Suresh Pandit Borale, Jalgaon V. Joint Commissioner of Income-tax,

ITA 2032/PUN/2013

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 9299 (ITAT-PUNE)
• Duration Of Justice: 3 year(s) 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 15-03-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 25-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P S NAIK
• Keywords: Depreciation; Bonafide belief; Initiation of penalty proceedings; Reasonable cause; Revised return
• Section: 273B; 143(3); 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 2032 /P U N/201 3 / ASSESSMENT YEAR : 20 0 9 - 10 SHRI SURESH PANDIT BORALE, PANKAJ PLAZA, ABOVE CHOPDA URBAN BANK, AMBEDKAR CHOW K , JALGAON . / APPELLANT PAN: AASPB7418H VS. THE JT. COMMISSIONER OF INCOME TAX, RA NGE 1, JALGAON . / RESPONDENT . / ITA NO. 2033 /P U N/201 3 / ASSESSMENT YEAR : 20 09 - 10 SHRI SURESH PANDIT BORALE, PANKAJ PLAZA, ABOVE CHOPDA URBAN BANK, AMBEDKAR CHOW, JALGAON . / APPELLANT PAN: AASPB7418H VS. THE JT. COMMISSIONER OF INCOME TAX, RANGE 1, JALGAON . / RESPONDENT / APPELLANT BY : SHRI PRAMOD SHINGTE / RESPONDENT BY : SHRI P.S. NAIK / DATE OF HEARIN G : 19 .0 6 . 2017 / DATE OF PRONOUNCEMENT: 23 . 0 6 .201 7 ITA NO S . 2032 & 2033/ P U N/20 1 3 SHRI SURESH PANDIT BORAL E 2 / ORDER PER SUSHMA CHOWLA, J M : BOTH THE APPEALS FILED BY THE ASSESSEE ARE AGAINST SEPARATE ORDER S OF CIT (A) - 2, NASHIK , BOTH DATED 23.09.2013 RELATING TO ASSESSMENT YEAR 20 0 9 - 1 0 AGAINST PENALTY LEVIED UNDER SECTIONS 271(1)(C) AND 271E OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) RESPECTIVELY . 2 . BOTH THE APPEALS RELATING TO THE SAME ASSESSEE WERE HEARD TOGETHER AND ARE BEING DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.2032/PUN/2013 3. THE ASSESSEE IN ITA NO.2032/PUN/2013 HAS RAISED THE FOLLOWING GROUND OF APPEAL: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LOWER AUTHORITIES HAVE ERRED IN LEVYING THE PENALTY U/S 271( 1)(C), A SUM OF RS.27,39,028/ - BY DISREGARDING APPELLANTS CONTENTION IN THIS REGARD. 4. THE APPEAL IN ITA NO.2032/PUN/2013 IS AGAINST LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. 5. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE AT THE OU TSET POINTED OUT THAT THE ASSESSING OFFICER WHILE PASSING THE ASSESSMENT ORDER UNDER SECTION 143(3) OF THE ACT HAS FAILED TO RECORD SATISFACTION AS TO THE INITIATION OF PENALTY PROCEEDINGS. ADMITTEDLY, THE ASSESSING OFFICER HAS INITIATED PENALTY PROCEEDIN GS BUT ON WHICH LIMB OF SECTION IS MISSING FROM THE ASSESSMENT ORDER. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE REFERRED TO THE PARA 6 OF ASSESSMENT ORDER IN RESPECT OF ADDITIONAL INCOME OF RS.50 LAKHS AND PARA 6.3 OF ASSESSMENT ORDER OF ADDI TION OF RS.3,75,000/ - ITA NO S . 2032 & 2033/ P U N/20 1 3 SHRI SURESH PANDIT BORAL E 3 WHICH WAS ADDED TO THE INCOME OF ASSESSEE AND ON WHICH PENALTY PROCEEDINGS HAVE BEEN INITIATED , BUT IN THE ABSENCE OF RECORDING OF SATISFACTION. