ACIT, Pondicherry V. Pajani Adaicalam, Pondicherry

ITA 264/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7660 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 2 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2016
• Appeal Filed By: Department
• Bench Allotted: B
• Next Hearing Date: 10-03-2016
• Assessment Year: 2006-2007
• Appeal Filed On: 30-01-2015
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: S SRIDHAR
• Keywords: Reasonable cause
• Section: 273B; 133A; 131; 6; 2

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL B BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , JUDICIAL MEMBER I.T.A.NO S . 2 6 4, 265, 266, 267, 268, 269 & 270/ MDS/2015 ASSESSMENT YEAR S :200 6 - 0 7 TO 2012 - 13 THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE I, D.P. THOTTAM, MUTHIALPET, PUDUCHERY 605 003. VS. SRI M. PAJANI ADAICALAM , NO. 1 15, MUTH IAH MUDALI STREET, MUTHIALPET, PONDICHERRY 605 003. [PAN: AA B P A2573M ] ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI A.V. SREEKANTH, JCIT / RESPONDENT BY : SHRI S. SRIDHAR, ADVOCATE / DATE OF HEARING : 15 . 0 3 .201 6 / DA TE OF P RONOUNCEMENT : 31 . 0 3 .201 6 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : ALL THE SEVEN APPEAL S FILED BY THE REVENUE PERTAIN TO SAME ASSESSEE ARE DIRECTED AGAINST SEPARATE ORDER S OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) V I , CH ENNAI , ALL DATED 14 . 11 .20 1 4 RELEVANT TO THE ASSESSMENT YEAR S 200 6 - 0 7 TO 2012 - 13 . THE ONLY EFFECTIVE GROUND RAISED IN ALL THE APPEAL S RELATES TO DELETION OF PENALTY LEVIED UNDER SECTION 271E OF THE INCOME TAX ACT, 1961 [ ACT IN SHORT] FOR THE ASSESSMENT YE ARS 2006 - 07 TO 2012 - 13 AND FOR THE ASSESSMENT YEAR S 20 06 - 07 AND 2012 - 13 , THE REVENUE I.T.A. NO S . 26 4 TO 2 70 /M/ 15 2 HAS ALSO RAISED THE GROUND WITH REGARD TO DELETION OF PENALTY LEVIED UNDER SECTION 271D OF THE ACT. 2. BRIEF FACTS OF THE CASE ARE THAT A SURVEY UNDER SECTION 133A OF T HE ACT WAS CONDUCTED ON 08.09.2011 IN THE CASE OF SHRI A. KANNAN, PROP. VADAMALAYAN FINANCE, NO. C - 4, II FLOOR, THIYAGARAJA APARTMENT, FIRST MAIN ROAD, THANTHAI PERIYAR NAGAR, PONDICHERRY 605 005. BOOKS OF ACCOUNT AND SUPPORTING DOCUMENTS WERE IMPOUNDED U NDER SECTION 133A(3) OF THE ACT DURING THE COURSE OF SURVEY. THE FINANCE OPERATES FROM THE RESIDENCE OF SHRI A. KANNAN FROM THE ABOVE ADDRESS. THE SURVEY REVEALED THE FOLLOWING FACTS. SHRI A. KANNAN HIMSELF WRITES THE BOOKS OF ACCOUNT FOR THE FINANCE. HIS FINANCE IS NOT LICENSED BY THE STATE GOVERNMENT AUTHORITIES FOR FINANCING ACTIVITIES. HE LENDS MONEY ON PRO - NOTES AND RETURNS THE SAME ON REPAYMENT. HE TAKES THE INTEREST PORTION ON LOAN ON THE DAY OF LENDING AND COLLECTS THE BALANCE IN 10 MONTHLY INSTALME NTS. THIS PERIOD OF COLLECTION MAY B E DELAYED BY LOAN DEBTORS. THE DETAILS OF LOAN DEBTORS ARE ENTERED IN THE PARTY REGISTER CALLED BY NAME 'KISTHI VASOOL LIST BOOK'. THIS BOOK HAS BEEN MAINTAINED AS A SINGLE BOOK FOR THE PERIOD 13.12.1986 TO 22.06.2011 AN D CONTAINS THE FULL HISTORY OF FINANCING OF 24 YEARS. THE PRINCIPAL AMOUNT BORROWED IS ENTERED IN THE RESPECTIVE YEAR AND MONTH. THE REPAYMENTS ARE ENTERED AGAINST EACH DEBTOR IN THE RESPECTIVE DATES AGAINST HIS NAME. A RECEIPT BOOK IS MAINTAINED FOR ISSUI NG OUT RECEIPTS TOWARD REPAYMENTS. BUT THESE RECEIPTS I.T.A. NO S . 