JCIT, V. Sadashiv Kaigarika Tarbeti Shikshan Samsthe,

ITA 196/BANG/2014

• Counselvise Citation: 19621114 RSA 2014
• Duration Of Justice: 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 07-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR P K SRIHARI
• Keywords: Source of fund; Additional evidence; Reasonable cause
• Section: 273B; 133A; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE , ACCOUNTANT MEMBER ITA NOS. A.Y. APPELLANT VS. RESPONDENT 196/BANG/2014 2005-06 197/BANG/2014 2006-07 198/BANG/2014 2007-08 199/BANG/2014 2007-08 200/BANG/2014 2008-09 201/BANG/2014 2009-10 202/BANG/2014 2010-11 JT. COMMISSIONER OF INCOME TAX, BIJAPUR RANGE, BIJAPUR. SADA SHIV KAIGARIKA TARHETI SHIKSHAN SAMSTHE, A & P: BALLUR. MUDHOL TQ. BAGALKOT DIST. PAN: AAAJS 4416J APPELLANT BY : DR. P.K. SRIHARI, ADDL. CIT (DR) RESPONDENT BY : SHRI V. SRIDHAR, C.A. DATE OF HEARING : 04.12.2014 DATE OF PRONOUNCEMENT : 22.01.2015 O R D E R PER BENCH THESE ARE APPEALS FILED BY THE REVENUE AGAINST THE ORDERS OF THE LD. CIT(APPEALS) DELETING PENALTIES LEVIED ON THE ASSES SEE FOR THE VARIOUS ASSESSMENT YEARS INVOLVED. 2. RELEVANT APPEAL NOS., ASSESSMENT YEARS, SECTION UNDER WHICH PENALTY WAS LEVIED, PENALTY AMOUNT AND SHORT REASO N FOR LEVY OF PENALTY ARE REPRODUCED IN THE CHART HEREUNDER:- ITA NOS.196 TO 202/BANG/2014 PAGE 2 OF 10 ITA NOS. A.Y. SECTION UNDER WHICH PENALTY LEVIED PENALTY AMOUNT NATURE 196/B/2014 2005-06 271D (VIOLATION OF 269SS) 6,50,000 ACCEPTING CASH LOAN FROM ONE SHRI ASHOK BHIMAPPA NAIK 197/B/2014 2006-07 271E (VIOLATION OF 269T) 3,50,000 198/B/2014 2007-08 271E (VIOLATION OF 269T) 6,75,000 REPAYING LOANS IN CASH TO SHRI ASHOK BHIMAPPA NAIK 199/B/2014 2007-08 271D (VIOLATION OF 269SS) 6,45,000 200/B/2014 2008-09 271D (VIOLATION OF 269SS) 5,00,000 201/B/2014 2009-10 271D (VIOLATION OF 269SS) 6,40,000 202/B/2014 2010-11 271D (VIOLATION OF 269SS) 11,83,000 ACCEPTING CASH LOAN FROM SHRI ASHOK BHIMAPPA NAIK 3. FACTS APROPOS ARE THAT ASSESSEE, A SOCIETY RUNNI NG EDUCATIONAL INSTITUTION FOR B.ED. & D.ED. COURSES WAS SUBJECT T O A SURVEY U/S. 133A OF THE INCOME-TAX ACT, 1961 [IN SHORT 'THE ACT'] ON 6. 