TaxTMI 
TaxTMI 
2020 (11) TMI 935
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....(A)-3/VSP/2018-19 dated 25.02.2019 for the Assessment Year (A.Y.) 2013-14 and cross objections are filed by the assessee in support of the order of the Ld.CIT(A). 2. All the grounds of appeal are related to the levy of penalty u/s 271D of the Income Tax Act, 1961 (in short 'Act'). During the course of assessment proceedings relevant to the A.Y.2013-14, the Assessing Officer (AO) found that from 01.04.2012 to 11.06.2012, the assessee had received the amounts in cash of Rs. 6,99,12,850/- as loan. Therefore, the Addl.CIT, Central Range, Visakhapatnam has initiated the penalty u/s 271D of the Act and issued show cause notice calling for explanation of the assesse as to why the penalty should not be levied for contravention of provisions of s....
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.....2012. Subsequently, the bank operations were revived in HUF after the powers of bank operations were given to new Karta Mrs. GBM Ratna Kumari and from then onwards the payments were made through cheques. Since the cash deposits were trade transactions and accepted due to death of Managing Director during the interim period the assessee requested to drop the penalty proceedings. The Addl.CIT did not convince with the explanation of the assesse and verified the books of accounts and found that the assessee had operated the bank accounts and made some payments through RTGS on some occasions. Since some transactions were made through bank during the interim period, the Addl.CIT did not believe the contention of the assesse that the bank accoun....
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....onable cause' for transgression of the statutory provisions. It is for the appellant to show that there is 'reasonable cause' preventing him from acting as mandated by law. In the presents ease, the "reasonable cause' explained/given by the appellant is the death of Mr. Manoj Kumar on 07.02.2012 by way of murder at Bangalore. Shri Manoj Kumar Managing Director (MD) of the appellant company and also the Karta of Manoj Kumar (HUF). The above facts are not in dispute. Further, it is not disputed about the scheme subscriptions being run by HUF and subscribers ultimately receiving/buying gold ornaments from the appellant company. The contention of the appellant is that on the death of Mr. Manoj Kumar, the bank accounts of the app....
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....nt. In View of the above, it cannot be said that the HUF was making payments through cheques during the relevant period. The Addl. CIT mistook the above payments to be made by the HUF. The payments, were made by appellant company on behalf of HUF after operations in the bank accounts of appellant were restored. Further, it is mentioned that the appellant issued cheques on 03.04.2012 and 04.04.2012. The same are done after transactions in bank account of the appellant company were restored. In view of the above factual position, it is held that the appellant was prevented from 'reasonable cause' for not obtaining payments through cheques as was being done earlier and thereafter. Accordingly, once the 'reasonable cause' has be....
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....h the assessee company by HUF. Therefore, the transactions in question were business transactions and also argued that there cannot be any better reason than the death of Karta and Managing Director of the company to take lenient view for dropping the penalty proceedings. Therefore, argued that the transactions in question were business transactions on which penalty is not leviable and the death of Managing Director is sufficient and reasonable cause for accepting the cash, hence requested to uphold the order of the Ld.CIT(A) and dismiss the appeal of the revenue. 6. We have heard the rival contentions and gone through the orders of the authorities below. There is no doubt that the Managing Director of the company Shri G.Manoj Kumar w....
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.... show that the cash receipts accepted by the company do not represent the scheme subscriptions for redemption of the jewellery as stated by the assesse. The bank transaction stated to have been examined by the Ld.CIT(A) and given a finding that the company has made payments on behalf of the HUF. The same was not controverted by the Ld.DR during the appeal hearing. The assesse has filed the paper book and in paper book page No.20 to 31 Vaibahv Empire Pvt Ltd(VEPL) account is furnished by the assessee in the books of HUF. Similarly in page No.33 to 44 the account of Shri G.Manoj Kumar, HUF, Proprietor, Vaibhav Jewellers is furnished in the books of Vaibhav Empire Private Ltd. From the above pages of the paper book, we find that all the deposi....