DCIT, Bangalore V. M/s VSL Steels Ltd.,

ITA 1108/BANG/2016

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 4788 (ITAT-BANGALORE)
• Duration Of Justice: 2 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 24-07-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 30-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PADMA MEENAKSHI
• Assessee Lawyers: RAMASUBRAMANIAN
• Keywords: Search and seizure; Question of law; Reasonable cause
• Section: 273B; 27; 6; 12; 10; 2; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH B BEFORE S HRI N.V. VASUDEVAN , JUDICIAL MEMBER AND SHRI INTURI RAMA RAO , ACCOUNTANT MEMBER I.T . A. NO S . 1108 & 1109 /BANG/20 16 (ASSESSMENT YEAR : 20 07 - 08 ) DY. COMMISSIONER OF INCOME TAX, CIRCLE 7 (1)(2), BANGALORE. . APPELLANT. VS. M/S. VSL STEELS LIMITED, (EARLIER KNOWN AS M/S. SLR STEELS LTD.) PARAMENAHALLY VILLAE, HIRIYUR TALUK, CHITRADURGA DISTRICT, KARNATAKA - 572 143 .. RESPONDENT. APPELLANT BY : SMT. PADMA MEENAKSHI, JCIT (D.R) R E SPONDENT BY : SHRI RAMASUBRAMANIAN , C.A. DATE OF H EARING : 16.05.2018. DATE OF P RONOUNCEMENT : 31 .05 .201 8 . O R D E R PER SHRI INTURI RAMA RAO , A .M . : TH E S E APPEAL S FILED BY THE REVENUE ARE DIRECTED AGAINST THE ORDERS OF COMMISSIONER OF INCOME TAX (APPEALS), GULBARGA DT.12.02.2016 FOR THE ASSESSMENT YEAR 20 07 - 08 IN DELETING THE PENALTY LEVIED UNDER SECTIONS 271D & 271E OF THE INCOME TAX ACT, 1961 (IN SHORT 'THE ACT'). 2 IT A NO S . 1108 & 1109 /BANG/201 8 2. THE REVENUE RAISED THE FOLLOWING GROUNDS OF APPEAL : ITA NO.1108/BANG/2016 ITA NO.1109/BANG/2016 3 IT A NO S . 1108 & 1109 /BANG/201 8 3. BRI EF FACTS OF THE CASE ARE AS UNDER : THE RESPONDENT - ASSESSEE IS A COMPANY INCORPORATED UNDER THE PROVISIONS OF COMPANIES ACT, 1956. IT IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF STEEL. IT IS STATED THAT THERE WAS A CHANGE IN THE MANAGEMENT OF THE COMPANY IN THE MONTH OF FEB./MAR. 2006. IT IS STATED THAT AT THE TIME OF CHANGE OF MANAGEMENT, THE ASSESSEE WAS IN THE PROCESS OF SETTING UP OF A PLANT FOR MANUFACTURING OF STEEL AND THE EXPENSES INCURRED BY THE ASSESSEE COMPANY WERE MET BORROWING S F ROM ITS DIRECTOR MR.VINAY LAD. THE ASSESSEE COMPANY WAS NOT IN A POSITION TO OPERATE EARLIER BANK ACCOUNT FOLLOWING THE CHANGE OF MANAGEMENT. IT IS FURTHER STATED THAT THE MONEY RECEIVED FROM THE SAID DIRECTOR WAS RECEIVED BY BEARER CHEQUE DRAWN ON HIS B ANK ACCOUNT AND REPAID THE MONEY WHEN CASH IS AVAILABLE BY THE ASSESSEE COMPANY. THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS FOR VIOLATION OF PROVISIONS OF SECTIONS 269SS AND 269T OF THE ACT. IN RESPONSE TO THE SHOW CAUSE 4 IT A NO S . 