10.2010. AT THE TIME OF SURVEY, IT WAS NOTED THAT ASSESSEE WAS NOT MAINTAIN ING PROPER BOOKS OF ACCOUNT. IT SEEMS THE PRINCIPAL OF THE INSTITUTION DEPOSED THAT PROPER BOOKS OF ACCOUNT WERE NOT BEING MAINTAINED. RECEIPT BOOKS , EXPENDITURE BILLS, ETC., FOUND AT THE PREMISES WERE IMPOUNDED BY THE D EPARTMENT DURING THE COURSE OF SURVEY. WHEN NOTICES U/S. 148 WERE ISSUE D FOR THESE YEARS, ASSESSEE REQUESTED THE AO TO PROVIDE COPIES OF IMPO UNDED DOCUMENTS INCLUDING REGISTERS AND RECEIPTS. THIS REQUEST WAS MADE BY THE ASSESSEE ON 24.3.2011. RETURNS FOR ALL THESE YEARS WERE FIL ED BY THE ASSESSEE ON ITA NOS.196 TO 202/BANG/2014 PAGE 3 OF 10 30.8.2011, PURSUANT TO SUCH NOTICES. IN THE INTER REGNUM, IT SEEMS ASSESSEE HAD PREPARED FINANCIAL STATEMENTS, WHICH W ERE ALL FILED ALONG WITH THE RETURNS. FROM THESE FINANCIAL STATEMENTS, AO N OTED THAT ASSESSEE HAD ACCEPTED CASH LOAN AGGREGATING TO RS.6,50,000, RS.6 ,45,000, RS.5 LAKHS, RS.6,40,000 AND RS.11,83,000 DURING PREVIOUS YEARS RELEVANT TO ASSESSMENT YEARS 2005-06, 2007-08, 2008-09, 2009-10 AND 2010-11 RESPECTIVELY. SIMILARLY, THERE WERE REPAYMENT OF L OANS IN CASH TO THE SAID ASHOK BHIMAPPA NAIK AGGREGATING TO RS.3,50,000 AND RS.6,75,000 DURING THE PREVIOUS YEARS RELEVANT TO A.YS. 2006-07 & 2007 -08. ASSESSEE WAS PUT ON NOTICE, AS TO WHY PENALTY U/S. 271D SHOULD N OT BE LEVIED FOR VIOLATION OF SECTION 269SS BY ACCEPTING LOANS IN CASH FOR A.Y S. 2005-06, 2007-08, 2008-09, 2009-10 AND 2010-11. SIMILAR NOTICES WERE ISSUED FOR VIOLATION OF SECTION 269T AND LEVY OF PENALTY U/S. 271E FOR A.YS . 2006-07 AND 2007-08. 4. REPLY OF THE ASSESSEE WAS THAT IT WAS AN INSTITU TE WHICH WAS SITUATED IN A REMOTE AREA RUN BY ITS CHAIRMAN & MEM BERS, WHO WERE ALL UNEDUCATED PERSONS. AS PER THE ASSESSEE, NO LOANS OR DEPOSITS WERE ACCEPTED OR REPAID BY THE ASSESSEE IN CASH. TRANSA CTIONS WERE THROUGH THE MANAGEMENT REPRESENTED BY ITS CHAIRMAN WHO HAD GIVEN THE LOANS. ON RECEIPT OF THIS REPLY, AO REQUIRED THE ASSESSEE TO GIVE THE DATES ON WHICH AMOUNTS WERE TAKEN/REPAID IN CASH FOR EACH AS SESSMENT YEAR SEPARATELY. ASSESSEE SUBMITTED SUCH DETAILS AND A LSO PLEADED BEFORE THE AO THAT TRANSACTIONS WERE GENUINE AND REFLECTED IN BOOKS OF ACCOUNT. 5. HOWEVER, AO WAS NOT APPRECIATIVE OF THE CONTENTI ONS TAKEN BY THE ASSESSEE. HE HELD THAT SECTIONS 269SS & 269T HAD T O BE INTERPRETED IN A ITA NOS.196 TO 202/BANG/2014 PAGE 4 OF 10 STRICT MANNER. AS PER LD. AO, ASSESSEE WAS UNABLE TO SHOW A REASONABLE CAUSE FOR GETTING THE BENEFIT OF SECTION 273B OF TH E ACT. THUS, ACCORDING TO HIM, THE CASH TRANSACTIONS INVITED PENALTY U/S. 271 D/271E OF THE ACT. PENALTIES WERE LEVIED ACCORDINGLY AS PER TABLE MENT IONED BY US ABOVE AT PARA 2. 