Sri Jasti Kannaiah Chowdary, Eluru V. The Ad CIT, Eluru, Eluru

ITA 263/VIZ/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 0245 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 3 year(s) 3 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 09-09-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 18-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K GOPALAKRISHNA
• Keywords: Bonafide belief; Question of law; Reasonable cause
• Section: 273B; 68

Judgement Text

ITA NO.262&263/VIZAG/2012 JASTI KANNAIAH CHOWDARY, ELURU 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, VISAKHAPATNAM BENCH, VISAKHAPATNAM . . . . , ,, , . . . . , , , , % % % % BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER & SHRI G. MANJUNATHA, ACCOUNTANT MEMBER . .. ./ // / I.T.A.NOS.262&263/VIZAG/2012 ( / ASSESSMENT YEAR : 2004-05 ) JASTI KANNAIAH CHOWDARY ELURU VS. ADDL. CIT ELURU [ PAN:AEVPJ 06712E ] (, , , , / APPELLANT) (-., -., -., -., / RESPONDENT ) , / / APPELLANT BY : SHRI G.V.N. HARI, AR -., / / RESPONDENT BY : SHRI K. GOPALAKRISHNA, DR / 3 / DATE OF HEARING : 09.09.2015 / 3 / DATE OF PRONOUNCEMENT : 30.09.2015 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER: THESE APPEALS ARE DIRECTED AGAINST THE ORDER OF CI T(A), VISAKHAPATNAM DATED 24.2.2012 RELATING TO THE ASSES SMENT YEAR 2004- 05. BOTH THE APPEALS ARE HEARD TOGETHER AND FOR TH E SAKE OF CONVENIENCE COMMON ORDER IS PASSED. ITA NO.262&263/VIZAG/2012 JASTI KANNAIAH CHOWDARY, ELURU 2 2. FACTS ARE IN BRIEF THAT THE ASSESSEE IS A PROPR IETOR OF M/S. RAMAKRISHNA TRADERS, JEELAKARRAGUDEM IS IN THE BUSI NESS OF SALE OF FERTILIZERS. THE ASSESSEE HAS FILED RETURN OF INCO ME FOR THE YEAR UNDER CONSIDERATION. THE A.O. WHILE PROCESSING THE RETUR N HAS NOTICED THAT THE ASSESSEE HAS ACCEPTED LOANS OF RS.20,000/- AND ABOV E IN CASH AND ALSO REPAID IN CASH IN CONTRAVENTION TO THE PROVISIONS O F SECTION 269SS & 269T OF THE INCOME-TAX ACT, 1961 (HEREINAFTER CALLE D AS THE ACT). THE AMOUNTS BORROWED AND REPAID ARE EXTRACTED AS UNDER: NAME OF THE PERSON DATE OF ACCEPTANCE AMOUNT ACCEPTED DATE OF REPAYMENT AMOUNT REPAID M. NAVEEN 29.08.2003 40,000/- 09.03.2004 90,000/- M. SINDHUJA 29.08.2003 35,000/- 09.03.2004 85,000/- M. SURYA PRABHA 29.08.2003 34,869/- 09.03.2004 84,869/- TOTAL 1,09,869/- 2,59,869/- 3. FROM THE ABOVE, THE A.O. CAME TO A CONCLUSION TH AT ASSESSEE HAS VIOLATED THE PROVISIONS OF SECTION 269SS & 269T OF THE ACT LIABLE FOR PENALTY U/S 271D&E REFERRED THE MATTER TO THE ADDL. CIT ELURU RANGE AND THE LD. ADDL. CIT HAS ISSUED A SHOW CAUSE NOTI CE TO THE ASSESSEE CALLED AN EXPLANATION FROM THE ASSESSEE THAT WHY PE