TaxTMI 
TaxTMI 
2013 (10) TMI 1327
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.... appeals. They relate to assessment years 2006- 07, 2007-08, 2008-09, 2009-10, 2010-11 and 2011-12. 3. Next two appeals in I.T.A. Nos. 1826(Mds)/2013 and 1827(Mds)/2013 are filed by Shri M. Palani Adecalam, on his own behalf. The relevant assessment years are 2011-12 and 2012-13. 4. The remaining four appeals are filed by the other son Shri M. Sougoumarin, for assessment years 2009-10, 2010-11, 2011-12 & 2012-13. 5. All these appeals are directed against the orders passed by the Commissioner of Income Tax (Appeals)-VI at Chennai. The appeals arise out of the orders of penalty, passed under Section 271E of the Income-tax Act, 1961. 6. Late Shri K. Muthukaruppan and his two sons, carrying on business at Pondicherry, had availed loans from....
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....n loans or deposits. It provides that no person shall take loan or accept deposit exceeding ` 20,000/- in aggregate in cash. If the above Section 269SS is violated, a penalty is provided under Section 271D. The penalty shall be a sum equal to the amount of loan or deposit taken or accepted by the person. Likewise, Section 269T provides the mode of repayment of certain loans or deposits. According to the above Section, no loan or deposit shall be repaid otherwise than by account payee cheque or account payee bank draft drawn in the name of the person who gave the loan or made the deposit. There also, the aggregate limit of the amount is ` 20,000/-. Violation of the above Section provides for levy of penalty under Section 271E which is equal ....
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....mmissioner of Income Tax (Appeals) held that the cash loans were availed by the assessees for meeting urgent business necessities. He held that assessees have established reasonable cause for accepting loans in cash. Therefore, the Commissioner of Income Tax (Appeals) held that the violation of law stated in Section 269SS was only technical in nature. He accordingly deleted the penalties levied under Section 271D, in the case of all these three assessees. 12. But, the Commissioner of Income Tax (Appeals) did not agree with the contentions of the assessees that there was again reasonable cause for repaying the loans in cash. The Commissioner of Income Tax (Appeals) held that the repayment of loans made by the assessees in cash substantively....
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....s carrying on the business of money lending under the name and style of "Vadamalayan Finance". It is seen from the records, as observed by the Assessing Officer, that Shri A. Kannan had no licence to carry on money lending business, but, still he was carrying on the said business. The details available in the record show that Shri A. Kannan had been advancing loans to the parties in cash, against pronotes. The pronotes are cancelled when the loans are repaid. The nature of the business carried on by Shri A. Kannan shows that the transactions of money lending were, by and large, made by way of cash transactions. When the assessees were accepting loans from Shri A. Kannan and repaying loans to him, it is obvious that the transactions must be ....
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....) has observed that an order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal proceeding, and penalty will not ordinarily be imposed unless the party obliged, either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of its obligation. The Court observed that penalty will not also be imposed merely because it was lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. 21. When we examine the facts and circumstances of the cases placed before us, we find t....