6. AGGRIEVED, ASSESSEE MOVED APPEALS BEFORE THE CIT (APPEALS). ARGUMENT OF ASSESSEE BEFORE CIT(A) WAS THAT ACCOUNT STATEMENTS AND RETURNS OF INCOME WHICH WERE FILED WERE ALL PREPARE D WITHIN A SHORT PERIOD OF TIME BETWEEN 24.3.11, THE DATE ON WHICH COPIES O F DOCUMENTS WERE TAKEN AND 30.8.11 BEING THE DATE ON WHICH RETURNS W ERE FILED. ACCORDING TO ASSESSEE, LATER, AFTER GOING THROUGH THE BOOKS OF A CCOUNT, IT HAD FILED REVISED CONSOLIDATED RECEIPTS AND PAYMENTS ACCOUNT. AO COULD HAVE HAD DONE A VERIFICATION OF BOOKS OF ACCOUNT WITH THE RE VISED CONSOLIDATED RECEIPT & PAYMENT ACCOUNT. THE BOOKS CLEARLY SHOWE D THAT THERE WERE NO CASH LOANS OR CASH REPAYMENT OF LOANS. AS PER ASSE SSEE, VERIFICATION COULD HAVE BEEN DONE WITH IMPOUNDED RECORDS. ASSESSEE PO INTED OUT THAT THERE WAS NOT EVEN ONE DOCUMENT OR PAPER FOUND AT THE TIM E OF SURVEY, WHICH COULD LEAD TO A CONCLUSION THAT THERE WAS ACCEPTANC E OR REPAYMENT OF LOANS IN CASH. AS PER ASSESSEE, THE LOWER AUTHORITIES SI MPLY WENT BY FINANCIAL STATEMENTS ORIGINALLY FILED WITH RETURNS OF INCOME, WITHOUT MAKING A PROPER VERIFICATION THEREOF WITH IMPOUNDED BOOKS OF ACCOUN T. 7. LD. CIT(APPEALS), FINDING THAT ASSESSEE HAD TAKE N A STAND THAT ITS IMPOUNDED RECORDS WERE NOT VERIFIED AND THERE WERE NO CASH LOANS OR REPAYMENT AND ALSO DUE TO THE FACT THAT ASSESSEE FI LED REVISED CONSOLIDATED ITA NOS.196 TO 202/BANG/2014 PAGE 5 OF 10 STATEMENT FOR ALL THE YEARS, SOUGHT A REMAND REPORT FROM THE AO. AO IN SUCH REMAND REPORT, IT SEEMS, STATED THAT BOOKS OF ACCOUNT PREPARED AFRESH WERE TEST-CHECKED WITH THE IMPOUNDED MATERIAL AND F OUND TO BE IN ORDER. AO ALSO NOTED THAT DATE OF RECEIPT AND PAYMENT OF L OANS WERE NOT ASCERTAINABLE FROM THE IMPOUNDED RECORDS. LD. CIT( A), AFTER VERIFYING REMAND REPORT AND STATEMENTS OF THE ASSESSEE AND AL SO CONSIDERING THE REVISED FINANCIAL STATEMENTS FILED BY THE ASSESSEE, HELD AS UNDER AT PARA 6 OF HIS ORDER:- 6. I HAVE GONE THROUGH THE FACTS OF THE CASE, THE SUBMISSIONS MADE BY THE APPELLANT, THE REMAND REPORT OF THE ASS ESSING OFFICER (JCIT) AND ALSO PERUSED THE PENALTY ORDER P ASSED BY THE JCIT. THE JCIT ON THE BASIS OF FINANCIAL STATEMENTS FILED BY THE APPELLANT AT THE TIME OF ASSESSMENT PROCEEDINGS CAM E TO THE CONCLUSION THAT THE APPELLANT HAD ACCEPTED AND REPA ID CASH LOANS FROM AND TO ITS CHAIRMAN SH. A.B.NAYAK. IT HAS BEEN A CONTENTION OF THE APPELLANT THAT THE APPELLANT SOCIETY HAS NEI THER ACCEPTED NOR REPAID ANY CASH LOANS AND THE ONLY SOURCE OF FUNDS OF THE APPELLANT IS FEES COLLECTED FROM THE STUDENTS. THE CASH OF THE APPELLANT SOCIETY IS HANDLED BY ITS CHAIRMAN