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE PLACED RELIANCE ON THE RATIO LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. SHRI SAMSON PERINCHERY IN INCOME TAX APPEAL NO.1154 OF 2014 WITH OTHER INCOME TAX APPEALS NOS.953 OF 2014, 1097 OF 2014 AND 1226 OF 2014, JUDGMENT DATED 05.01.2017 AND THE PUNE BENCH OF TRIBUNAL IN KANHAIY ALAL D. JAIN VS. ACIT IN ITA NOS.1201 TO 1205/PN/2014, RELATING TO ASSESSMENT YEARS 2003 - 04 TO 2007 - 08, ORDER DATED 30.11.2016 . 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE REFERRED TO THE PENALTY ORDER PASSED UNDER SECTION 271(1)(C) OF THE ACT AND HAS POINTED OUT THAT THE ASSESSING OFFICER IN PARA 5.3 OF ASSESSMENT ORDER HAS HELD THE ASSESSEE TO HAVE FURNISHED INACCURATE PARTICULARS OF INCOME AND THEREAFTER, LEVIED PENALTY FOR SUCH FAILURE AND HENCE, THE PENALTY ORDER NEEDS TO BE UPHELD. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS AGAINST LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT AT RS. 27,39,028/ - . BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE HAD FILED THE RETURN O F INCOME DECLARING NIL INCOME AND AGRICULTURAL INCOME AT RS.6,36,716/ - AND ALSO CARRY FORWARD OF LOSSES, DEPRECIATION AND BUSINESS LOSSES. THEREAFTER, REVISED RETURN OF INCOME WAS FILED BY THE ASSESSEE DECLARING TOTAL INCOME AT NIL AND CURRENT YEARS LOSS ES AT RS.41,47,414/ - . THE CASE OF ASSESSEE WAS PICKED UP FOR SCRUTINY AND AFTER PERUSING SEVERAL DETAILS, THE ASSESSING OFFICER NOTED CERTAIN DISCREPANCIES IN THE BOOKS OF ACCOUNT AND ALSO SALE OF THE PROPERTY AT A PRICE HIGHER THAN THE ONE DECLARED BY TH E ASSESSEE. THE ASSESSEE OFFERED ADDITIONAL INCOME ON ACCOUNT OF SALE OF PROPERTY AT RS.80 LAKHS OVER THE ABOVE SALE CONSIDERATION OF RS.50 LAKHS AND ITA NO S . 2032 & 2033/ P U N/20 1 3 SHRI SURESH PANDIT BORAL E 4 THE SAME WAS ADDED IN THE HANDS OF ASSESSEE BY THE ASSESSING OFFICER VIDE PARA 6 OF THE ASSESSMENT ORDER. THEREAFTER, HE FAILS TO RECORD ANY SATISFACTION AS TO WHICH LIMB OF SECTION 271(1)(C) OF THE ACT HAS BEEN VIOLATED BUT SIMPLY INITIATES THE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. THEREAFTER, OTHER ADDITIONS WERE MADE IN THE HANDS OF ASS ESSEE. HOWEVER, ONLY IN RESPECT OF INTEREST ELEMENT ON CASH BALANCES UN - UTILIZED WAS WORKED OUT AT RS.3,75,000/ - AND WAS ADDED TO THE INCOME OF ASSESSEE AND AGAINST IT, PENALTY PROCEEDINGS WERE INITIATED. HOWEVER, THE ASSESSING OFFICER FAILS TO RECORD SA TISFACTION AS TO WHICH LIMB OF SAID SECTION HAS BEEN VIOLATED BY THE ASSESSEE. THEREAFTER, THE ASSESSING OFFICER ISSUES SHOW CAUSE NOTICE UNDER SECTION 274 R.W.S. 271(1)(C) OF THE ACT. THE ASSESSING OFFICER PURSUANT TO THE SAID ASSESSMENT ORDER HAD PASSE D ORDER UNDER SECTION 271(1)(C) OF THE ACT LEVYING PENALTY UPON THE ASSESSEE FOR FURNISHING INACCURATE PARTICULARS OF INCOME AND LEVIED PENALTY AT RS.27,39,028/ - . HOWEVER, AN INFIRMITY HAD OCCURRED IN THE ORDER OF ASSESSING OFFICER, WHEREIN THE ASSESSING OFFICER HAS FAILED TO RECORD SATISFACTION WHILE COMPLETING THE ASSESSMENT PROCEEDINGS AS TO WHETHER THE ASSESSEE HAS CONCEALED ITS INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. 