NALTY U/S 271D&E OF ITA NO.262&263/VIZAG/2012 JASTI KANNAIAH CHOWDARY, ELURU 3 THE ACT CANNOT BE LEVIED. IN RESPONSE TO THAT ASSE SSEE HAS SUBMITTED THAT THE AMOUNTS BORROWED ARE GENUINE AND WERE ACCE PTED IN CASH FOR URGENT BUSINESS REQUIREMENTS OF THE ASSESSEE AND TH E SAME WERE DEPOSITED IN THE BANK ACCOUNT, WHICH CONSTITUTES A REASONABLE CAUSE U/S 273B OF THE ACT PRAYED THAT PENALTY PROCEEDINGS MAY BE DROPPED. HOWEVER, THE LD. ADDL. CIT NOT CONVINCED WITH THE E XPLANATION GIVEN BY THE ASSESSEE AND HE HAS OBSERVED THAT THE ASSESSEE IS HAVING A BANK ACCOUNT IN HYDERABAD AND THE LENDERS ALSO HAVING A BANK ACCOUNT IN HYDERABAD. THE ASSESSEE COULD HAVE BEEN ACCEPTED C HEQUE FROM THE LENDERS AS WELL AS REPAID THROUGH THE CHEQUE. THE ASSESSEE ALSO FAILED TO EXPLAIN REASONABLE CAUSE TO BORROW THE FUNDS AS WELL AS REPAID THE FUNDS FOR THE PURPOSE OF BUSINESS NECESSITY. WITH T HE ABOVE OBSERVATION, THE LD. ADDL. COMMISSIONER HAS IMPOSED A PENALTY U/S 271D OF THE ACT AS WELL AS 271E OF THE ACT. THE AS SESSEE CARRIED THE MATTER BEFORE THE CIT(A). LD. CIT(A) HAS OBSERVED THAT THE ASSESSEE IS ALREADY HAVING A CASH BALANCE OF RS.3,01,535/- AS O N 29.8.2003. THE SAID LOAN AMOUNT ALONG WITH THE AVAILABLE CASH WAS DEPOSITED IN THE BANK ACCOUNT AT HYDERABAD. THEREFORE, THE FUNDS BO RROWED FOR THE IMMEDIATE BUSINESS REQUIREMENT IS NOT ACCEPTABLE. HE FURTHER OBSERVED THAT SUBSEQUENT TO BORROWAL MADE BY THE ASSESSEE, H E FURTHER DEPOSITED IN THE VYSYA BANK ACCOUNT ON 24.9.2003 AND 3.10.200 3. THE WITHDRAWAL ITA NO.262&263/VIZAG/2012 JASTI KANNAIAH CHOWDARY, ELURU 4 OF MONEY WAS ONLY ON 20.10.2003 I.E. AFTER ONE MONT H AND 22 DAYS. ON THE BASIS OF ABOVE OBSERVATION, THE LD. CIT(A) CAME TO THE CONCLUSION THAT THERE IS NO REASONABLE CAUSE FOR THE ASSESSEE TO ACCEPT LOANS IN CASH AND REPRESENTING IN CASH AND CONFIRM THE ORDER OF THE A.O. ON BEING AGGRIEVED, ASSESSEE CARRIED THE MATTER BEFORE THE TRIBUNAL. 4. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED T HAT THE ASSESSEE IS IN THE BUSINESS OF SALE OF FERTILIZER WHICH IS A N UNORGANIZED SECTOR, DEALS WITH THE FARMERS. THE PLACE OF BUSINESS IS A REMOTE PLACE I.E. JEELAKARRAGUDEM VILLAGE. THE ASSESSEE HAS BORROWED THE FUNDS FROM THE 3 PARTIES NAMELY M. NAVEEN, M. SINDHUJA & M. SU RYA PRABHA ARE RESIDENTS OF HYDERABAD AND IT IS OF IMMEDIATE NECES SITY OF THE BUSINESS. WHEN THERE IS A BUSINESS NECESSITY FOR THE ASSESSEE TO BORROW THE FUNDS AND REPAID THE FUNDS, IT IS A REASONABLE CAUSE FOR THE ASSESSEE NOT STRICTLY COMPLIED WITH THE PROVISIONS OF SECTION 26 9SS OF THE ACT AND NO PENALTY CAN BE LEVIED U/S 271D&E OF THE ACT. WHEN T HE ASSESSEE