1108 & 1109 /BANG/201 8 NOTICE, THE ASSESSEE HAS FILED AN EXPLANATION VIDE LETTER DT.15.9.2011 STATING THAT THE MONEY WAS BORROWED IN EMERGENCY FROM THE DIRECTOR OF THE COMPANY NAMELY SRI VINAY LAD TO MEET THE DAY TO DAY EXPENSES OF THE COMPANY AS THE COMPANY WAS NOT IN A POSITION TO OPERATE THE BAN K ACCOUNT FOLLOWING CHANGE OF MANAGEMENT. THE ASSESSING OFFICER PASSED AN ORDER DT . 22.9.2011 REJECTING THE EXPLANATION OF THE ASSESSEE AND PROCEEDED TO LEVY THE PENALTY SATING THAT THE EXPLANATION OF THE ASSESSEE CANNOT BE ACCEPTED AS THERE WAS NO EXPLANA TION AS TO WHY THE REPAYMENT OF LOAN WAS MADE IN CASH AND LEVIED A PENALTY OF RS.39,72,109 UNDER THE PROVISIONS OF SECTION 271D OF THE ACT. BEING AGGRIEVED , THE ASSESSEE PREFERRED AN APPEAL BEFORE THE CIT (APPEALS) , WHO VIDE IMPUGNED ORDER DELETED THE PEN ALTY BY HOLDING THAT THE GENUINENESS OF THE TRANSACTION IS NOT DOUBTED AND THE EXPLANATION TENDERED BY THE ASSESSEE WA S FOUND TO BE BONA FIDE, REASONABLE AND ALSO HELD THAT THE TRANSACTION WAS IN THE NATURE OF CURRENT ACCOUNT WHICH DOES NOT CONSTITUTE A LO AN AND THEREFORE THE PROVISIONS OF SECTION 269SS WAS NOT APPLICABLE. BEING AGGRIEVED, T HE REVENUE IS IN APPEAL BEFORE US CHALLENGING THE IMPUGNED ORDER OF THE CIT (APPEALS). 5 IT A NO S . 1108 & 1109 /BANG/201 8 4. SIMILARLY, THE ASSESSING OFFICER LEVIED RS.25,80,223 UNDER SECTION 271E OF THE ACT & VIOLATION OF PROVISIONS OF SECTION 269T OF THE ACT. BEING AGGRIEVED, THE ASSESSEE PREFERRED APPEAL BEFORE THE CIT (APPEALS). THE CIT (APPEALS) DELETED THE PENALTY LEVIED. THE REVENUE IS IN APPEAL CHALLENGING THE DELETION OF PENALTY BY THE CIT (APPEALS) UNDER SECTION 271E OF THE ACT OF RS.25,80,223. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE CONTENDED THAT THE CIT (APPEALS) GRANTED RELIEF WITHOUT EXAMINING THE TRUE NATURE OF THE TRANSACTION BETWEEN THE ASSESSEE AND DIRECTOR OF THE CO MPANY . T HE PROVISIONS OF SECTION 269SS SHOULD BE CONSTRUED STRICTLY . I N A CASE WHERE THERE IS A RECEIPT OF MONEY AS WELL AS REPAYMENT OF MONEY BETWEEN THE SISTER CONCERNS IT CAN BE TREATED AS AN ADVANCE. 6. ON THE OTHER HAND, THE LEARNED AUTHORIS ED REPRESENTATIVE VEHEMENTLY CONTENDED THAT THE NATURE OF TRANSACTION BETWEEN THE ASSESSEE AND DIRECTOR OF THE COMPANY ARE IN THE NATURE OF CURRENT ACCOUNT. IN THIS CONNECTION, HE DREW OUR ATTENTION TO THE COPY OF CURRENT ACCOUNT OF THE DIRECTOR PLACED AT PAGE NOS.12 TO 15 OF PAPER BOOK. HE FURTHER SUBMITTED THAT MONEY BORROWED FROM THE DIRECTOR WAS UTILIZED 6 IT A NO S . 