A.B.NA YAK AND THE A.O AND THE JCIT HAD CONSIDERED CASH HANDLED BY THE CHAIRMAN AS RECEIPT AND REPAYMENT OF LOAN FROM THE CHAIRMAN. THE APPELLANT HAD ALSO CONTENDED THAT NO WHERE IN THE O RDERS THE DATES OF RECEIPT OR REPAYMENT OF CASH LOANS HAD BEEN MENT IONED. THE APPELLANT HAS ALSO CONTENDED THAT AT THE TIME OF SU RVEY ONLY THE STATEMENT OF THE PRINCIPAL WAS RECORDED AND AT NO P OINT OF TIME THE CHAIRMAN OF THE SOCIETY WAS QUESTIONED ABOUT TH E LOANS. THE APPELLANT HAS FURTHER CONTENDED THAT RECEIPT AND EX PENDITURE ACCOUNTS PREPARED EARLIER WERE INCORRECT AND THEREF ORE, THE APPELLANT HAS REDRAWN ITS FINANCIAL STATEMENTS ON T HE BASIS OF BASIC RECORDS WHICH HAD BEEN IMPOUNDED BY THE A.O S UBSEQUENT TO THE SURVEY U/S 133A CONDUCTED ON 06-10-2010 AND WHICH WERE STILL IN THE CUSTODY OF THE DEPARTMENT. THE REVISED FINANCIAL STATEMENTS DO NOT SHOW ANY RECEIPT OR REPAYMENT OF CASH LOANS. THE JCIT, BIJAPUR RANGE, BIJAPUR IN HIS AFORESAID R EMAND REPORT PREPARED AFTER CONSIDERING THE APPELLANTS SUBMISSI ONS INCLUDING REVISED FINANCIAL STATEMENTS, AFFIDAVIT AND IMPOUND ED MATERIAL HAS MENTIONED THAT IT IS TRUE THAT THE DATES OF REC EIPT OR REPAYMENT OF LOANS HAD NOT BEEN MENTIONED IN THE ORDERS AND H E HAD TEST CHECKED THE ENTRIES IN THE BOOKS OF ACCOUNTS VIS A VIS THE ITA NOS.196 TO 202/BANG/2014 PAGE 6 OF 10 IMPOUNDED MATERIAL AND FOUND THEM TO BE IN ORDER. T HE JCIT IN HIS AFORESAID REMAND REPORT HAS NOT FOUND ANY DISCR EPANCY IN THE REVISED FINANCIAL STATEMENTS. THEREFORE, THERE IS N O REASON TO COME TO THE CONCLUSION DIFFERENT FROM THE SUBMISSIO NS OF THE APPELLANT AND THE FINDINGS OF THE JCIT, BIJAPUR RAN GE, BIJAPUR ARRIVED AT IN HIS AFORESAID REMAND REPORT AS FAR AS THE ISSUE OF ACCEPTANCE AND REPAYMENT OF CASH LOANS IS CONCERNED . IN THIS VIEW OF THE MATTER, THERE IS NO CASE FOR LEVY OF PE NALTIES U/S 271D OR U/S 271E. THEREFORE, THE PENALTY OF RS. 6,50,000 /- U/S 271D LEVIED BY THE JCIT, BIJAPUR RANGE, BIJAPUR IS DELET ED. 8. NOW BEFORE US, GROUNDS TAKEN BY THE REVENUE READ AS UNDER:- (1) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, T HE CIT(APPEALS) ERRED IN ADMITTING ADDITIONAL EVIDENCE S IN THE FORM OF FRESH FINANCIAL STATEMENTS VIZ BALANCE- SHEET, R ECEIPTS AND PAYMENTS A/C AND INCOME & EXPENDITURE ACCOUNT IN CONTRAVENTION OF RULE 46A SINCE THE CASE DID NOT SA TISFY ANY CONDITION MENTIONED IN RULE 46A(L) OF THE I.T. RULE S, 1962. (2) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E CIT(APPEALS) ERRED