IS ABLE TO SUBSTANTIATE THAT THE FUNDS BORROWED AND REPAID FOR THE PURPOSE OF BUSINESS, THE QUESTION OF VIOLATION U/S 269SS & 269 T OF THE ACT DOES NOT ARISE AND CONSEQUENT TO THAT NO PENALTY U/S 271D&E OF THE ACT CAN BE LEVIED. HE RELIED ON THE DECISION OF THE CIT VS. M AA KHODIYAR ITA NO.262&263/VIZAG/2012 JASTI KANNAIAH CHOWDARY, ELURU 5 CONSTRUCTION 365 ITR 0474 (GUJ.) AND SUBMITTED THAT PENALTY MAY BE DELETED. 5. ON THE OTHER HAND, THE LD. D.R. HAS SUBMITTED TH AT IT IS A CLEAR CASE OF VIOLATION U/S 269SS&T OF THE ACT AND THE LD . ADDL. COMMISSIONER AND CIT(A) RIGHTLY IMPOSED PENALTY U/S 271D&E OF TH E ACT. HE FURTHER SUBMITTED THAT THE ASSESSEE HAS FAILED TO SUBSTANTI ATE HIS CASE BEFORE THE AUTHORITIES THAT THE BORROWED FUNDS ARE USED FO R THE PURPOSE OF THE BUSINESS. THEREFORE, IT IS A FIT CASE TO IMPOSE A PENALTY U/S 271D&E OF THE ACT. HE RELIED ON THE DECISION OF THE ITO VS. SUNIL M. KASLIWAL IN ITA NO.362/PN/1995. 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE RECOR DS AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE A SSESSEE IS IN THE BUSINESS OF FERTILIZER CARRYING IN A REMOTE VILLAGE I.E. JEELAKARRAGUDEM. THE ASSESSEE HAS BORROWED CERTAIN FUNDS FROM THREE PERSONS AND REPAID THE AMOUNTS AS FOLLOWS: NAME OF THE PERSON DATE OF ACCEPTANCE AMOUNT ACCEPTED DATE OF REPAYMENT AMOUNT REPAID M. NAVEEN 29.08.2003 40,000/- 09.03.2004 90,000/- M. SINDHUJA 29.08.2003 35,000/- 09.03.2004 85,000/- M. SURYA PRABHA 29.08.2003 34,869/- 09.03.2004 84,869/- TOTAL 1,09,869/- 2,59,869/- ITA NO.262&263/VIZAG/2012 JASTI KANNAIAH CHOWDARY, ELURU 6 6. WHEN THE ADDL. COMMISSIONER ISSUED A NOTICE FOR R EASONS FOR ACCEPTANCE OF LOANS AND REPAYMENT OF THE LOANS MORE THAN PRESCRIBED UNDER THE ACT, IT WAS SUBMITTED THAT BECAUSE OF BUS INESS NECESSITY, THE AMOUNTS WERE BORROWED AND DEPOSITED IMMEDIATELY, TH EREAFTER REPAYMENTS WERE MADE. 7. THE LD. ADDL. COMMISSIONER WAS NOT SATISFIED WIT H THE EXPLANATION GIVEN BY THE ASSESSEE FOR THE REASON THAT THE ASSES SEE HAS NOT UTILIZED THE FUNDS DEPOSITED IN THE BANK IMMEDIATELY. ONLY HE HAS UTILIZED THE FUNDS AFTER 52 DAYS. THEREFORE, THERE IS NO BUSINE SS NECESSITY FOR HIM TO BORROW THE FUNDS AND REPAID THE SAME IMPOSED A PENA LTY U/S 271D&E OF THE ACT. IN APPEAL, THE COMMISSIONER HAS CONFIRMED THE SAME. 8. AFTER CAREFUL CONSIDERATION OF THE ORDERS OF THE AUTHORITIES BELOW, WE FIND THAT THE ASSESSEE IS INTO THE BUSINESS OF F ERTILIZER IN A REMOTE PLACE I.E. JEELAKARRAGUDEM. THE EXPLANATION OF TH E ASSESSEE IS THAT FUNDS ARE BORROWED FOR THE PURPOSE OF BUSINESS NECE SSITY AND BORROWED FUNDS ARE KEPT IN THE BANK. SO FAR AS USAGE OF THE