1108 & 1109 /BANG/201 8 ONLY FOR THE PURPOSE OF MEETING THE DAY TO DAY EXPENSES OF THE COMPANY AS THE COMPANY WAS NOT IN A POSITION TO OPERATE THE BANKING FACILITIES FOLLOWI NG THE CHANGE IN THE MANAGEMENT. HE FURTHER SUBMITTED THAT THE DIRECTOR HAD GIVEN LOAN TO THE COMPANY BY WAY OF THE BEARER CHEQUE. THUS THE SOURCE OF THE MONEY WAS CLEARLY ESTABLISHED AND THE GENUINENESS OF THE TRANSACTION IS BEYOND DOUBT. IN SUCH CIRC UMSTANCES, IT IS ONLY TECHNICAL BREACH OF PROVISION OF LAW WHICH DOES NOT WARRANT THE LEVY OF PENALTY. IN THIS CONNECTION HE HAD PLACED RELIANCE ON THE DECISIONS OF CIT VS. SMT. DIMPAL YADAV 379 ITR 177 (ALL) AND CIT VS. BHAGWATI PRASAD BAJORIA (HUF) 2 63 ITR 487 (GAU) . HE FURTHER SUBMITTED THAT HAVING REGARD TO THE NATURE OF TRANS A CT I ON BETWEEN THE ASSESSEE AND ITS DIRECTOR CANNOT BE TERMED AS A LOAN AS NO AMOUNT WAS BORROWED FOR A FIXED PERIOD HAVING ANY INTEREST ELEMENT. IT IS IN THE INTEREST OF COM PANY CURRENT ACCOUNT AND THEREFORE THE PROVISIONS OF SECTION 269SS OR 269T HAVE NO APPLICATION. IN THIS CONNECTION, HE PLACED RELIANCE ON THE CO - ORDINATE BENCH OF THE TRIBUNAL IN THE CASE OF KARNATAKA GINNING & PRESSING FACTORY VS. JCIT 77 ITD 478 (MU M - TRIBUNAL) . 7 IT A NO S . 1108 & 1109 /BANG/201 8 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. IN THIS CASE, THE ONLY ISSUE IS WHETHER THE PENALTY UNDER SECTION 271D IS LEVIABLE FOR ALLEGED CONTRAVENTION OF THE PROVISIONS OF SECTION 269SS OF THE ACT. THE PROVISIONS OF SECTION 269SS PROVIDES THAT NO ASSESSEE SHALL ACCEPT FROM ANY OTHER PERSON IN LOAN OR DEPOSIT FOR A SUM EXCEEDING RS.20,000 OTHERWISE THAN BY ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT OR USE OF ECS THROUGH A BANK ACCOUNT AND PROVI SIONS OF SECTION 271D OF THE ACT PROVIDES THAT ANY PERSON WHO CONTRAVENE THE PROVISIONS OF SECTION 269SS WOULD BE LIABLE TO PAY PENALTY A SUM EQUAL TO A SUM OF AMOUNT OF LOAN OR DEPOSIT SO TAKEN. HOWEVER THE PROVISIONS OF SECTION 273B PROVIDES THAT NO PEN ALTY SHALL BE LEVIABLE UNDER THE PROVISIONS OF SECTION 271D IF THE ASSESSEE PROVES REASONABLE CAUSE IN ACCEPTING THE LOAN OR DEPOSIT IN CASH. IN THE PRESENT CASE THERE WAS NO DISPUTE AS TO THE RECEIPT OF THE AMOUNT BY THE ASSESSEE FROM ITS DIRECTOR IN CA SH BUT THE NATURE OF THE TRANSACTION WAS DISPUTED BY THE ASSESSEE COMPANY. THE STAND OF THE ASSESSEE COMPANY IS THAT THE ASSESSEE COMPANY RECEIVED THE AMOUNT FROM DIRECTOR IN ORDER TO MEET THE DAY TO DAY EXPENSES AS IT WAS NOT IN A POSITION TO OPERATING THE BANKING FACILITIES 8 IT A NO S . 