8. AS PER PROVISIONS OF SECTION 271(1)(C) OF THE ACT, PENALTY FOR CO NCEALMENT CAN BE LEVIED EITHER FOR CONCEALING INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. E ITHER OF LIMB MAY BE SATISFIED FOR LEVY OF PENALTY UNDER SECTION 271(1)(C) OF THE ACT. THE ASSESSING OFFICER IN THIS REGARD BEFORE INITIATING PENALTY PROCEEDINGS HAS TO RECORD SATISFACTION TO T HAT EFFECT AND IN THE ABSENCE OF THE SAME, PENALTY PROCEEDINGS INITIATED AGAINST THE ASSESSEE SUFFERS FROM LACUNAE WHICH COULD NOT BE CORRECTED BY PASSING AN ORDER ON ONE OF THE LIMBS OF SECTION 271(1)(C) OF THE ACT. THE TWO LIMBS ARE DISTINCT AS HAS ITA NO S . 2032 & 2033/ P U N/20 1 3 SHRI SURESH PANDIT BORAL E 5 BEEN HELD BY THE HONBLE BOMBAY HIGH COURT IN CIT VS. SHRI SAMSON PERINCHERY (SUPRA) AND FURTHER IT HAS BEEN HELD THAT THE SATISFACTION OF ASSESSING OFFICER WITH REGARD TO ONLY ONE OF TWO BREACHES MENTIONED UNDER SEC TION 271(1)(C) OF THE ACT, FOR INITIATION OF PENALTY PROCEEDINGS WOULD NOT WARRANT / PERMIT PENALTY BEING IMPOSED FOR OTHER BREACHES. IT IS FURTHER HELD IT MUST, THEREFORE, FOLLOW THAT THE ORDER IMPOSING PENALTY HAS TO BE MADE ONLY ON THE GROUND OF WHICH THE PENALTY PROCEEDINGS HAS BEEN INITIATED, AND IT CANNOT BE ON A FRESH GROUND OF WHICH THE ASSESSEE HAS NO NOTICE. 9. APPLYING THE SAID RATIO TO THE FACTS OF PRESENT CASE, WHERE THE ASSESSING OFFICER HAS FAILED TO RECORD SATISFACTION AND SHOW CAUSE THE ASSESSEE AS TO WHICH LIMB OF SECTION 271(1)(C) OF THE ACT HAS NOT BEEN SATISFIED BY THE ASSESSEE, THEN INITIATION OF PENALTY PROCEEDINGS WAS WITHOUT ANY BASIS AND CONSEQUENT ORDER PASSED UNDER SECTION 271(1)(C) OF THE ACT NEEDS TO BE QUASHED. ACCORDINGLY , WE HOLD SO. WE FURTHER FIND SIMILAR PROPOSITION HAS BEEN LAID DOWN BY THE PUNE BENCH OF TRIBUNAL IN VARIOUS OTHER CASES INCLUDING THE LEAD CASE IN KANHAIYALAL D. JAIN VS. ACIT (SUPRA) . ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY LEVIED AT RS.27,39,028/ - . THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS THUS, ALLOWED. ITA NO.2033/PUN/2013 10. THE ASSESSEE IN ITA NO.2033/PUN/2013 HAS RAISED THE FOLLOWING GROUND OF APPEAL: - ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LOWER AUTHORITIES HAVE ERRED IN LEVYING THE PENALTY OF RS.22,82,250/ - BY INVOKING PROVISIONS OF SECTION 271(E) FOR ALLEGED CONTRAVENTION OF THE PROVISIONS OF SECTION 269T BY DISREGARDING APPELLANTS CONTENTION IN THIS REGARD. ITA NO S . 