TaxTMI 
TaxTMI 
2002 (3) TMI 6
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....ing Officer to look into genuineness of loan or deposit?" The facts of this case are that the assesses is a proprietor of Viva Art Creation and engaged in the export business of garments. The assessment was completed under section 143(1)(a) of the Income-tax Act, 1961 (for short, "the Act of 1961 ") on November 30, 1998. Later on, the Assessing Officer noted that the assessee has taken loan of Rs. 2.5 lakhs in cash. This was noted from page No. 3 of the tax audit report. As per para, 10 of the said report Mukesh Kumar Manwani had advanced a cash loan of Rs. 2.5 lakhs to the assessee. On the basis of the information received from the Assessing Officer, the Joint Commissioner of Income-tax issued a show cause notice dated December 24, 1998, ....
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....se intention of the assessee to violate the provisions of law. It was also observed that since the assessee was not having sufficient time and funds, the cash loan was taken to avoid further delay in the process of clearing the cheque and at the time of taking the cash loan the assessee was not aware about the TT of 10,000 US dollars otherwise he would not have taken the cash loan from his brother-in-law, Shri Mukesh Manwani. In view of these peculiar circumstances, the Tribunal held that the cash loan was taken by the assessee in exceptional circumstances and it is a case of reasonable cause which was proved by the assessee. Consequently, the Tribunal deleted the penalty imposed by the Joint Commissioner of Income-tax and confirmed by the ....
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....f the provisions of section 269SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit so taken or accepted. (2) Any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner." "273B. Notwithstanding anything contained in the provisions of clause (b) of sub-section (1) of section 271, section 271A, section 271AA, section 271B, section 271BA, section 271BB, section 271C, section 271D, section 271E, section 271F, section 271G, clause (c) or clause (d) of sub-section (1) or sub-section (2) of section 272A, sub-section (1) of section 272AA or sub-section (1) of section 272BB or clause (b) of sub-section (1) or clause (b) or clause (c) of sub-section (2) of section 273, no pen....
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....e for the said failure", will have its full operation. Section 273B permits the assessing authority not to impose a penalty provided under section 271D of a sum equal to the amount of loan or deposit taken or accepted in spite of the breach of the provisions of section 269SS wherein the person has to accept a loan or deposit or the aggregate amount of such loan or deposit by way of account payee cheque or account payee bank draft, if the assessee or the person proves before the assessing authority that there was a reasonable cause for not accepting the amount of loan or deposit by way of account payee cheque or account payee bank draft. Under section 273B a judicial discretion is left with the assessing authority not to levy a penalty under....