1108 & 1109 /BANG/201 8 ON ACCOUNT OF FOLLOWING A CHANGE IN THE MANAGEMENT OF THE ASSESSEE COMPANY. THUS ACCORDING TO THE ASSESSEE COMPANY THE IMPUGNED TRANSACTION IS NOT IN THE NATURE OF A LOAN OR A DEPOSIT, THEREFORE THE RE IS NO VIOLATION OF PROVISIONS OF SECTI O N 269SS , BUT IN THE NATURE OF TEMPORARY ADVANCES TO WHICH PROVISIONS OF SECTION 269SS HAVE NO APPLICATION. EVEN WITHOUT PREJUDICE THIS ARGUMENT, IT WAS SUBMITTED THAT THE ASSESSEE COMPANY WAS CONSTRAINED TO BORROW MONEY ON BUSINESS EXIGENCIES AS THE ASSESSEE COMPANY WAS NOT IN A POSITION TO OPERATE THE BANK ACCOUNT AND THIS CONSTITUTE A REASONABLE CAUSE FOR ACCEPTING THE AMOUNT IN CASH AND THEREFORE NO PENALTY CAN BE LEVIED. A MERE PERUSAL OF THE ORDER OF THE PENALTY, IT IS CLEAR THAT THE ASSESS ING OFFICER HAD ACCEPTED THE CONTENTION THAT THE AMOUNTS WERE BORROWED , OUT OF BUSINESS EXIGENCIES AND THERE IS NO DOUBT ON THE GENUINENESS OF THE TRANSACTIONS. UNDER THESE CIRCUMSTANCES, THE PROVISIONS OF SECTION 271D ARE NOT ATTRACTED IN THE LIGHT OF TH E CBDT CIRCULAR CITED SUPRA. RELIANCE IN THIS REGARD CAN BE PLACED ON THE FOLLOWING DECISIONS : - I. CIT VS. BHAGWATI PRASAD BAJORIA (HUF) 263 ITR 487 (GAU) 9 IT A NO S . 1108 & 1109 /BANG/201 8 II. CHAMUNDI GRANITES P. LTD. VS. DCIT / ASST. DIRECTOR OF INSPECTION VS. KUM. A.B. SHANTHI 255 ITR258 III. M JANARDHANA RAO VS. JCIT 273 ITR 50 (SC) 8. THE DECISION IN THE CASE OF CIT VS. SMT. DIMPAL YADAV 379 ITR 177 (ALL) AFTER REFERRING THESE JUDGMENTS HELD AS FOLLOWS : 10. THE OBJECT OF INTRODUCING SECTION 269SS OF THE ACT WAS TO ENSURE THAT A TAX PAYER WAS NOT ALLOWED TO GIVE FALSE EXPLANATION FOR HIS UNACCOUNTED MONEY OR IF THE TAX PAYER MADE SOME FALSE ENTRIES, HE WOULD NOT ESCAPE BY GIVING FALSE EXPLANATION FOR THE SAME. IT WAS FOUND THAT DURING THE SEARCH AND SEIZURE, UNACCOUNTED MONEY WAS FOUND AND THE TAX PAYER USUALLY GAVE AN EXPLANATION THAT HE HAD BORROWED OR RECEIVED DEPOSITS FROM HIS RELATIVES OR FRIENDS AND, CONSEQUENTLY, IT BECAME EASY FOR THE SO CALLED LENDER TO MANIPULATE HIS RECORD TO SUIT THE PLEA OF THE TAX PAYER. IN ORDER TO CURB THIS M ENACE, SECTION 269SS OF THE ACT WAS INTRODUCED TO DO AWAY WITH THE MENACE OF MAKING FALSE ENTRIES IN THE ACCOUNT BOOKS AND LATER GIVE AN EXPLANATION FOR THE SAME. SECTION 269SS OF THE ACT CONSEQUENTLY, REQUIRED THAT NO PERSON SHALL TAKE OR ACCEPT ANY LOAN OR DEPOSIT, IF IT EXCEEDS MORE THAN RS.20,000/ - IN CASH. SECTION 271D OF THE ACT PROVIDED THAT A PERSON WHO TAKES OR ACCEPTS ANY LOAN OR DEPOSIT IN CONTRAVENTION OF THE PROVISION OF SECTION 269SS OF THE ACT, HE WOULD BE LIABLE TO PAY BY WAY OF PENALTY A SU M EQUAL TO THE AMOUNT OF THE LOAN OR DEPOSIT SO TAKEN OR ACCEPTED. SECTION 271D OF THE ACT CAUSED UNDUE HARDSHIP TO THE TAX PAYERS WHERE THEY TOOK A LOAN OR DEPOSIT IN CASH EXCEEDING RS.20,000/ - EVEN WHERE THERE WAS A GENUINE OR BONAFIDE TRANSACTION. THE L EGISLATURE ACCORDINGLY, INTRODUCED SECTION 273B OF THE ACT, WHICH PROVIDED THAT IF THERE WAS A GENUINE AND BONAFIDE TRANSACTION AND THE TAX PAYER COULD NOT GET A LOAN OR DEPOSIT BY AN ACCOUNT PAYEE CHEQUE OR DEMAND TRANSACTION FOR SOME BONAFIDE REASON, THE AUTHORITY VESTED WITH THE POWER TO IMPOSE PENALTY HAD A DISCRETION NOT TO LEVY THE PENALTY. 