2032 & 2033/ P U N/20 1 3 SHRI SURESH PANDIT BORAL E 6 11. THE PRESENT APPE AL FILED IS AGAINST LEVY OF PENALTY UNDER SECTION 271E OF THE ACT. THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS HAD NOTED THAT THE ASSESSEE HAD REPAID CERTAIN LOANS / AMOUNTS TO THE COOPERATIVE SOCIETIES IN CASH. THE ASSESSEE WAS ASK ED TO GIVE EXPLANATION AND THE ASSESSEE REPLIED THAT THE AMOUNT WAS PAID ON ACCOUNT OF LOAN TAKEN FROM THE SOCIETIES. THE PLEA OF ASSESSEE WAS THAT THE TRANSACTIONS WERE BONAFIDE AND GENUINE AND WERE MADE ON ACCOUNT OF URGENT BUSINESS NECESSITY, SINCE THE RE WAS REQUIREMENT BY THE CREDIT COOPERATIVE SOCIETIES TO MAKE URGENT PAYMENTS IN THE LOAN ACCOUNT OF ASSESSEE, WITHOUT WHICH THE CREDIT SOCIETY MAY STOP FURTHER BUSINESS OPERATIONS OF ASSESSEE. THE ASSESSEE IN VIEW OF AVAILABILITY OF CASH, CLAIMS TO HAVE PAID THE CASH INTO LOAN ACCOUNT OF THE CREDIT SOCIETIES. THE ASSESSEE CLAIMED THAT IT HAD BONAFIDE BELIEF THAT THE PROVISIONS OF SECTION 269SS / 269T OF THE ACT WERE NOT ATTRACTED. THE ASSESSING OFFICER DID NOT ACCEPT THE PLEA OF ASSESSEE, SINCE HE HAD VIOLATED THE PROVISIONS OF SECTION 269T OF THE ACT IN MAKING THE CASH PAYMENTS TO CREDIT COOPERATIVE SOCIETIES . IN THE ABSENCE OF ANY REASONABLE CAUSE, THE ASSESSING OFFICER HELD THE ASSESSEE IS ELIGIBLE FOR LEVY OF PENALTY UNDER SECTION 271E OF THE ACT A ND LEVIED PENALTY AT RS.22,82,250/ - . 12. THE CIT(A) UPHELD THE ORDER OF ASSESSING OFFICER REJECTING THE CLAIM OF REASONABLE CAUSE PROPOSED BY THE ASSESSEE AND VARIOUS RELIANCES PLACED UPON BY THE ASSESSEE. THE CIT(A) NOTED THE PLEA OF ASSESSEE THAT THERE WAS REQUIREMENT TO PAY URGENT CASH TO THE CREDIT COOPERATIVE SOCIETIES, BUT THE ASSESSEE HAS FAILED TO PROVE WITH DOCUMENTARY EVIDENCE AND HENCE, THE PLEA OF ASSESSEE WAS REJECTED. 13. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF CIT(A). ITA NO S . 2032 & 2033/ P U N/20 1 3 SHRI SURESH PANDIT BORAL E 7 14. THE LEA RNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT THERE WAS A BONAFIDE BELIEF THAT THE ASSESSEE COULD REPAY THE AMOUNT IN CASH TO THE COOPERATIVE SOCIETIES, SINCE THE PAYMENT IN CASH TO COOPERATIVE BANKS WAS ALLOWED. BECAUSE OF THIS REASONA BLE BELIEF AND BECAUSE OF THE URGENCY OF COOPERATIVE SOCIETIES TO MAKE THE PAYMENT IN CASH, THE ASSESSEE HAS BONAFIDE CASE AND WHERE DEFAULT IS TECHNICAL, THEN NO PENALTY IS TO BE LEVIED, IN VIEW OF THE RATIO LAID DOWN BY THE HONBLE PUNJAB & HARYANA HIGH COURT IN CIT VS. SAINI MEDICAL STORE (2005) 277 ITR 420 (P&H) . HE FURTHER STRESSED THAT TRAIL OF MONEY WAS AVAILABLE AND IN SUCH CIRCUMSTANCES, THERE WAS NO MERIT IN REJECTING THE PLEA OF ASSESSEE AND LEVYING PENALTY UNDER SECTION 271E OF THE ACT. HE FUR THER PLACED RELIANCE ON THE DECISIONS OF PUNE BENCH OF TRIBUNAL IN GURUKRUPA GRAMIN BIGAR SHETI SAH. PAT SANSTHA MARYADIT VS. ADDL. CIT IN ITA NO.1349/PN/2014, RELATING TO ASSESSMENT YEAR 2010 - 11, ORDER DATED 20.08.2014 AND IN BHARAT AGARWAL NAGARI SAH. PA TSANSTHA MARYADIT VS. ADDL. CIT IN ITA NO.496/PUN/2015, RELATING TO ASSESSMENT YEAR 2010 - 11, ORDER DATED 08.03.2017, WHEREIN THE CREDIT COOPERATIVE SOCIETIES HAD ACCEPTED CASH FROM MEMBERS AND THE TRIBUNAL HAD HELD THE SAID SOCIETIES NOT TO BE IN DEFAULT I N ACCEPTING THE CASH AND CONSEQUENTLY, PENALTY LEVIED UNDER SECTION 271D OF THE ACT WAS DELETED. 15. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, RELYING ON THE ORDER OF CIT(A) WITH SPECIAL REFERENCE TO PARA 7.1 POINTED OUT THAT THERE WAS NO REASONABLE CAUSE FOR MAKING PAYMENT IN CASH SINCE THE AMOUNT WAS RECEIVED BY WAY OF DEMAND DRAFT AND THE REPAYMENT SHOULD HAVE BEEN ACCORDINGLY, MADE. HE FURTHER STATED THAT IN THE ABSENCE OF REASONABLE CAUSE, THE ASSESSEE IS LIABLE FOR LEVY OF PENALTY UNDER SECTION 271E OF THE ACT, IN VIEW OF THE RATIO LAID DOWN BY THE HONBLE PUNJAB & HARYANA HIGH COURT IN ITA NO S . 2032 & 2033/ P U N/20 1 3 SHRI SURESH PANDIT BORAL E 8 CHARAN DASS ASHOK KUMAR VS. CIT (2014) 52 TAXMANN.COM 424 (PUNJAB & HARYANA) AND THE HONBLE HIGH COURT OF MADRAS IN P. MUTHUKARUPP AN VS. JCIT (2015) 62 TAXMANN.COM 72 (MADRAS). 16. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. UNDER THE PROVISIONS OF SECTION 271D OF THE ACT, IT IS PROVIDED THAT ANY PAYMENT RECEIVED IN CASH OTHER THAN CROSS ED CHEQUE OR CROSS ED DEMAND D RAFT EXCEEDING RS.20,000/ - ATTRACTS LEVY OF PENALTY SINCE THE PROVISIONS OF SECTION 269SS OF THE ACT ARE VIOLATED. SIMILARLY, IN CASE ANY LOAN OR DEPOSIT IS REPAID IN CASH BY AN AMOUNT OF RS.20,000/ - OR MORE OTHERWISE THAN CROSS ED CHEQUE OR CROSSED DEMAND DRAFT, THEN SUCH ASSESSEE HAS VIOLATED THE PROVISIONS OF SECTION 269T OF THE ACT AND IS LIABLE FOR LEVY OF PENALTY UNDER SECTION 271E OF THE ACT.. HOWEVER, UNDER SECTION 273B OF THE ACT, IT IS PROVIDED THAT WHERE THE ASSESSEE HAS REASONABLE CAUSE FOR NOT COMPLYING WITH THE REQUIRED CONDITIONS UNDER THE RESPECTIVE SECTIONS, THEN PENALTY LEVIED UNDER THE RESPECTIVE SECTIONS CAN BE WAIVED. ACCORDINGLY, IN CASE THE ASSESSEE ESTABLISHES HIS CASE OF REASONABLENESS, THEN IN SUCH CIRCUMSTANCES, PENALTY LEVIED FO R VIOLATION OF RESPECTIVE SECTIONS MAY BE CANCELLED. ACCORDINGLY, THE FACTUAL FACTS OF THE CASE HAVE TO BE SEEN IN THIS REGARD. 17. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE HAS PLA CED RELIANCE ON THE DECISIONS OF HONBLE HIGH COURT OF PUNJ AB & HARYANA IN CHARAN DASS ASHOK KUMAR VS. CIT (SUPRA) AND THE HONBLE HIGH COURT OF MADRAS IN P. MUTHUKARUPPAN VS. JCIT (SUPRA) , WHEREIN THE PROPOSITION LAID DOWN IS THAT IN CASE THE ASSESSEE FAILED TO ESTABLISH THAT THERE EXISTED ANY REASONABLE CAUSE IN TAKING OR ACCEPTING THE LOAN OR DEPOSIT OTHERWISE BY AN ACCOUNT PAYEE CHEQUE OR BANK DRAFT, THEN LEVY OF PENALTY IS JUSTIFIED. SO, THE PROPOSITION CANVASSED BY THE ASSESSEE THAT THERE WAS REASONABLE CAUSE IN NOT MAKING THE ITA NO S . 