TaxTMI 
TaxTMI 
2023 (5) TMI 877
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....come Tax Act, 1961 [hereinafter referred to as "the Act" for short], confirming the levy of penalty under Section 271D of the Act, for the Assessment Year (AY) 2016-17. 2. The assessee has challenged the levy of penalty raising the following grounds:- "1. The Ld. CIT(A) has erred in law and on facts in confirming the penalty of Rs.13,25,000/- u/s 271D of the Act for the alleged contravention of the provisions of Section 269SS of the Act without proper consideration and appreciation of the facts and the submissions. In view of the elaborate submission coupled with the legal decisions relied upon in support thereof, the penalty of Rs.13,25,000/- u/s 271D of the Act is required to be deleted. 2. The Ld. CIT(A) has erred in....
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.... genuineness of the transactions was not doubted and (ii) that the cash was taken for meeting business exigencies of paying salaries to employees. Reliance was placed on the following caselaws in support of the proposition that where the genuineness of loans taken in cash was not doubted and sufficient cause was adduced for so taking the loan, there was no violation of the provisions of Section 269SS of the Act and, therefore, no penalty could be levied under Section 271D of the Act. i. Hareshkumar Bechardas Patel Vs. Jt. CIT (2019) 69 ITR 73 (SN) (Ahd.) (Trib.), in ITA No. 2996/Ahd/2016 ii. ITO Vs. M/s. Bhandari Precession Forgings (P) Ltd. (Bangalore ITAT) in ITA No. 777 & 778/Bang/2010 iii. JICE Academy for Exc....
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....r had noted that the cash loan had been taken on 4 occasions and the bank statements of the assessee shown sufficient balance in the bank accounts of the assessee on those dates; therefore, business urgency was ruled out in such cases. "1. It is seen from above table that cash loan has been taken on four occasions, and the bank statements of the assessee company show that there existed sufficient balance in the bank accounts of the assessee on the date of acceptance of cash loan. (Annexure-A). Presence of sufficient balance in the bank accounts (more than the cash loan taken) does not support the argument of Assessee Company. 2. Further, 3 out of 4 days of cash loan transaction were working days for banks (as seen from the....
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....ting payment in cash rather than account payee cheque but in the present case the facts are not the same. 5.7 Further, the decision of Hon'ble Supreme Court in the case of Hindustan Steel Ltd. vs State of Orissa deals with mere technicality of an offense. The Hon'ble Apex Court observed that where the offence is merely technically, even if the minimum penalty is prescribed, the authority should not impose penalty. However, in the instant case, cash was accepted from the director 4 times, so the appellant is in habit of showing disregard to the provisions so it cannot be said to be a mere technicality. The appellant has to show reasonable cause in which the appellant has failed i.e. the appellant has not been able to show reason....
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....ate of taking or accepting such loan or deposit or specified sum, any loan or deposit or specified sum taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), the amount or the aggregate amount remaining unpaid; or (c) the amount or the aggregate amount referred to in clause (a) together with the amount or the aggregate amount referred to in clause (b), is twenty thousand rupees or more: Provided that the provisions of this section shall not apply to any loan or deposit or specified sum taken or accepted from, or any loan or deposit or specified sum taken or accepted by,- (a) the Government; (b) any banking company, post office savings ban....
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.... 8. The literal reading of the above shows that any amount received by modes other than cheques, as loans or advances, results in violation of the provisions of Section 269SS of the Act. There is no question of genuineness or bona fides of the transactions coming into picture. Therefore, this pleading of learned Counsel for the assessee is bereft of any merit. Our view is supported by the various decisions cited by the learned DR before us as above - by the ITAT Mumbai Bench in the case of Deepak Sales & Properties (P) Ltd. (supra) categorically holding that for escaping from the rigors from the Section 269SS of the Act, establishing genuineness or bona fides of the transactions is not sufficient. Similar decision was rendered by the Hon....