11. IN CHAMUNDI GRANITES (SUPRA) THE SUPREME COURT CONSIDERED THE PROVISION OF SECTION 271D AND 273B OF THE ACT AND HELD: - IT IS IMPORTANT TO NOTE THAT ANOTHER PR OVISION, NAMELY SECTION 273B WAS ALSO INCORPORATED WHICH PROVIDES 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 IS HE PROVES THAT THERE WAS 10 IT A NO S . 1108 & 1109 /BANG/201 8 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 N OT BE LEVIED. THEREFORE, UNDUE HARDSHIP IS VERY MUCH MITIGATED BY THE INCLUSION OF SECTION 273B IN THE ACT. IF THERE WAS A GENUINE AND BONA FIDE TRANSACTION AND IF FOR ANY REASON THE TAXPAYER COULD NOT GET A LOAN OR DEPOSIT BY ACCOUNT - PAYEE CHEQUE OR DEMA ND DRAFT FOR SOME BONA FIDE REASONS, THE AUTHORITY VESTED WITH THE POWER TO IMPOSE PENALTY HAS GOT DISCRETIONARY POWER. 12. IN BHAGWATI PRASAD BAJORIA'S (SUPRA) THE GAUHATI HIGH COURT HELD: ....... THE TRANSACTION OF LOAN HAS FOUND PLACE IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AS WELL AS THE LENDER OF THE LOAN. NONE OF THE AUTHORITIES HAVE REACHED THE CONCLUSION THAT THE TRANSACTION OF THE LOAN WAS NOT GENUINE AND IT WAS A SHAM TRANSACTION TO COVER UP THE UNACCOUNTED MONEY. IT APPEARS TO US THAT THE ASSES SEE FELT NEED OF MONEY AND THUS HE APPROACHED THE MONEY - LENDER FOR ADVANCEMENT OF THE MONEY, THE TRANSACTION IS REFLECTED IN THE PROMISSORY NOTES EXECUTED BY THE ASSESSEE IN FAVOUR OF THE LENDER. WHEN THERE IS AN IMMEDIATE NEED OF MONEY THE PERSON CANNOT G ET SUCH MONEY FROM THE NATIONALISED BANK TO SATISFY THE IMMEDIATE REQUIREMENT..... 13. IN THE INSTANT CASE, WE FIND THAT THE TRIBUNAL HAS GIVEN A CATEGORICAL FINDING THAT THE ASSESSEE HAD ESTABLISHED A REASONABLE CAUSE FOR FAILURE TO COMPLY WITH THE PROVI SION OF SECTION 269SS OF THE ACT. THE TRIBUNAL FURTHER FOUND THAT THE LOAN GIVEN BY THE SAMAJWADI PARTY WAS A GENUINE LOAN, WHICH WAS REFLECTED IN THE BOOKS OF ACCOUNTS ON ACCOUNT OF THE SAMAJWADI PARTY AS WELL AS IN THE BOOKS OF ACCOUNT OF THE ASSESSEE AN D THAT THE CASH GIVEN BY THE PARTY WAS DEPOSITED IN THE BANK OF THE ASSESSEE AND, THEREAFTER, USED FOR THE PURPOSE OF CONVERTING THE NAZUL LAND INTO FREE HOLD. THE TRIBUNAL FOUND THAT THE GENUINENESS OF THE TRANSACTION WAS ALSO NOT DISPUTED BY THE ASSESSIN G OFFICER. 