TaxTMI 
TaxTMI 
2009 (3) TMI 131
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....90 6-6-1990 12-6-1990 Rs. 25,000 30,000 10,000 10,000 20,000 15,000 20,000 15,000 3. The aforesaid cash loans were taken during the financial year 1990-91 (assessment year 1991-92). According to the appellant-Revenue, the action of the respondent-assessee in taking the aforesaid cash loans was in clear violation of section 26955 of the Act. Section 269SS of the Act is being extracted hereunder: "269SS. No person shall, after the 30th day of June, 1984, take or accept from any other person (hereafter in this section referred to as the depositor) any loan or deposit otherwise than by an account payee cheque or account payee bank draft if,- (a) the amount of such loan or deposit or the aggregate amount of such loan and deposit; or (b) on the date of taking or accepting such loan, or deposit, any loan or deposit 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....
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....of the Act, is liable to be penalized by imposing a penalty (equal to the amount of the loan/deposit taken or accepted by the assessee in cash). It is, therefore, the submission of the learned counsel for the appellant-Revenue that it was not open to the Income-tax Appellate Tribunal to set aside the penalty imposed on the respondent-assessee under section 271D of the Act for the violation of section 269SS of the Act. 6. The facts noticed hereinabove are relevant for Income-tax Appeal No. 777 of 2008. 7. In so far as I. T. A. No. 778 of 2008 is concerned, it pertains to penalty imposed on the respondent-assessee on the return of the aforesaid loans taken in cash. Undisputably, the alleged loans depicted hereinabove, were returned by way of cash. On this occasion, the appellant-Revenue arrived at the conclusion that the respondent-assessee had violated the mandatory provisions of section 269T of the Act. Section 269T of the Act is being extracted hereunder: "269T. No branch of a banking company or a co-operative bank and no other company or co-operative society and no firm or other person shall repay any loan or deposit made with it otherwise than by an account payee cheque or ac....
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....erson repays any loan or deposit referred to in section 269T otherwise than in accordance with the provisions of that section, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit so paid. (2) Any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner." 9. On the same analogy as has been noticed in section 271D of the Act, it is the contention of the learned counsel for the appellant-Revenue that the action of the respondent-assessee in returning loans (the aggregate of which was, more than Rs. 20,000) by way of cash, has the effect of mandatory penal action. Inasmuch as the assessee is required to pay by way of penalty a sum equal to the amount of loan repaid in cash. 10. For violating the mandate of section 269SS of the Act, according to the learned counsel for the appellant-Revenue, a penalty was imposed on the respondent-assessee under section 271D of the Act, likewise, for violating the mandate of section 269T of the Act, a penalty was imposed on the respondent-assessee under section 271E of the Act by the Assessing Officer. 11. In the appellate proceedings initiated at the hands of the respondent-assess....
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....ondent-assessee. We are satisfied that section 273B of the Act envisages a non-obstante clause as against sections 271D and 271E of the Act (which have been sought to be invoked for penalising the respondent assessee). In the exceptional situation envisaged in section 273B of the Act, it is permissible for an assessee to substantiate "reasonable cause" for his failure to comply with the provisions on the basis whereof, penalty is sought to be imposed upon him. Taken to the logical conclusion in so far as the present controversy is concerned, it is open to the respondent-assessee, in the present case, to establish a reasonable cause for having not complied with the provisions of section 269SS of the Act (in the case of I. T. A. No. 777 of 2008) and section 269T of the Act (in the case of I. T. A. No. 778 of 2008). If an assessee successfully discharges the aforesaid obligations, then it is open to him to raise a claim that he should be excused from the consequential penal effect. 14. The explanation tendered by the respondent-assessee which has been taken into consideration by the Income-tax Appellate Tribunal was that the action of the respondent-assessee was bona fide and not aim....
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....belief, which cannot be illustrated through cogent evidence. It is, therefore, the submission of the learned counsel for the appellant-Revenue, that in the facts and circumstances of the present case, the respondent-assessee, could not be deemed to have established a reasonable cause for not abiding by the provisions of sections 269SS and 269T of the Act. 16. Having given our thoughtful consideration to the submissions advanced by the learned counsel for the rival parties, we are of the view that the finding that there was reasonable cause shown by the respondent-assessee, is a finding of fact. This emerges from the decision rendered by this court in Saini Medical Store's case [2005] 277 ITR 420, wherein, this court has, inter alia, held as under (page 425): "As pointed out earlier, there is no doubt about the genuineness of the transactions which have been fully accepted in the assessment made for the year under consideration. Even if, there is any ignorance, which resulted in the infraction of law, the default is technical and venial which did not prejudice the interests of the Revenue as no tax avoidance or tax evasion was involved. To my mind, bona fide belief coupled with th....