TaxTMI 
TaxTMI 
2007 (8) TMI 328
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.... the Tribunal is correct in concluding that there was reasonable cause for accepting deposits in cash exceeding Rs. 20,000 with reference to the provisions of section 273B of the Act ? (iii) Whether the Tribunal is correct in not considering the scope and the purpose of the provisions of section 271D of the Act, especially with reference to sections 269SS and 273B of the Act ? and (iv) Whether the Tribunal is correct in rejecting the ground relating to the violation of the principles of natural justice on the facts and in the circumstances of the case ?" 2. For the disposal of the appeals, the facts relating to Tax Case (Appeal) No. 552 of 2007 is referred. 3. The appellant-firm is one of the firms floated by one Mathivathanan a....
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.... (4) The customers come after the close of banking hours. (5) The entire deposits were received form outside source and no deposits were made by the partners. (6) The quantum of non-compliance is not very substantial com-paring with the total deposits accepted. (7) The acceptance of deposits is for business purpose of the group concerns, which require heavy cash for paying advances/consideration for land purchases. (8) The deposits have been treated as genuine in the assessment. This is argued that as provisions of section 269SS were brought into the statute only to curb the creation of bogus credits and, penalty may not be levied." 5. All the contentions of the appellant/assessee were negatived by the Asses....
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....d further submitted that in view of the findings of the Income-tax Appellate Tribunal for rejecting the claim on the ground that there is no material placed by the assessee to sustain the claim that the depositors have no bank account in Chennai, to accept the deposit in cash, and the shortage of cash in the business which led the assessees to accept the deposits in cash, which was not demonstrated and the assessees have not shown that there was cash deficiency to meet their day-to-day requirement in business. Hence, learned counsel for the appellants submitted that the assessee/appellants may be permitted to adduce certain materials before the Assessing Officer and for the said purpose, the matter could be remitted to the Assessing Officer....
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.... the facts and circumstances of the case, it should be analysed to ascertain as to the business exigencies. Again, the judgment of the Commissioner of Income-tax (Appeals) was negatived by the Special Tribunal. 14. Though the provisions of section 269SS contemplates that no person shall, after June 30, 1984, take or accept from any other person any loan or deposit otherwise than by an account payee cheque or account payee bank draft if, the amount of such loan or deposit or the aggregate amount of such loan and deposit. In case any deposit is accepted contrary to the above provisions in terms of section 271D, such person shall be liable to pay by way of penalty sum equal to the amount of the loan or deposit so taken or accepted. Ultimate....
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....aterials to show that the depositors have no bank account, and consequently to accept the deposits in cash. The Tribunal came to a correct conclusion that the assessees have also not demonstrated the shortage of cash in the business, which made the assessees to accept the cash. It also observed that the assessees have not shown that there was cash deficiency to meet their day-to-day business. For the above reasons, the Tribunal had interfered with the order of the Commissioner of Income-tax (Appeals) which ended without any material to support such conclusions. 19. Learned counsel for the appellant would rely upon the decision of this court reported in CIT v. Kasi Credit Corporation [2006] 280 ITR 129 and contended that the penalty shoul....