IN ACCEPTING AS CORRECT THE REVI SED UNAUDITED FINANCIAL STATEMENTS SIGNED BY AN INCOMPETENT PERSO N, WHICH ARE WHOLLY DIFFERENT FROM THE AUDITED FINANCIAL STATEME NTS PREPARED IN THE YEAR 2005, 2006, 2007, 2008, 2009, 2010 AND 201 1 AND FILED WITH THE RETURNS OF INCOME, WITHOUT EXAMINING THE A UDITOR THEREBY VIOLATING RULE 46A(4) OF THE I.T. RULES, 1962. (3) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LEARNED CIT(APPEALS), FAILED TO APPRECIATE THE FACTS OF THE CASE LEADING TO LEVY OF PENALTY UNDER SECTION 271D/271E WHICH WAS L EVIED ON THE BASIS OF THE FACT OF HANDLOANS SHOWN AGAINST THE CH AIRMAN IN ITS AUDITED BALANCE-SHEETS FOR THE RESPECTIVE ASSESSMEN T YEAR WHICH WAS PREPARED BY THE CHARTERED ACCOUNTANT AND NOT DI SPUTED BY THE ASSESSEE TILL FILING OF APPEAL. (4) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LEARNED CIT(APPEALS), ERRED IN NOT DIRECTING THE JCIT TO CO NDUCT FURTHER ENQUIRIES AND TO EXAMINE THE AUDITOR WHO HAD AUDITE D THE BOOKS OF ACCOUNT AND PREPARED STATEMENTS OF ACCOUNTS IN T HE YEAR 2005, 2006, 2007, 2008, 2009, 2010 AND 2011 NOR HE HIMSEL F EXAMINED THE FACTUAL FACTS INVOLVED IN VIEW OF RULE 46A(4) O F THE I.T. RULES, 1962. ITA NOS.196 TO 202/BANG/2014 PAGE 7 OF 10 (5) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E LEARNED CIT(APPEALS), ERRED IN IGNORING THE FACT THAT INDIC ATION OR NON- INDICATION OF THE DATE(S) OF LOAN IS INCONSEQUENTIA L IN THE FACE OF THE FACT THAT THE HANDLOANS ARE REFLECTED IN THE AU DITED BALANCE- SHEET OF THE ASSESSEE AND THE FACT THAT VIOLATION O F PROVISIONS OF SECTION 269SS/269T OF THE I.T. ACT, 1961 WAS ADMITT ED BY THE ASSESSEE IN THE ASSESSMENT PROCEEDINGS, PENALTY PRO CEEDINGS AND GROUNDS OF APPEAL FILED BEFORE THE CIT(APPEALS). (6) IN THE FACTS AND CIRCUMSTANCES OF THE CASE, TH E ORDER OF THE CIT(APPEALS) MAY BE SET ASIDE FOR RE-EXAMINATION OF THE FACTS OF THE CASE IN FULL. 9. FIRST ISSUE RAISED BY THE REVENUE IS THAT FRESH FINANCIAL STATEMENTS WERE ACCEPTED BY THE LD. CIT(A) IN CONTRAVENTION OF RULE 46A. RULE 46A(1) & (2) OF THE INCOME-TAX RULES ARE REPRODUCED HEREIN BELOW:- 46A . (1) THE APPELLANT SHALL NOT BE ENTITLED TO PRODUCE BEFORE THE DEPUTY COMMISSIONER (APPEALS) OR, AS THE CASE MAY B E, THE COMMISSIONER (APPEALS), ANY EVIDENCE, WHETHER ORAL OR DOCUMENTARY, OTHER THAN THE EVIDENCE PRODUCED BY HI M DURING THE COURSE OF PROCEEDINGS BEFORE THE ASSESSING OFFICER, EXCEPT IN THE FOLLOWING CIRCUMSTANCES, NAMELY : (A) WHERE THE ASSESSING OFFICER