TaxTMI 
TaxTMI 
2019 (12) TMI 975
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.... r.w.s.147 of the Income Tax Act, 1961(hereinafter referred to as "the Act") dated 26/03/2013 and penalty order passed u/s.271D of the Act dated 01/05/2013 relevant to Assessment Year (AY) 2010-11. 2. The assessee has raised the following grounds of appeal: 1.0 The grounds of appeal mentioned hereunder are without prejudice to one another. 2.0 The learned Commissioner of Income-tax (Appeals)-III, Rajkot [hereinafter referred to as the "CIT(A)"] erred in law and on facts in confirming penalty u/s.271D of the Income-tax Act, 1961 [hereinafter referred to as to the "Act"] of Rs.14,80,000/- levied by the Addl.CIT, Range-2, Rajkot on account of alleged contravention of provision of section 269SS of the Act. The penalty being....
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.... 3.1 In view of the above, the AO initiated the penalty proceedings u/s 271D of the Act, vide show cause notice dated 16/04/2013. The assessee in compliance to such notice failed to submit any reply before the AO. Therefore, the AO held that the unsecured cash loan received by the assessee is in contravention to the provisions of section 269SS of the Act. Accordingly the AO levied the penalty of Rs. 14,80,000/- under the provision of section 271D of the Act. 3.2. Aggrieved assessee preferred an appeal to the Ld. CIT (A). The assessee before the Ld. CIT (A) submitted that the he has taken cash from his close relatives for the purpose of purchasing the residential property which were duly recorded in books of accounts. The assess....
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....he IT act, 1961 has observed that 269SS r.w.s. 271D has been brought into statute book under chapter XXB to curb the menace of black money circulation, which leads to evasion of taxes. These provisions are essentially meant to counter act evasion of tax by debarring the tax payers from accepting unsecured loans/deposits in cash. In fact, the original section 276DD was more stringent in as much as it provides imprisonment of the person, who accepts cash loans upto two years and also liable to a fine equal to the amount of loan or deposit. The newer section 271D provides only for fine equal to the amount of loan/deposit taken or accepted. 6. The appellant also failed to give any credible explanation, so as to establish that there was....
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....t of the provision of section 269SS was to discourage the assessee to justify their unaccounted money by taking cash entries from different persons. In the case on hand, the genuineness of the transaction was not doubted by the authorities below. Therefore, the penalty cannot be levied u/s 271D of the Act. 5. On the other hand, the Ld. DR submitted that there was no reasonable cause furnished by the assessee for accepting the loan in cash. Therefore no immunity can be given under the provision of section 271D r.w.s. 273B of the Act. The Ld. DR vehemently supported the order of the authorities below: 6. We have heard the rival contention and perused the materials available on record. From the preceding discussion we note certain facts ....
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....of such loan and deposit is Rs. 10000 or more. This prohibition will also apply in cases where on the date of taking or accepting such loan or deposit, any loan or deposit taken or the aggregate amount of such loan and deposit is Rs. 10000 or more. This prohibition will also apply in cases where on the date of taking or accepting such loan or deposit, any loan or deposit taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), and the amount or the aggregate amount remaining unpaid is Rs. 10,000 or more. The prohibition will also apply in cases where the amount of such loan or deposit, together with the aggregate amount remaining unpaid on the date of which such loan or depos....