TaxTMI 
TaxTMI 
2019 (9) TMI 1035
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....s vs. Cit (Jharkhand High Court) (2007) and jurisdictional ITAT decision i.e. the decision of the ITAT, Cuttack Bench in case of Dipak Kumar Sahu Vs. JCIT (ITA NO.115/CTK/2016) and PATO Builders Pvt. Limited Vs. ACIT of Ranchi ITAT, Ranchi (ITA No. 33/Ran/2014). However Ld. CIT(A) mentioned that the said case laws are not applicable as the facts of the cases are different as decided by the JCIT. Therefore The Ld. CIT(A) omitted to follow the question of law decided in the said judgement Therefore imposition of penalty of Rs. 14,00,000/- is illegal and should be deleted in full. 2. For that, the Ld. CIT(A) is illegal and unjustified towards conforming the penalty of Rs. 14,00,000/- u/s 271D of the Income Tax Act 1961 when the transactions are neither loan nor deposit in nature. The Ld. A.O. has not arrived at a conclusion that the transactions are either loan or deposit. therefore neither the A.O. nor the JCIT nor the CIT(A) found that the transactions are loan or deposit in nature. The cash transactions are made for some reasonable cause and duly submitted before the A.O. & JCIT. Therefore violation of Sec. 269SS does not attract. Therefore imposition of penalty of Rs. 14,00,00....
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.... reasons 1. Khirod Kumar Swain 50,000/- For medical emergency 2. Jyoti Prakash Nayak 3,50,000/- -do- 3. Arjeet Mohapatra 1,20,000/- -do- 4. Nihar Ranjan Rout 80,000/- -do- 5. Manoj Kumar Biwal 2,00,000/- For establishment of school 6. Sasanka Sekhar Sahu 3,00,000/- -do- 7. Nrusingh Charan Nayak 3,00,000/- From father Total: 14,00,000/- In response to the Assessing Officer's requisition as to why penalty u/s.271D of the Act should not be imposed, ld A.R. of the assessee submitted that neither any of the transactions were doubtful nor any transaction was made to evade tax and such no penalty is leviable. It was also submitted that the receipts of cash by the assessee were neither loan or deposit. Ld A.R. also explained the circumstances under which the sums received by different persons. However, the Assessing Officer did not accept the explanation of the assessee and observed that the assessee has received the sums in contravention of section 269SS of the Act and, accordingly, levied penalty of Rs. 14,00,000/- u/s.271D of the Act. 4. On appeal, the CIT(A) confirmed the levy of penalty u/s. 271D of the Act. 5. We ....
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....education of children of the downtrodden people. Ld A.R. further submitted that as it was agreed between the persons constituting an AOP that the bank account will be opened in any Nationalized Bank in the name of the school. Meanwhile, until opening a bank account in the name of the school, the amount of contribution from the persons of AOP will be kept with Shri G.C.Nayak, i.e. assessee and the same was deposited to his bank account. Ld counsel strenuously contended that in view of factual position supported by documentary evidence, these amounts received by the assessee on behalf of AOP i.e. Manoj Kumar Biswal, Sasanka Sekhar Sahu cannot be treated as loan or deposit or specified sum in contravention of provisions of section 269SS of the Act. 9. Ld A.R. submitted that for invoking and levying penalty u/s.271D of the Act, it is the duty of the AO to establish that the assessee has taken or accepted any loan or deposit or specified sum in contravention of the provisions of section 269SS of the Act but in the present case all the impugned transactions are neither loan or deposit nor specified sum in contravention of section 269SS of the Act. Therefore, the impugned penalty order a....
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....o medical emergency and exigency, then such transaction falls within the section 273B of the Act and thus, immunity of levy of penalty u/s.271D should be allowed to the assessee. 14. Placing reliance on the decision of Jodhpur Bench of the Tribunal in the case of Ridhi Sidhi Infraprojects Pvt Ltd vs JCIT in ITA No.49/Ju/2013 for A.Y. 2009-2010 order dated 18.3.2013, ld A.R. submitted that when the assessee has taken cash amount under bonafide belief that a transaction with its AOP is outside purview of penalty provisions being a transaction between two sister concerns and if it is properly explained, then penalty u/s.271D of the Act cannot be imposed on such transaction. Ld A.R. submitted that the rational behind the provisions of section 269SS has been explained by the CBDT vide circular No.387 dated 7.7.1984, wherein, it has been mentioned that unaccounted cash found during the course of search carried by the department is often explained by tax payers as representing loans taken from or deposits made and unaccounted income is thus brought in the books of account and provisions of section 269SS of the Act was brought into the Statute with a view to deal with such situations, whe....
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....is a heart patient who undertook open heart surgery and the amount received from his brother -in-law, Khirod Kumar Swain, nephew, Jyoti Prakash Nayak, son-in-law, Shri Arjeet Mohapatra and brother in law, Nihar Ranjan Rout under medical emergency cannot be treated as loan or advance in contravention of section 269SS of the Act. He submitted that medical emergency is itself a reasonable cause from receiving cash from the relatives and family members out of love and affection as a support during tough time and due to this bonafide and reasonable cause, immunity u/s.273B of the Act should be granted to the assessee on these four transactions. Ld A.R, further submitted that the cash received by the assessee from the members of AOP in which the assessee was also a member only for the purpose of keeping the same in the bank account till the account is opened in the name of the school, therefore, the same cannot be treated as loan or advance which attracts penalty u/s.271D of the Act. Ld A.R. submitted that this fact also gets support from the documentary evidence from the copy of agreement placed at paper book at pages 63 & 64 specially clause 5 pertaining to opening of bank account. Ld....
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.... was stated by them that they have the impugned amounts to the assessee for his treatment under medical emergency, then such transaction cannot be held as transaction of loan or advance. 22. The object of introducing section 269SS of the Act was to ensure that a tax payer was not allowed to give false explanation for his unaccounted money or if the tax payer made some false entries, he would not escape by giving false explanation for the same. It was noticed by the tax authorities that during the search and seizure operation unaccounted money was found and the taxpayer usually gave an explanation that he had borrowed or received deposits from his relatives or friends and, consequently, it became easy for the so called lender to manipulate his record to suit the plea of the tax payer Section 269SS of the Act was introduced by the legislature in order to curb this menace and do away making false entries in the books of account and later give an explanation for the same. Consequently, section 269SS of the Act was inserted to the Act requiring that no person shall take or accept any loan or deposit, if it exceeds more than Rs. 20,000/- in cash. Further Section 271D provides that a pe....