2032 & 2033/ P U N/20 1 3 SHRI SURESH PANDIT BORAL E 9 PAYMENT BY WAY OF CROSS ED CHEQU E OR CROSS ED BANK DRAFT HAS TO BE CONSIDERED BEFORE CONCLUDING AS TO WHETHER THE ASSESSEE IS ELIGIBLE FOR LEVY OF PENALTY UNDER SECTION 269T OF THE ACT. 18. IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE HAD TAKEN CERTAIN LOANS FROM CREDIT COOPERATIVE SOC IETIES WHICH WERE ADMITTEDLY, RECEIVED BY THE ASSESSEE THROUGH DEMAND DRAFTS. HOWEVER, THE ASSESSEE REPAID THE SAID LOANS IN CASH AND HENCE, THE CASE OF ASSESSING OFFICER THAT THE ASSESSEE HAS VIOLATED THE PROVISIONS OF SECTION 269T OF THE ACT. IN REPLY TO INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271E OF THE ACT, THE ASSESSEE HAS RAISED THE ISSUE OF REASONABLENESS, WHEREIN IT HAS BEEN POINTED OUT THAT FIRST OF ALL, THE SAID CASH WAS PAID BECAUSE OF EMERGENT CONDITIONS AND THE SECOND CLAIM OF ASSESS EE WAS THAT IT HAD BONAFIDE BELIEF THAT IT COULD PAY THE SAID AMOUNTS IN CASH TO T HE CREDIT COOPERATIVE SOCIETIES. THE SAID PLEA WAS ON THE PREMISE THAT THE PAYMENT COULD BE MADE IN CASH TO CREDIT COOPERATIVE BANKS, ACCORDINGLY, CONFUSION IN THE MIND OF A SSESSEE. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT THERE IS A REASONABLE CAUSE IN NOT COMPLYING WITH THE PROVISIONS OF SECTION 269T OF THE ACT . E VEN OTHERWISE, THE ASSESSEE HAS ESTABLISHED THE TRAIL OF MONEY, WHE REIN THE AMOUNT WAS RECEIVED FROM THE CREDIT COOPERATIVE SOCIETIES BY WAY OF CROSS ED CHEQUE / DEMAND DRAFT BUT WAS REPAID IN CASH. THE DEFAULT , IF ANY, IS TECHNICAL DEFAULT. WE FIND THAT PUNE BENCH OF TRIBUNAL IN REVERSE FACTS OF ACCEPTANCE OF LOAN OR DE POSIT BY CREDI T COOPERATIVE SOCIETIES IN CASH, HELD THAT THERE IS NO MERIT IN LEVY OF PENALTY UNDER SECTION 271D OF THE ACT BECAUSE OF REASONABLE BELIEF THAT SINCE IT WAS CARRYING ON THE BUSINESS OF ACCEPTING OR DEPOSIT FROM ITS MEMBERS AND EXTENDING CREDI T FACILITIES TO THEM, THEN THE PROVISIONS OF BANKING REGULATIONS ACT WERE APPLICABLE AND IT COULD ACCEPT AMOUNT IN CASH. THE TRIBUNAL IN ITA NO S . 2032 & 2033/ P U N/20 1 3 SHRI SURESH PANDIT BORAL E 10 GURUKRUPA GRAMIN BIGAR SHETI SAH. PAT SANSTHA MARYADIT VS. ADDL. CIT (SUPRA) AND IN BHARAT AGARWAL NAGARI SAH. PATSANS THA MARYADIT VS. ADDL. CIT (SUPRA) HAD DELETED THE PENALTY UNDER SECTION 271D OF THE ACT BECAUSE OF REASONABLE CAUSE. APPLYING THE SAID PRINCIPLE TO THE FACTS BEFORE US, WE HOLD THAT THE ASSESSEE HAD REASONABLE CAUSE AND BECAUSE OF THE SAID REASONABLE BEL IEF, IT HAD REPAID THE AMOUNT IN CASH TO THE CREDIT COOPERATIVE SOCIETIES. IN SUCH CIRCUMSTANCES, THE ASSESSEE IS NOT LIABLE TO LEVY OF PENALTY UNDER SECTION 271E OF THE ACT . ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO DELETE PENALTY UNDER SECTION 27 1E OF THE ACT. THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS THUS, ALLOWED. 1 9 . IN THE RESULT, BOTH THE APPEALS OF ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON THIS 23 RD DAY OF JUNE , 201 7 . SD/ - SD/ - (ANIL CHATURVEDI ) (SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 23 RD JUNE , 201 7 . GCVSR / COPY OF THE OR DER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3. ( ) / THE CIT (A) - 2, NASHIK ; 4. / THE CIT - 2, NASHIK ; 5. , , / DR B , ITAT, PUNE; 6. / GUARD FILE . / BY ORDER , // TRUE COPY // / ASSISTANT REGISTRAR, , / ITAT, PUNE