TaxTMI 
TaxTMI 
2023 (5) TMI 877
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.... 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 law and on facts in not following the legal ratio laid dow....
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.... 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 Excellence Pvt. Ltd. Vs. NFAC (ITAT Bangalore) in ITA No.704/Bang/2022 iv. CIT Vs. Bhagwatiprasad Bajoria, 263 ITR 487 (Guwahati HC) v. CIT Vs. Idhayam Pub....
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....ency 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 table above), and net banking facilities being available round the clock, also does not support the argument of the assessee company that these loans were taken for emergency payments." 6. The learned DR further re....
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....e 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 reasonable cause. In view the above, the penalty imposed is confirmed, accordingly Ground No. 1 of the appeal is DISMISSED." 7. We have heard rival contentions. The issue before us relates to levy of penalty for accepting loan and advances in cash in violation of provisio....
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....e 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 bank or co-operative bank; (c) any corporation established by a Central, State or Provincial Act; (d) any Government company as defined in clause (45) of section 2 of the Companies Act, 2013 (18 of 2013); (e) such other institution, association or body or class of institutions, associations or bodies which the Cen....
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....rted 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'ble Kerala High Court in the case of Listin Stephen (supra) and also by the Hon'ble Apex Court in the case of Vasan Healthcare (P) Ltd. (supra) and Al Ameen Educational Trust (supra). 9. The pleading of the learned Counsel for the assessee that the cash was required to meet urgent business requirements is also negated by the findings of fact by the Assessing Officer that the ass....