FUNDS ARE CONCERNED, IT IS THE ASSESSEE WHO HAS TO DECIDE IT HAS TO BE W ITHDRAWN IMMEDIATELY OR THEREAFTER ACCORDING TO THE BUSINESS NECESSITIES . THE BUSINESS OF THE ASSESSEE IS RELATING TO AN URORGANISED SECTOR DEALS WITH THE NEEDS OF THE FARMERS. WHEN ASSESSEE HAS TO BUY FERTILIZER TO A H UGE EXTENT DEPEND ITA NO.262&263/VIZAG/2012 JASTI KANNAIAH CHOWDARY, ELURU 7 UPON MONSOON AND NECESSITY OF THE FARMERS ALSO. KE EPING IN THESE ASPECTS ASSESSEE HAS TO CARRY HIS BUSINESS. THERE IS NO DOUBT THAT ASSESSEE IS HAVING A BANK ACCOUNT IN HYDERABAD. HO WEVER, SIMPLY BECAUSE HE IS HAVING A BANK ACCOUNT AT HYDERABAD, I T CANNOT BE SAID THAT HE HAS TO BORROW THE FUNDS IN THE WAY OF CHEQU E OR REPAYMENT ALSO IN THE WAY OF CHEQUE. IT DEPENDS UPON THE BUSINESS NECESSITY OF THE ASSESSEE, THE ASSESSEE HAS TO TAKE A DECISION. THE AUTHORITIES BELOW ADMITTED THAT HE IS INTO THE BUSINESS OF FERTILIZER AND CARRYING HIS BUSINESS IN A REMOTE VILLAGE. THERE IS NOTHING ON RECORD TO DISBELIEVE THE EXPLANATION GIVEN BY THE ASSESSEE. IN SO FAR A S USAGE OF THE FUNDS ARE CONCERNED, IT IS LEFT TO THE ASSESSEE TO DECIDE TO USE THE FUNDS ACCORDING TO THE BUSINESS NECESSITIES/DEMANDS. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE, WE FIND THAT T HERE IS A REASONABLE CAUSE FOR THE ASSESSEE NOT STRICTLY COMPLIED WITH T HE PROVISIONS OF SECTION 269SS OF THE ACT. THEREFORE, THE FUNDS BOR ROWED BY THE ASSESSEE FOR THE BUSINESS NECESSITY MORE THAN THE P RESCRIBED LIMIT NOT AMOUNTING TO VIOLATION U/S 269SS & 269T OF THE ACT. THEREFORE, CONSEQUENTLY NO PENALTY U/S 271D&E OF THE ACT CAN B E IMPOSED. SO FAR AS CASE LAWS RELIED BY THE LD. COUNSEL FOR THE ASSE SSEE IS CONCERNED IN THE CASE OF MAA KHODIYAR CONSTRUCTION LTD. (SUPRA), THE HONBLE GUJARAT HIGH COURT HAS OBSERVED AS UNDER: ITA NO.262&263/VIZAG/2012 JASTI KANNAIAH CHOWDARY, ELURU 8 T RANSACTIONS REFLECTED IN THE ACCOUNTS OF THE ASSESS EE AND THE ADVANCEMENT OF LOAN TO THE ASSESSEE HAD BEEN REFLEC TED IN THE BOOKS OF ACCOUNTS OF THOSE PERSONS FROM WHOM THE LOANS HAD B EEN RECEIVED, THE IDENTITY OF THOSE PERSONS HAS ALSO BEEN WELL ESTABL ISHED. THE ASSESSEE ALSO HAD GIVEN SATISFACTORY REASON FOR TAKING SUCH A LOAN. HIS BONAFIDE BELIEF THAT SUCH A TRANSACTION WOULD NOT ATTRACT PR OVISIONS OF SECTION 269SS OF THE ACT ON THE GROUND THAT THEY WERE AGRIC ULTURISTS AND LIVED IN A REMOTE VILLAGE ALSO ONE OF THE GROUNDS WHICH HAS WAITED WITH BOTH THE AUTHORITIES. NO ERROR HAS BEEN COMMITTED BY BOTH T HE AUTHORITIES BELOW IN DELETING THE PENALTY. IT IS THEREFORE THAT THE RESIDENT HAS INCOME FROM OTHER BUSINESS AND THESE TRANSACTIONS WERE NOT BETW EEN THE