. 15 of the compilation that on 11th Sept., 1989, when deposit of Rs. 10,000 was accepted there was no violation and again on 13th Sept., 1989, when Rs. 15,000 was accepted, there was violation only to the extent of Rs. 5,000. Similarly in case of Shri Sitaram, there was an unpaid amount of Rs. 10,000 on 23rd Oct., 1989, when a further sum of Rs. 13,500 was accepted from him. Thus, in this case there was a violation of Rs. 3,500, therefore, we set aside the order of CIT(A) and uphold the imposition of penalty only to the extent of Rs. 18,500 (Rs. 15,000 for Laxmi Chand Jain and Rs. 3,5....
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....thorities were referring to deposit only. In any case, lower authorities had at no point of time have mentioned that assessee had returned the loan. He also referred to p. 14 which is copy of the statement of Shri Laxmichand Jain where in an answer to question whether he had deposited some money with the assessee, the answer was 'yes'. This also makes clear that it was a case of deposit which has been returned by assessee in violation of s. 269T. He also referred to the case of K.P. Madhusudhanan vs. CIT (2001) 169 CTR (SC) 489 : (2001) 251 ITR 99 (SC) where it was held that when the AO or the AAC issues a notice under s. 271, he makes the assessee aware that provisions thereof are to be used against him and these provisions includes the Ex....