TaxTMI 
TaxTMI 
2015 (3) TMI 19
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....f the case, the Tribunal was not right in rejecting the assessee's contention that Form 3CD wherein the details regarding loan transactions required to be disclosed (forming part of assessment records) being the foundation of penalty proceedings, the penalty levied on 28.3.2000 was barred by limitation with reference to the order passed under Section 143(1)(a) on 25.3.1999? 2. Whether on the facts and in the circumstances of the case, the Tribunal was justified in confirming the penalty especially when the assessee's turnover was 4.97 crores and the amount borrowed on the five occasions in the year involved only a sum of Rs. 6.60 lakhs, this having constituted a mere 1.3% of the total transactions, the violation was on....
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....After considering the explanation offered by the assessee, but not satisfied with the explanation, penalty proceedings was initiated under Section 271D of the Income Tax Act. For better appreciation of facts, it is necessary to extract herein the relevant portion of the order passed under Section 271D of the Income Tax Act: 1) It is stated in the written explanation that the lender, Sri.A.Kumar, is the husband of the partner, Smt.K.Jayanthi and son of partner, Smt.Kamakshiammal. The loans were taken from him in cash and the amounts so received were deposited into the current account of the assessee in Central Bank of India so as to have adequate cash balance in the account to prepare demand drafts in the names of th....
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....th the provisions of Section 269SS. Only because it was convenient for the assessee to accept the loans in cash, it could not be held that it had a reasonable cause for its failure to comply with the provisions of Section 269SS. It is for the assessee to manage its business affairs in such a manner that the provisions of law as laid down u/s 269SS are not violated. 2)........ 3)....... 4) As per the provisions of Section 273B, penalty u/s 271D will not be imposed if the assessee proves the existence of a reasonable cause for its failure to comply with the provisions of Section 269SS. In this case, the assessee has miserably failed to prove any such reasonable cause for which it had contravened the provisions of....
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.... find that the prime consideration for the Learned CIT(A) to delete the penalty is that the creditors were regular suppliers for the assessee and identity of the transactions is established. As regards exigencies of the situation in which the cash transfers were taken, it is noted that all the loans were accepted in cash to make cash deposits in the assessee's bank account so that demand drafts could be prepared in the name of the creditors. The A.O. has observed that all the creditors were regular suppliers to the assessee from whom the assessee made frequent credit purchases and there was no urgency to make the demand drafts on the dates on which the same were made. The A.O. Had further noted that had the loans been ....
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....cription of Section 269SS. The mandate given under Section 269SS is clear. Any departure from the said mandate invites penalty as is envisaged under Section 271D. It is clearly laid down in the section that no person shall after 30-6-1984 take or accept from any other person any loan or deposit otherwise than by any account payee cheque or account payee bank draft, if the amount of loan or deposit or the aggregate amount of such loan or deposit is Rs. 20,000 or more. This panoply of law was brought on the statute to counter the tax evasion. Therefore, it is not sufficient to say that simply the transaction was genuine, so Section 269SS is not applicable. One cannot accept such proposition of law. Th....
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....is nothing to show that there was urgency for the assessee to avail the loan in cash in violation of Section 269SS and that the Assessing Officer has given a detailed reasoning as to why he finds that such a transaction would not come under the exception clause of Section 271D of the Income Tax Act. The Tribunal has confirmed the said finding of fact. 10. Being a pure finding of fact, we find no reason to interfere with the order of the Tribunal. In fact, the assessee himself has relied on the decisions of this Court in the case of Commissioner of Income -Tax V. Balaji Traders reported in (2008) 303 ITR 312 (Mad) and in the case of Commissioner of Income-Tax V. Deccan Designs (India) P. Ltd. reported in (2012) 347 ....