AGRICULTURISTS HAVING ONLY AGRICULTURAL INCOME. NO T LIABLE TO TAX WHICH HAVE EXEMPTED FROM SUCH REGOR OF LAW AND YET, THE C AUSE ADVANCED IS THEN FOUND TO BE SUFFICIENT REASONABLE AND NO INTER FERENCE COULD BE DESIRABLE. PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBSERVED EITHER ACTED DELIBERATELY OR DEFICIENT OF LAW OR WAS GUILTY OF CONDUCT CONTUMACIOUS OR DISHONEST OR ACTING IN CONS CIOUS DISREGARD TO ITS APPLICATION. EVEN IF MINIMUM PENALTY IS PRESCR IBED, THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED I N REFUSING TO IMPOSE PENALTY WHEN THEY REJECT TECHNICALLY OR VENIAL BREA CH OF THE PROVISIONS OF THE ACT. WHERE THE BREACH FLOWS FROM BONAFIDE BELIE F THAT THE OFFENDER IS NOT LIABLE TO AND IN THE MANNER PRESCRIBED BY TH E STATUTE. 9. IN THE CASE OF CIT VS. PARMA NAND 266 ITR 256, T HE HONBLE DELHI HIGH COURT HAS CONSIDERED THE SCOPE OF THE PENALTY U/S 271D OF THE ACT AND THE HONBLE DELHI HIGH COURT AFTER CONSIDERING THE ORDER OF THE TRIBUNAL HAS OBSERVED AS UNDER: WHILE AFFIRMING THE SAID ORDER AND HOLDING THAT THE ASSESSEE HAS BEEN ABLE TO PROVE THAT THERE WAS A REASONABLE CAUS E FOR RECEIVING THE MONEY IN CASH, THE TRIBUNAL HAS HELD AS FOLLOWS: FURTHER, WE FIND THAT THERE WAS A REASONABLE CAUS E BECAUSE THE ASSESSEE WAS GOING TO BE DIRECTLY BENEFITED IF THE CHEQUES ISSUED TO HINDUSTAN ENGG. PRODUCTS ARE CLEARED IN TIME, AS TH ERE WAS A DISCOUNT AT 2 PER CENT FOR CASH PAYMENT AGAINST THE BILLS. THE CHEQUES ISSUED BY ITA NO.262&263/VIZAG/2012 JASTI KANNAIAH CHOWDARY, ELURU 9 THE ASSESSEE WERE DATED APRIL 4, 1989; SEPTEMBER, 1 4, 1989; DECEMBER 21, 1989; JANUARY 16, 1990, AND FEBRAURY 20, 1990, AND THE ADVANCES, WHICH WERE RECEIVED BY THE ASSESSEE IN CASH, WERE O N THE DATES NEARING THE DATES OF ISSUE OF THE ABOVESAID CHEQUES. THE P AYMENTS WERE RECEIVED ON APRIL 5, 1989; SEPTEMBER 15, 1989; DECE MBER 22, 1989; JANUARY 17, 1990 AND FEBRUARY 21, 1990, RESPECTIVEL Y. THE LOANS WERE TAKEN BY THE ASSESSEE JUST TO CLEAR THESE CHEQUES I SSUED BY IT, AS THERE WAS NO SUFFICIENT BANK BALANCE WITH THE ASSESSEE. THE AMOUNTS WERE PREPAID THROUGH ACCOUNT PAYEE CHEQUES, THIS IS AN U NDISPUTED FACT. WE FURTHER NOTED THAT BONA FIDE INTENTION OF THE ASSES SEE HAS ALREADY BEEN PROVED BECAUSE THE ASSESSING OFFICER HAS MADE ADDIT IONS UNDER SECTION 68 BY REJECTING THE EXPLANATION OF THE ASSESSEE IN REGARD TO THE GENUINENESS OF THESE LOANS. THE COMMISSIONER OF IN COME-TAX (APPEALS) CONFIRMED THE ADDITIONS. HOWEVER, ALL THESE ADDITI ONS WERE DELETED BY THE TRIBUNAL VIDE ITS ORDER DATED MARCH 10, 1995, I N I.T.A. NO.1365/DELHI OF 1994 FOR THE ASSESSMENT YEAR 1990-91, WHEREIN