TaxTMI 
TaxTMI 
2019 (4) TMI 293
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....y of loans from various persons and credited in cash to his bank accounts. According to the assessee, this was done to show that there were regular transactions in his bank account, for the purpose of producing proof before an authority from whom he was trying to get a visa. The Assessing Authority had accepted the explanation with respect to the source of the amounts, while finalising the assessment. But the Joint Commissioner of Income Tax had initiated a proceedings for imposition of penalty, under Section 271D of the Act, on the basis that the assessee had accepted the amounts, which were credited in the bank accounts, from various persons in cash, in violation of the provisions contained under Section 269SS of the Act. In the explanation submitted to the show cause notice, the assessee admitted that he received the loans by way of cash, in violation of the restraint contained under Section 269SS of the Act. According to the assessee, such loans received in cash were deposited in the bank accounts maintained by him with the South Indian Bank, Uzhavoor Branch and Dhanalaxmi Bank, Pala Branch. It is stated that, on the same day itself, the loan amounts were repaid to the respecti....
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....able cause which can be considered against imposing penalty, because when the source is provided the violation becomes technical. Finding that the above said decision would squarely apply, it was held that the assessee was successful in showing reasonable cause coming within the purview of Section 273 B of the Act. 4. In the appeal filed by the Department (Revenue) before the Income Tax Appellate Tribunal, Cochin Bench, the findings of the Commissioner (Appeals) were reversed. Relying on a decision of the Honourable Supreme Court and other decisions rendered by this Court, the Appellate Tribunal observed that, the fact that the amounts were returned to the lenders immediately cannot be taken as a reason to exonerate the assessee from the liability of penalty. It was found that, the assessee had failed to establish any reasonable cause for accepting the loans for more than Rs. 20,000/- from various persons in cash, otherwise than through crossed cheques or demand drafts, in violation of Section 269SS. Finding that there exists no legal and acceptable reasons to exonerate the assessee from the liability of penalty under Section 271D of the Act, the appeal filed by the Revenue was al....
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....come Tax v. P K Shamsuddin (ITA No.237/2010)(unreported) a Division Bench of this Court observed that, furnishing source of the lenders, which is accepted by the department itself, is a reasonable cause against the levy of penalty, because when the source is provided the violation becomes technical. It was found that the conclusions arrived by the tribunal in exonerating the appellant therein have to be upheld, because there is no tax evasion involved or black money introduced into the business. On the facts of the said case, evidence was to the effect that the creditors had borrowed bank loans and the money was given in cash to the assessee after drawing from the loan accounts of the lenders. This Court found that, acceptance of the above said reason by the Tribunal as a reasonable cause under Section 273B need to be confirmed, because there arose no substantial question of law warranting interference of this Court. 10. In K.V. George v. Commissioner of Income Tax [(2014) 42 Taxman.com 261 (Kerala)] a Division Bench of this Court had distinguished P.K Shamsuddin's case (supra) on the factual aspects by finding that, the source of the fund of the creditors in the said case was....
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....is Court in the Commissioner of Income Tax, Trichur v. Al-Ameen Educational Trust [(2018)254 Taxman 402 (Ker)], where the assessee had offered the following explanations; i). No evasion of tax, hence no penalty can be levied. ii). Deposits taken from staffs were refundable. iii). Rs. 5,00,000/- was a loan taken from one Zeenath, since cash was required urgently. iv).No penalty proceedings issued by Assessing Officer. The assessee in that case had explained the details of loans and deposits taken from its staff members and also indicated that some of those loans were repaid by cheques. This Court observed that, the contention of refundable advance even if accepted, would not offer any mitigation to the assessee in so far as the penalty imposed under Section 271D, since the law does not distinguish refundable or not refundable loans or deposits. As far as the urgent requirement of funds, it was found that the ground raised was of general or vague nature, without any substantiating materials produced. Contention that the Assessing Officer had not initiated any proceedings was rejected on the finding that it was clearly recorded in the assessment order about the assessee h....