TaxTMI 
TaxTMI 
2026 (2) TMI 931
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....d 271E of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') relating to the same Assessment Year 2011-12. 2. Brief facts of the case is that the assessee is an individual and a widow survived with two sons after the death of her husband and holding certain agricultural lands. For the Asst. Year 2011-12, the assessee has not filed the Return of Income. Whereas information received from the department, assessee made cash deposit in three of her bank accounts with Allahabad Bank, Bank of Baroda and State Bank of India aggretating to Rs. 11,58,000/- between 01-09-2010 to 02-11-2010. Since assessee has not filed the Return of Income, the return was reopened by issuing a notice u/s. 148 of the Act on 27-03- 2018. 2.1. In respo....
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.... that all the amounts were taken from Farmers and friends and provided their affidavit. Further explained that they are farmers and have income from agricultural source and for the purpose of bank loan to be availed by the assessee's son higher education at Australia. However Ld. JCIT not satisfied with the above reply thereby imposed penalty of Rs. 16,70,000/- of each u/s. 271D and u/s. 271E of the Act respectively. 4. Aggrieved against the same, the assessee filed an appeal before Ld. CIT(A) who has confirmed the levy of penalties by observing as follows: "6.5 The appellant has not submitted any reasonable explanation for the above cash loans. Even if the reason for accepting cash loans provided by the appellant is accepted th....
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....hearing be given to the assessee before imposing penalty on the above provisions. Moreover the assessing officer being an ITO has no authority to issue notice u/s. 271D & 271E of the Act. Therefore the ITO informed about the cash loans transaction to the JCIT and he in turn given the opportunity of hearing to the assessee by issuing a show cause notice dated 04-07-2019 which has also replied by the assessee. Thus the argument of the assessee Counsel is hereby rejected. 7. Further it is seen from the assessment order the explanation offered by the assessee as follows: "With reference to above, further with reference to our earlier submission and based on personal hearing held with your good self and further in connection with dep....
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....n connection with deposition of Rs. 1.58 lacs in the account of Bank of Baroda on 01 of September, 2010, we would like to submit to your goodself that assessee is a farmer and being a farmer assessee was eligible for loan at concessional rate as per State Governments scheme for farmers. Under the scheme, every farmer based on their land holdings was to receive funds as per government's criterion which are to be repaid within next 365 days and once the loan is repaid the person becomes eligible for obtaining loan other time. In case of assessee, assessee paid back the loan of Rs. 1.61 lacs (cash withdrawn from Bank of India on 27 August, 2018 towards the same) received by her on 01 of September, 2010 and since the loan was paid assessee ....
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.... the meaning of Section 273B of the Act. 7.2 Their Lordships of the Supreme Court in the case of Assistant Director of Inspection v. Kum. A.B. Shanthi (2002) 122 Taxman 574/255 ITR 258 (SC) while upholding the constitutional validity of Sections 269SS and 271D of the Act held that notwithstanding anything contained in the provisions of Section 271D. no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provision, if he proves that there was reasonable cause for such failure and if the assessee proves that there was reasonable cause for failure to take a loan otherwise than by account payee cheque or account payee demand draft, then the penalty may not be levied. Their Lor....
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....asonable cause' has not been defined in the Act. Therefore, in the context of the penalty provisions, the words 'reasonable cause' would mean a cause which is beyond the control of the assessee 'Reasonable cause' obviously means a cause which prevents a reasonable man of ordinary prudence acting under normal circumstances, without negligence or inaction or want of bona fides. 7.4. The Delhi High Court in the matter of Azadi Bachao Andolan v. Union of India [2001] 116 Taxman 249/252 ITR 471 (Delhi) defined the words 'reasonable cause as under:- "6... Reasonable cause, as applied to human action is that which would constrain a person of average intelligence and ordinary prudence. The expression "reasonable"....