IT WAS HELD THAT THE BASIS ADOPTED BY THE REVENUE IN MAKING THE IMPUGNED ADDITIONS, I.E., VIOLATION OF THE PROVISIONS OF SECTION 269SS IS WHO LLY UNWARRANTED. ACCORDINGLY, THE IMPUGNED ADDITIONS WERE DELETED. THIS, IN OUR CONSIDERED VIEW, IS A DEFAULT OF VENIAL NATURE AND THE DECISIONS OF THE APEX COURT IN THE CASE OF HINDUSTAN STEEL LTD. V. S TATE OF ORISSA [1972] 83 ITR 26; [1970] 25 STC 211 IS SQUARELY APPLICABLE ON THE FACTS OF THE PRESENT CASE. THEREFORE, IN VIEW OF THESE FACTS AN D CIRCUMSTANCES, WE HOLD THAT PENALTY LEVIED AND CONFIRMED BY THE COMMI SSIONER OF INCOME- TAX (APPEALS) WAS NOT JUSTIFIED. ACCORDINGLY, WE D ELETE THE SAME. THE AFORE-EXTRACTED PORTION OF THE TRIBUNALS ORDER SHOWS THAT THE CONCLUSION OF THE TRIBUNAL THAT THERE WAS A REASONA BLE CAUSE IN NOT STRICTLY COMPLYING WITH THE PROVISIONS OF SECTION 2 69SS OF THE ACT IS BASED ON RELEVANT FACTORS. WE FIND IT DIFFICULT TO HOLD THAT THE VIEW TAKEN BY THE TRIBUNAL IS EITHER PERVERSE OR SO IRRATIONAL THAT NO REASONABLE PERSON, ON THE GIVEN FACTS, WOULD HAVE COME TO THE SAME CONCLUSION. THE FINDINGS RECORDED BY THE TRIBUNAL ARE ESSENTIAL LY FACTUAL GIVING RISE TO NO QUESTION OF LAW MUCH LESS A SUBSTANTIAL QUEST ION OF LAW. THE APPEAL IS ACCORDINGLY DISMISSED. ITA NO.262&263/VIZAG/2012 JASTI KANNAIAH CHOWDARY, ELURU 10 10. IN THE CASE OF CIT VS. RATNA AGENCIES 284 ITR 6 09 THE HONBLE MADRAS HIGH COURT HAS CONSIDERED THE SCOPE OF SECTI ON 271D&E OF THE ACT BY FOLLOWING THE JUDGEMENT OF THE DELHI HIGH CO URT IN THE CASE OF CIT VS. PARAMANANDA (SUPRA) HAS OBSERVED AS UNDER: WHETHER, IN THE FACTS AND UNDER THE CIRCUMSTANCES OF THE CASE, THE APPELLATE TRIBUNAL WAS RIGHT IN HOLDING THAT PE NALTY UNDER SECTIONS 271D AND 271E CANNOT BE IMPOSED FOR VIOLATION OF SE CTIONS 269SS AND 269T? A SIMILAR QUESTION AROSE BEFORE THE DELHI HIGH COUI RT AND WHILE ANSWERING THE QUESTION BY ITS JUDGEMENT REPORTED IN CIT V. PARMA NAND [2004] 266 ITR 255, AFTER EXTRACTING THE RELEVANT P ORTIONS FROM THE ORDER OF THE TRIBUNAL, THE COURT HELD AS UNDER (PAG E 256): THE AFORE-EXTRACTED PORTION OF THE TRIBUNALS ORD ER SHOWS THAT THE CONCLUSION OF THE TRIBUNAL THAT THERE WAS A REASONABLE CAUSE IN NOT STRICTLY COMPLYING WITH THE PROVISIONS OF SECTION 269SS OF THE ACT IS BASED ON RELEVANT FACTORS. WE FIND I T DIFFICULT TO HOLD THAT THE VIEW TAKEN BY THE TRIBUNAL IS EITHER PERVE RSE OR SO IRRATIONAL THAT NO REASONABLE PERSON, ON THE GIVEN FACTS, WOULD HAVE COME TO THE SAME CONCLUSION. THE FINDINGS REC ORDED BY THE TRIBUNAL ARE ESSENTIALLY FACTUAL GIVING RISE TO NO QUESTION OF LAW MUCH LESS A SUBSTANTIAL QUESTION OF LAW. (EMPHASIS SUPPLIED) IN