TaxTMI 
TaxTMI 
2020 (10) TMI 935
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....adjudicate the case of Sri.Gopal S.Pandith. 4. The brief facts in the case of Sri.Gopal S.Pandith, are as follow: The assessee an individual, who is engaged in the business as a developer and builder. The assessee had taken loans from various persons. These loans were taken and repayment were made in cash, thereby violating the provisions of section 269SS and 269T of the I.T.Act. The Joint Commissioner of Income-tax, for violation of the provisions of section 269SS and 269T of the I.T.Act, imposed penalty u/s 271D and 271E of the I.T.Act, being a sum equal to the loan / deposit accepted and loan / deposit repaid. 4.1 Aggrieved by the orders imposing penalty u/s 271D and 271E of the I.T.Act, the assessee filed appeals before the first appellate authority. The CIT(A) confirmed the penalty imposed by the JCIT. On further appeal, the ITAT vide order dated 21.11.2017 in ITA Nos.1084, 1085, 1090 to 1971/Bang/2015, restored the cases to the CIT(A). The ITAT held that the CIT(A) did not adjudicate the contentions of the assessee that the orders imposing penalties u/s 271D and 271E of the I.T.Act are barred by limitation. The Tribunal also directed the CIT(A) to consider the issue ....
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....2,000. The penalty imposed u/s 271E of the I.T.Act was Rs. 17,66,761 for assessment years 2006-2007 to 2009-2010. The details of the penalty imposed u/s 271D of the I.T.Act and u/s 271E of the I.T.Act, the relevant assessment years, the persons from whom the loans / deposits are repaid, the persons to whom loans / deposits are repaid in cash, are detailed below:- I. Penalty u/s 271D of the I.T.Act Asst.Year ITA No. Amount of penalty Amount considered for penalty Persons Relationship 2004-05 480/B/2020 50,000 50,000 Rajeswari G.Pandith Wife 2005-06 481/B/2020 5,00,000 5,00,000 Hirenkumar Patel Others 2006-07 482/B/2020 2,32,000 2,32,000 Sushma G.Pandith Daughter 2007-08 484/B/2020 13,60,000 13,60,000 i. Sushma G.Pandith Rs. 4,00,000 i. Daughter ii.Deepak Rs. 1,50,000 ii. Son iii.Sabita Rs. 1,00,000 iii.Daughter iv. Rajeshwari G.Pandith Rs. 2,00,000 iv. Wife v. Savita Rs. 1,50,000 v.Daughter vi. Hiren Kumar Patel Rs. 3,60,000 vi. Others 2008-09 486/B/2020 15,50,000 15,50,000 i. Rajeshwari G.Pandith Rs. 12,00,000 i. Wife ii.Hiren Kumar Pate....
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....ly accepts deposit. In the case of loan it is the borrower at whose instance and for whose needs the money is advanced. The borrowing is primarily for the benefit of a borrower although the person who lends the money may also stand to gain thereby earning interest on the money lent. In the instant case, this condition was not applicable because there was no relationship of the depositor or a creditor as no interest was involved. This was neither a loan nor a deposit. At the same time. the words 'any other person' are obviously a reference to the depositor as per the intention of the Legislature. The communication/transaction between the husband and wife are protected from the legislation as long as they are not for commercial use. Otherwise, there would be a powerful tendency to disturb the peace of families. to promote domestic broils, and to weaken or to destroy the feeling of mutual confidence which is the most enduring solace of married life. In the instant case, the wife gave money to husband for construction of a house which was naturally a joint venture for the property of the family only. This transaction was not for commercial use. The amount dire....
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....w in the instant case, the assessee had a reasonable cause within the meaning of section 273D. Thus, keeping in view the entire facts of the instant case, and also keeping in view the intention of the Legislature in enacting the provisions of section 269SS, it was to be held that the assessee was prevented by sufficient cause from receiving the money by an account payee cheque or account payee bank draft. In the instant case, the assessee was of the opinion that the amount in question did not require to be received by an account payee cheque or account payee draft. Thus, there was a reasonable cause and no penalty should have been levied. From the above, it would be clear that the assessee had taken plea that firstly there was no violation of the provisions of section 269SS. Secondly, there was a reasonable cause. Thirdly, the assessee was under the bona fide belief that he was not required to receive the amount otherwise than by an account payee cheque or account payee draft. As an alternative submission, it was contended that the default could be considered either technical or venial breach of the provisions of law and, therefore, no penalty under section 271D w....
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.... the Act. 14. In the light of the aforesaid judicial pronouncements, we are of the view that imposition of penalty u/s.271D of the Act cannot be sustained. The same is directed to be deleted. The appeal of the Assessee is allowed." 5.3 In the instant case also, we have noticed that the assessee has made transactions of taking loan from his wife, son and daughters, who are family members. We notice that the co-ordinate Bench has followed the judgment rendered by the Hon'ble Punjab & Haryana High Court in the case of Sunil Kumar Goel (supra), wherein it has been held that the family transactions would fall within the meaning of "reasonable cause" u/s 273B of the Act. Further, the Hon'ble Madras High Court has cancelled the penalty in respect of loan transactions between father-in-law and daughter-in-law in the decision of M.Yesodha (supra). The decision rendered in the case of Smt.Deepika was followed by another co-ordinate Bench in the case of Shri Sanmathi Ambanna (supra). Accordingly, consistent with the view taken by the co-ordinate Bench in the case of Smt.Deepika (supra), which has been rendered by following various decision of High Courts and Tribunal, we hold that....
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.... JCIT had imposed penalty u/s 271D of the I.T.Act for a sum of Rs. 2,93,900. According to the JCIT, the assessee had accepted loan of Rs. 2,93,900 in cash from Sri.Hiren Kumar Patel, thereby violating the provisions of section 269SS of the I.T.Act. The penalty imposed by the JCIT was confirmed by the CIT(A). On further appeal, the ITAT restored the issue to the CIT(A) in ITA No.1060/Bang/2015 (order dated 21.11.2017). The ITAT held that the CIT(A) did not adjudicate the contentions of the assessee that the order imposing penalty u/s 271D of the I.T.Act, is time barred. The ITAT also directed the CIT(A) to consider the issue on merits afresh, in the event, the CIT(A) holds that the order of penalty u/s 271D of the I.T.Act is not time barred. Pursuant to the ITAT order, the CIT(A) passed order on 05.03.2020. The CIT(A) held that the order u/s 271D of the I.T.Act is not time barred. On merits, the penalty imposed u/s 271D of the I.T.Act amounting to Rs. 2,93,900 was confirmed. 6.2 Aggrieved by the order of the CIT(A), the assessee is in appeal before the ITAT. The learned AR submitted that the amounts received from Sri.Hiren Kumar Patel was disclosed under the head "current acco....