TaxTMI 
TaxTMI 
2024 (10) TMI 748
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....it ought to have been held that penalty is not validly levied as the appellant was prevented by a reasonable cause in terms of section 273B of the Act. 4. The appellant craves leave to add, alter, amend any ground of appeal." 3. At the outset, we observe that the appeal is time barred by 30 days. The assessee filed an Affidavit for condonation of delay vide Affidavit dated 03.05.2024, wherein the assessee stated that the order of NFAC was served on her husband's email address [email protected] and no physical order was served to the assessee. The assessee's wife was not conversant with the income tax matters and she does not operate computer. In the last week of April, 2024 the son of the assessee operated the mail id of her late husband and he found out about this order. There was an inadvertent delay in consult with the Advocate of the assessee, as a result of which there was a delay of 30 days in filing of the present appeal. The Counsel for the assessee submitted that there was no mala fide in delaying the filing of the appeal and hence the same may be kindly condoned. 4. Looking into the instant facts and the reasons cited by the assessee for the delay of 30 days in the ....
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....he circumstances warranted a penalty under Section 271D, and held that the appellant's acceptance of the gold loan without a reasonable cause constituted a violation of the provisions outlined in section 269SS of the Act. While passing the order, the Assessing Officer made the following observations: "8. The assessee's contention has been considered but not found acceptable. The assessee has failed to submit any proof as to what was the necessity of the business which warranted acceptance of loans / deposits in the form of gold in violation of section 269SS of the Act. The case laws on which the assessee relied upon is not applicable to the facts of the present case. Further, it is not the case of assessee that the loans / deposits were accepted from such persons who did not have any bank account. Even other-wise also non-maintenance of bank account cannot be considered as reasonable cause for accepting deposits in violation of section 269SS other-wise the entire purpose of bringing the provision of section 269SS on the statute will be defeated. 9. In view of the above facts and the document/details available as per records, it shows that "As per agreement dated 12/07/2....
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....Section 269SS of the Income Tax Act. The second issue raised by the assessee was around the interpretation of the term "money" in the context of Section 269SS of the Act. The assessee submitted before Ld. CIT(Appeals) that the physical gold accepted as a loan does not qualify as "money" and relied on the judgment from the Allahabad High Court, which held that bullion and metal should not be included in the legal or popular definitions of "money". After thorough deliberation, Ld. CIT(Appeals) held that the assessee has not successfully substantiated his claims regarding the necessity of accepting loans in physical gold. Ld. CIT(Appeals) observed that the JCIT concluded that the appellant failed to provide adequate proof of business necessity justifying the acceptance of loans in a manner contrary to the methods specified in Section 269SS of the Act, which prohibits the acceptance of loans exceeding Rs. 20,000 in any form other than through an account payee cheque, bank draft, or specified electronic means. Ld. CIT(Appeals) held that the assessee's submission that gold metal in physical form does not constitute "money" conflicts with his own position that he accepted this gold as....
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....that the appellant had taken gold in physical form as it was his first year of business of gold jewellery - retail and wholesale As stated above the provision of Section 269SS does not include the mode of carrying out such transactions on the form of any precious metal in physical form. Thus, I concur with the view of the JCIT in holding that there was no reasonable cause for accepting the loans from a third party in the mode and manner not specified in Section 269SS of the Act. I also concur with the view of the JCIT that the appellant had tailed to submit any evidence regarding the necessity of the business which warranted acceptance of loans in the form of gold metal in physical form, i.e. otherwise than by way of a mode prescribed specifically in Section 269SS of the Act. I also concur with the view of the JCIT in not accepting the Explanation (i) to Section 269SS of the Act, which is raised as a plea by the appellant that the gold metal accepted as a loan by the appellant does not fall within the meaning of 'money" and hence it does not attract the provision of Section 269SS of the Act. Whether gold metal or any other precious metal or any other valuable item falls within ....
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....IT of levying the penalty of Rs. 1,30,63,574/- u/s. 271D of the Act for violating the provision of Section 269SS of the Act by way of accepting the loans by way of gold metal in physical form. Thus, the grounds of appeal raised in the Memo of Appeal stand dismissed. 6. Thus, to conclude, the appeal stands dismissed." 7. The assessee is in appeal before us against the aforesaid order passed by the CIT(A) dismissing the appeal of the assessee. 8. Before us, the Counsel for the assessee took several arguments in support of the contention that this is not a fit case for levy of penalty, looking into the language of Section 269SS of the Act and the facts of the assessee's case. The Counsel for the assessee submitted that Explanation (iii) to Section 269SS of the Act stated that "loan or deposit" means loan or deposit of "money". Therefore, looking into the definition of loan and deposit, it is evident that the loan or deposit has to be only a loan taken in the form of "money" and the "Gold" loan taken by the assessee falls outside the purview of Section 269SS of the Act, in the first instance. Therefore, since the assessee has taken loan of Gold metal and not money, and since the pr....
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....ssessee returned the Gold metal to Mr. Kaushik Mandaliya on 07.10.2013. The Counsel for the assessee submitted that as per the provisions of Section 271D penalty could not be imposed in case of reasonable cause having been adduced by the assessee. In the instant case, the assessee has been able to give adequate documentary evidences as well as reasonable cause, so as to fall outside the purview of provisions of Section 271D of the Act. 9. In response, the Ld. D.R. placed reliance on the observations made by the Assessing Officer and the Ld. CIT(A) in their respective orders. 10. We have heard the rival contentions and perused the material on record. 11. In view of the arguments placed on record before us and the arguments of the Counsel for the assessee which have been reproduced in the precedent part of the judgment, we are of the considered view that this is not a fit for levy of penalty under Section 271D of the Act. This is for the reason that from the facts produced before us, it is evident that there was no intention on part of the assessee to evade payment of taxes or to bring any unaccounted cash outside the books of accounts. The assessee had started a new jewellery bus....