THE CASE ON HAND, THE TRIBUNAL AFTER ENDORSING THE FINDINGS OF THE COMMISSIONER OF INCOME-TAX (APPEALS) THAT THE C ONTRAVENTION ALLEGED AGAINST THE ASSESSEE DID NOT RESULT IN ANY UNACCOUNTED TRANSACTION SUCH AS LENDING AND REPAYMENT AND THAT BOTH THE TRANSACTIONS WERE ENTERED IN THE BOOKS OF THE ASSES SEE AND THE FIGURE INVOLVED WAS ALSO MEAGER AND THAT THE SAME WAS INCU RRED ONLY FOR MEETING THE SUDDEN DEMAND OF OVERDRAFT ACCOUNT, FOU ND THAT THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) IS A WE LL REASONED ONE AND THE SAME DOES NOT SUFFER FROM ANY INFIRMITY REQUIRI NG ANY INTERFERENCE. THE SAID FINDINGS BY THE TRIBUNAL WERE ESSENTIALLY FACTUAL AND NO QUESTION OF LAW MUCH A LESS SUBSTANTIAL QUESTION OF LAW ARISES FOR CONSIDERATION. ITA NO.262&263/VIZAG/2012 JASTI KANNAIAH CHOWDARY, ELURU 11 IN THIS VIEW OF THE MATTER, WE HOLD THAT THERE IS NO REASON WHATSOEVER TO INTERFERE WITH THE FINDINGS OF THE TR IBUNAL THAT THERE WAS REASONABLE CAUSE FOR THE ASSESSEE NOT STRICTLY COMP LYING WITH THE PROVISIONS OF SECTION 269SS OF THE ACT. CONSEQUENTLY, WE ANSWER THE QUESTION IN THE AFFIRM ATIVE AGAINST THE REVENUE AND IN FAVOUR OF THE ASSESSEE, THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS RIGHT I N HOLDING THAT THE PENALTY UNDER SECTIONS 271D AND 271E CANNOT BE IMPO SED FOR VIOLATION OF SECTIONS 269SS AND 269T OF THE ACT. ACCORDINGLY , THE APPEALS ARE DISMISSED. NO COSTS. 11. KEEPING IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE BY FOLLOWING THE JUDICIAL PRECEDENTS, WE ARE OF THE OP INION THAT IN THE PRESENT CASE SECTION 271D AS WELL AS 271E OF THE AC T IS NOT APPLICABLE TO THE FACTS OF THE CASE. SO FAR AS CASE LAWS RELIED BY THE LD. D.R. ARE CONCERNED, NO APPLICATION TO THE FACTS OF THE PRESE NT CASE. 12. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE E ARE ALLOWED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT O N 30 TH SEPT15. SD/- SD/- ( (( ( . . . . ) ( ) ( ) ( ) ( . .. . ) )) ) ( (( ( G. MANJUNATHA) ( (( ( V. DURGA RAO ) )) ) / // / ACCOUNTANT MEMBER / // / JUDICIAL MEMBER /VISAKHAPATNAM: 6 / DATED : 30.9.2015 VG/SPS ITA NO.262&263/VIZAG/2012 JASTI KANNAIAH CHOWDARY, ELURU 12 / - 7 / COPY OF THE ORDER FORWARDED TO :8 1. , / THE APPELLANT SHRI JASTI KANNAIAH CHOWDARY, PROP: RAMAKRISHNA TRADERS, C/O HOTEL ATHIDI, 23A-3-84, ANNAPURNA TOWE RS, GUBBALAVARI STREET, R.R. PET, ELURU-534 002. 2. -., / THE RESPONDENT THE ADDL. CIT, ELURU 3. ; / THE CIT, VISAKHAPATNAM 4. ; () / THE CIT(A), VISAKHAPATNAM 5. -, , / // / DR, ITAT, VISAKHAPATNAM 6 . . . . / GUARD FILE / BY ORDER // TRUE COPY // AB ( SR.PRIVATE SECRETARY ) , / // / ITAT, VISAKHAPATNAM