HAS REFUSED TO ADM IT EVIDENCE WHICH OUGHT TO HAVE BEEN ADMITTED ; OR (B) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIEN T CAUSE FROM PRODUCING THE EVIDENCE WHICH HE WAS CALLED UPON TO PRODUCE BY THE ASSESSING OFFICER ; O R (C) WHERE THE APPELLANT WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING BEFORE THE ASSESSING OFFICER ANY EVIDENCE WHICH IS RELEVANT TO ANY GROUND OF APPEAL ; OR (D) WHERE THE ASSESSING OFFICER HAS MADE THE ORDER APPEALED AGAINST WITHOUT GIVING SUFFICIENT OPPORTUNITY TO THE APPELLANT TO ADDUCE EVIDENCE RELEVANT TO ANY GROUND OF APPEAL. (2) NO EVIDENCE SHALL BE ADMITTED UNDER SUB-RULE ( 1) UNLESS THE DEPUTY COMMISSIONER (APPEALS) OR, AS THE CASE M AY BE, THE ITA NOS.196 TO 202/BANG/2014 PAGE 8 OF 10 COMMISSIONER (APPEALS) RECORDS IN WRITING THE REASO NS FOR ITS ADMISSION. 10. SUB-CLAUSE (C) OF SUB-RULE (1) CLEARLY MENTIONS THAT ASSESSEE COULD PRODUCE EVIDENCE BEFORE THE CIT(APPEALS) IF THERE W AS SUFFICIENT CAUSE, WHICH PREVENTED IT FROM PRODUCING SUCH EVIDENCE BEF ORE THE AO. HERE, DOCUMENTS WERE IMPOUNDED AND WERE WITH THE DEPARTME NT. ASSESSEE HAD PREPARED FINANCIAL STATEMENT, WHICH WERE NOT CROSS- VERIFIED BY THE AO WITH THE IMPOUNDED RECORDS. THE TIME WITHIN WHICH ASSES SEE WAS FORCED TO PREPARE THESE DOCUMENTS WAS ONLY A SHORT PERIOD OF SIX MONTHS. THEREFORE, THERE IS MUCH STRENGTH IN THE ARGUMENT O F THE ASSESSEE THAT IT WAS NOT LEFT WITH ANY TIME TO PROPERLY VERIFY THE I MPOUNDED RECORDS AND PREPARE FINANCIAL STATEMENTS. HAVING RECOGNIZED TH IS ERROR, ASSESSEE LATER SOUGHT TO RECTIFY THE EARLIER STATEMENTS BY PREPARI NG A FRESH SET OF FINANCIAL STATEMENTS. WE ARE OF THE OPINION THAT ASSESSEE CA NNOT BE FAULTED FOR THIS. IT HAD A REASONABLE CAUSE FOR PRODUCING FRESH SET O F DOCUMENTS BEFORE THE CIT(A) FOR THE SIMPLE REASON THAT IMPOUNDED BOOKS W ERE STILL WITH THE DEPARTMENT AND WHEN FILING THE RETURNS, IT WAS LEFT WITH LITTLE TIME TO HAVE A PROPER VERIFICATION OF SUCH BOOKS AND PREPARE THE S TATEMENTS. IT CANNOT BE SAID THAT THE CONDITIONS UNDER RULE 46A WAS NOT SAT ISFIED. WE ARE OF THE OPINION THAT THE LD. CIT(A) WAS JUSTIFIED IN CONSID ERING THE REVISED FINANCIAL STATEMENTS. 