TaxTMI 
TaxTMI 
2017 (4) TMI 717
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....s under:- Date Particulars Vch type Vch. No Debit Credit 2.4.2011 Cash in hand Receipt 12 70,000 6.4.2011 Cash in hand Receipt 29 1,80,000 7.4.2011 Cash in hand Receipt 35 4,50,000 8.4.2011 Cash in hand Receipt 37 3,10,000 14.5.2011 Cash in hand Receipt 178 70,000 26.5.2001 Cash in hand Receipt 215 1,60,000 2.10.2011 Cash in hand Receipt 578 2,00,000 20.12.2011 Cash in hand Payment 1631 1,00,000 22.12.2011 Cash in hand Payment 1646 1,00,000 24.12.2011 Cash in hand Payment 1663 1,00,000 27.12.2011 Cash in hand Payment 1683 1,00,000 03.01.2012 Cash in hand Payment 1730 1,00,000 10.1.2012 Cash in hand Payment 1775 1,00,000 18.01.2012 Cash in hand Payment 1829 1,00,000 25.1.2012 Cash in hand Payment 1872 1,00,000 29.1.2012 Cash in hand Payment 1892 1,00,000 15.02.201....
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....undry Debtors", lf the advance / security deposit has not been utilized for more that 6 to 9 months, we tend to return the money to avoid dispute future. As said above, the repayment entry also made in the books of accounts consolidated for two / three days. However, each payment / receipt will be less than Rs. 20,000/- per person. Hence, I wish to bring to . your notice that I have not violated the provisions of f section 269SS/ 269T. As reading in the books of account was made on consolidated basis, prima facie it appears that I have violated the provisions. However, I have not violated the provisions of section 269SS/269T, , All these transaction have also been explained orally to the Assessing Officer during the scrutiny proceedings. Kindly consider the above submissions and drop the penalty proceedings''. During the penalty proceeding before ld. Assistant Commissioner of Income Tax (in short ''ld. ACIT'') vouchers were produced by the assessee and these were examined. As per ld. ACIT assessee was repeatedly getting the advances from very same persons and none of the advances were settled against sale of any fuel. As per ld. ACIT, each of the advance was re....
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....low the sum of Rupees twenty thousand. Further, as per ld. ACIT, assessee if it had actually received money in tranches from very same person it would have opened separate ledger account for each such person and not categorized all of them under the head sundry debtors. Since assessee had received loans aggregating to 714,40,000/- and repaid the same amount, all in cash, during the currency of the previous year, ld ACIT came to a conclusion that there were violation of both sections 269SS and 269T of the Act. He levied penalty both u/sec. 271D and 271E of the Act at a sum of Rs. 14,40,000/- each. 4. Aggrieved, assessee moved in appeals before ld. Commissioner of Income Tax (Appeals) against penalty levied u/s. 271D as well as 271E of the Act. Contention of the assessee before ld. Commissioner of Income Tax (Appeals) was that each of the amount received as well as repaid were below Rupees twenty thousand and hence Sections 269SS and 269T of the Act were not attracted. However, ld. Commissioner of Income Tax (Appeals) was not impressed by any of the arguments raised by the assessee. He upheld the order of the ld. ACIT citing the following reasons. 1. ''The appellant is ta....
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....cessary that ld. ACIT himself should initiate the penalty proceedings. As per the Ld. Authorised Representative, penalty proceedings could be initiated by the ld. Assessing Officer and completed by the ld. ACIT. Hence according to him, orders u/section 271D and 271E of the Act were barred by limitation. 6. On merits ld. Authorised Representative submitted that in the nature of the trade of the assessee, it was not possible to receive advances in cash. According to him, each of the person from whom money was accepted were customers of the assessee and the transactions were considered as genuine by the lower authorities. According to him, if the loan transactions were disbelieved an addition ought have been made u/s.68 of the Act. When loan and repayment of such loan were believed, then the transactions were genuine and Sections 271D and 271E of the Act could not be applied. Thus, according to him, penalty levied under both the sections had to cancelled. 7. Per contra, ld. Departmental Representative strongly supported the orders of the authorities below. 8. We have heard the rival submissions and perused the material on record. In so far as question of limitation is concern....
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.... that the provisions of this section shall not apply to any loan or deposit taken or accepted from, or any loan or deposit taken or accepted by,-(a) Government ;(b) any banking company, post office savings bank or co-operative bank ;(c) any corporation established by a Central, State or Provincial Act ;(d) any Government company as defined in section 617 of the Companies Act, 1956(1 of 1956) ;(e) such other institution, association or body or class of institutions, associations or bodies which the Central Government may, for reasons to be recorded in writing, notify in this behalf in the Official Gazette. Provided further that the provisions of this section shall not apply to any loan or deposit where the person from whom the loan or deposit is taken or accepted and that person by whom the loan or deposit is taken or accepted are both having agricultural income and neither of them has any income chargeable to tax under this Act''. Section 269T No branch of a banking company or a co-operative bank and no other company or co-operative society and no firm or other person shall repay any loan or deposit made with it or any specified advance received by it oth....