14. IN THE LIGHT OF THE AFORESAID, WE FIND THAT EVEN THOUGH THE ASSESSEE HAD TAKEN A LOAN IN CASH, NONETHELESS, THE LOAN TRANSACTION WAS A GENUINE TRANSACTION AND WAS ROUTED THROUGH THE BANK ACCOUNT OF THE ASSESSEE WHICH CLEARLY SHOWS THE BONAFI DES OF THE ASSESSEE. THE CASH GIVEN BY THE LENDER WAS NOT UNACCOUNTED MONEY BUT WAS DULY REFLECTED IN THEIR BOOKS OF ACCOUNT. THE ASSESSING OFFICER ALSO ACCEPTED THE EXPLANATION AND FOUND THE TRANSACTION TO BE GENUINE. THE CONTENTION OF THE LEARNED COUNSEL FOR THE APPELLANT THAT SINCE THERE WAS NO URGENCY, THE ASSESSEE COULD HAVE TAKEN THE LOAN THROUGH CHEQUE AND SHOULD HAVE PROCESSED THE MATTER THROUGH REGULAR BANKING CHANNELS IS IMMATERIAL, INASMUCH AS THE GENUINENESS OF THE TRANSACTION HAS NOT BEEN DISPU TED BY THE ASSESSING OFFICER. FURTHER, WE FIND THAT THE CASH WAS DEPOSITED IN THE BANK ACCOUNT OF THE ASSESSEE AND THE MONEY WAS THEREAFTER, ROUTED THROUGH THE BANKING CHANNEL FOR PAYMENT TO THE GOVERNMENT FOR CONVERTING THE LAND INTO FREE HOLD PROPERTY. 11 IT A NO S . 1108 & 1109 /BANG/201 8 1 5. IN THE LIGHT OF THE AFORESAID, WE ARE OF THE VIEW THAT REASONABLE CAUSE HAD BEEN SHOWN BY THE ASSESSEE AND THE PROVISIONS OF SECTION 273B OF THE ACT WAS APPLICABLE. THE APPELLATE AUTHORITIES WERE JUSTIFIED IN HOLDING THAT NO PENALTY COULD BE IMPOSED SIN CE A REASONABLE CAUSE WAS SHOWN BY THE ASSESSEE. 16. IN VIEW OF THE AFORESAID, WE ARE OF THE OPINION THAT NO SUBSTANTIAL QUESTION OF LAW ARISES FOR CONSIDERATION. BOTH THE APPEALS FAIL AND ARE DISMISSED. T HE RATIO OF THE ABOVE DECISION , IS SQUARELY APPL ICABLE TO THE FACTS AND CIRCUMSTANCES OF PRESENT CASE AND WE HOLD THAT SINCE THE GENUINENESS OF THE TRANSACTION IS NOT IN DOUBT AND THE SOURCE OF MONEY GIVEN BY THE DEPOSIT OR IS KNOWN AND THE PENALTY UNDER SECTION 271D CANNOT BE LEVIED. WE CONSIDER IT UN NECESSARY TO DWELL UPON OTHER ARGUMENT S ADVANCED, AS WE HELD THAT PENALTY IS NOT LEVIABLE UNDER SECTION 271D AS THE GENUINENESS OF THE TRANSACTION IS ESTABLISHED. 9 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE IN ITA 1109/BANG/2016 IS DISMISSED. 10 . SIMILARLY, IN RESPECT OF THE LEVY OF PENALTY UNDER SECTION 271E OF THE ACT, IN VIEW OF THE FACT THAT THE ASSESSEE WAS NOT IN A POSITION TO OPERATE BANK OPERATIONS, THIS WOULD CONSTITUTE A REASONABLE CAUSE WITHIN THE MEANING OF SECTION 27 3B OF THE ACT FOR REPAYMENT OF THE LOAN IN CASH 12 IT A NO S . 1108 & 1109 /BANG/201 8 AND THEREFORE PENALTY IS NOT LEVIABLE UNDER SECTION 271E OF THE ACT. THUS THE APPEAL FILED BY THE REVENUE IS DISMISSED. 1 1 . IN THE RESULT, BOTH THE APPEALS OF REVENUE ARE DISMISSED. ORDER PRONOUNCED I N THE OPEN COURT ON THE 31ST DAY OF MAY, 201 8 . SD/ - (N.V. VASUDEVAN) JUDICIAL MEMBER SD/ - ( INTURI RAMA RAO ) ACCOUNTANT MEMBER BANGALORE, DT. 31 .05.2018. *REDDY GP COPY TO : 1 APPELLANT 4 CIT(A) 2 RESPONDENT 5 DR. ITAT, BANGALORE 3 CIT 6 GUAR D FILE SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL BANGALORE.