11. APART FROM THE FACT ASPECT OF THERE BEING NO VI OLATION OF RULE 46A, WE ALSO FIND THAT CIT(A) HAD SOUGHT A REMAND REPORT FROM THE AO. WHAT THE AO STATED IN THE REMAND REPORT IS REPRODUCED HE REIN:- ITA NOS.196 TO 202/BANG/2014 PAGE 9 OF 10 THE CONTENTION OF THE ASSESSEE WAS PURSUED ALONG WITH IMPOUNDED MATERIALS AND THE SUBMISSIONS MADE BEFORE YOUR GOODSELF AND THE FINDINGS ARE AS UNDER- (A) THE EXACT DATE OF RECEIVING AND REPAYMENT OF L OAN, IS NOT ASCERTAINABLE FROM THE MATERIAL IN POSSESSION OF TH E DEPARTMENT. AGAIN THIS IS EVIDENCED BY THE ORDER PA SSED BY THE THEN AO LEVYING PENALTY WHEREIN NO EXACT DATE O F RECEIVING AND PAYMENT OF LOAN HAS BEEN MENTIONED IN THE PENALTY ORDER FOR ALL THE AYS. (B) THE BOOKS OF ACCOUNT PREPARED FRESH AND CLAIME D TO BE CORRECT BY THE ASSESSEE ARE TEST CHECKED FOR THEIR CORRECTNESS VIS--VIS IMPOUNDED MATERIALS AND ARE FOUND TO BE I N ORDER. IN VIEW OF THE ABOVE, IT IS SUBMITTED THAT THE APPE AL MAY BE DECIDED ON MERITS. 12. A READING OF THE REMAND REPORT CLEARLY SHOWS TH AT THE AO HAD VERIFIED THE REVISED FINANCIAL STATEMENTS FURNISHED BY THE ASSESSEE BEFORE THE CIT(A). IN THE REMAND PROCEEDINGS IT IS MENTI ONED THAT THE REVISED STATEMENTS WERE TALLYING WITH THE BOOKS OF ACCOUNT AND OTHER IMPOUNDED MATERIAL. IT IS ALSO MENTIONED THAT DATE OF RECEIP T AND PAYMENT OF CASH LOAN, IF ANY, WAS NOT ASCERTAINABLE. FOR LEVY OF P ENALTY U/S. 271D AS WELL AS 271E, IT IS REQUIRED FOR THE AO TO ESTABLISH THAT A SSESSEE HAD ACCEPTED OR REPAID A LOAN OR DEPOSIT IN CONTRAVENTION OF SECTIO N 269SS/269T, AS THE CASE MAY BE. THIS, IN TURN, REQUIRES TO BE SHOWN T HAT ASSESSEE HAD ACCEPTED LOAN OR DEPOSIT IN CASH WHICH IS RS.20,000 OR ABOVE, OR REPAID SIMILAR AMOUNT IN CASH. WITHOUT THE DETAILS REGAR DING RECEIPTS & PAYMENT, IN OUR OPINION, AO COULD NOT HAVE PROCEEDED SIMPLY BASED ON THE FIGURES GIVEN IN THE ORIGINAL FINANCIAL STATEMENTS FILED BY THE ASSESSEE. NOT EVEN A SINGLE INSTANCE HAS BEEN SHOWN BY THE AO FROM THE R ECORDS THAT ANY AMOUNT WAS ACCEPTED BY THE ASSESSEE AS LOAN OR REPA ID BY THE ASSESSEE ITA NOS.196 TO 202/BANG/2014 PAGE 10 OF 10 IN CASH, IN EXCESS OF THE LIMITS LAID DOWN U/S. 269 SS/269T OF THE ACT. IN SUCH CIRCUMSTANCES, WE ARE OF THE OPINION THAT THE LD. CIT(APPEALS) WAS JUSTIFIED IN DELETING THE PENALTIES LEVIED ON THE A SSESSEE. WE, THEREFORE, DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF CIT(APPEALS). 13. IN THE RESULT, APPEALS OF THE REVENUE STAND DISMISSED . PRONOUNCED IN THE OPEN COURT ON THIS 22 ND DAY OF JANUARY, 2015. SD/- SD/- ( N.V. VASUDEVAN ) ( ABRAHAM P. GEORGE ) JUDICIAL MEMBER ACCOUNTANT ME MBER BANGALORE, DATED, THE 22 ND JANUARY, 2015. DS/- COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASSISTANT REGISTRAR / SENIOR PRIVATE SECRETARY ITAT, BANGALORE.