26 4 TO 2 70 /M/ 15 3 ARE NOT MADE OUT FOR ALL THE PERSONS AND ALL REPAYMENTS AND THUS ARE SELECTIVE. THE NAME OF THE DEBTOR APPEARS IN THIS RECEIPT BOOK, IF ENTERED. THE DAY BOOK MAINTAINED FROM 16.06.1993 TO 05.09.2011 IS ONE SINGLE BOOK FOR ENTERING THE REPAYMENTS RECEIVED FROM DEBTORS. THE NAME OF THE DEBTORS INVARIABLY FIND PLACE IN THIS BOOK. THESE RECORDS ARE MAINTAINED IN THE HANDWRITING OF SHRI A. KANNAN AND USED FOR MULTIPLE YEARS. DURING THE COURSE OF SURVEY, THE D EPARTMENT HAS NOTICED THAT THE ASSESSEE HAS REPAID LOAN OF .20,00,000/ - IN CASH TO SRI A. KANNAN, THE PROP. OF M/S. VADAMALAYAN FINANCE ON VARIOUS DATES. 3. THUS, NOTICE UNDER SECTION 271E R.W.S. 269T OF THE ACT WAS SERVED ON THE ASSESSEE ON 29 .12.2012. BY RELYING VARIOUS DECISIONS, THE ASSESSEE HAS FILED HIS REPLY BEFORE THE ASSESSING OFFICER. HOWEVER, THE ASSESSING OFFICER HAS NOT ACCEPTED THE EXPLANATION OFFERED BY THE ASSESSEE AND IN THE COURSE OF PENALTY PROCEEDINGS, IT WAS OBSERVED THAT THE ASSESSEE HAS NOT DENIED HAVING TAKEN AND REPAID LOAN IN CASH. IT WAS ALSO NOTICED THAT THE ASSESSEE HAD REPAID THE LOAN TAKEN IN MANY INSTALMENTS WITH AN INTENTIONAL MOTIVE TO DISHONOUR THE LAW. THE ASSESSING OFFICER HAS FURTHER OBSERVED THAT THE LOANS TAKEN AND ITS REPAYMENTS HAVE NOT BEEN ACCOUNTED FOR IN THE REGULAR BOOKS OF ACCOUNTS OF THE ASSESSEE OR FIRM, IN WHICH THE ASSESSEE IS PARTNER AND EVEN IF SO RECORDED NO BUSINESS EXIGENCY AND URGENCY HAVE BEEN ESTABLISHED TO FOLLOW A PROLONGED AND PERSISTENT SYSTEM OF ACCEPTING AND I.T.A. NO S . 26 4 TO 2 70 /M/ 15 4 REPAYING LOANS IN CASH ONLY. THEREFORE, BY RELYING ON VARIOUS DECISIONS, THE ASSESSING OFFICER HAS HELD THAT THE ASSESSEE CANNOT CLAIM TO HAVE ESTABLISHED A REASONABLE CAUSE CONTEMPLATED UNDER SECTION 273B OF THE ACT TO THE SATISFACTION OF ASSESSING AUTHORITY LEVIED PENALTY TO THE EXTENT OF THE SUM EQUAL TO THE AMOUNT OF LOAN REPAID UNDER SECTION 271E OF THE ACT OF .2,00,000/ - FOR THE ASSESSMENT YEAR 2006 - 07 . SIMILARLY, PENALTY UNDER SECTION 271D OF THE ACT TOWARDS RECEIPT OF LOAN IN CASH TO THE EXTENT OF .20,00,000/ - WAS LEVIED FOR THE ASSESSM ENT YEAR 2006 - 07. 4. ON SIMILAR FACTS AND CIRCUMSTANCES, PENALTY UNDER SECTION 271E OF THE ACT TOWARDS REPAYMENT OF LOAN IN CASH TO THE EXTENT OF .24,00,000/ - WAS LEVIED FOR THE ASSESSMENT YEARS 2007 - 08, 2008 - 09, 2009 - 10 AND .6,00,000/ - FOR THE ASSESS MENT YEAR 2010 - 11. PENALTY UNDER SECTION 271D OF THE ACT TOWARDS RECEIPT OF LOAN IN CASH TO THE EXTENT OF .50,00,000/ - WAS LEVIED FOR THE ASSESSMENT YEAR 2012 - 13. 5 . ON APPEAL , AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND BY FOLLOWING THE DECIS ION OF THE COORDINATE BENCH OF THE TRIBUNAL IN ITA NOS. 1905, 1906, 1907 & 1908(MDS)/2013 AND OTHERS DATED 31.10.2013, THE LD. CIT(A) DIRECTED THE ASSESSING OFFICER TO DELETE THE PENALTY LEVIED UNDER SECTION 271E AS WELL AS 271D OF THE ACT. I.T.A. NO S . 26 4 TO 2 70 /M/ 15 5 6 . A GGRIEVED , THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. THE LD. DR HAS RELIED ON THE DECISION OF THE TRIBUNAL IN THE CASE OF SHRI P. MUTHUKARUPPAN V. ACIT IN I.T.A. NOS. 220 TO 228/MDS/2014 DATED 29.05.2014 AS WELL AS DECISION OF THE JURISDICTIONAL HIGH COURT IN T HE CASE OF P. MUTHUKARUPPAN V. JCIT [2015] 375 ITR 243 AND PRAYED THAT THE ORDER OF THE LD. CIT(A) SHOULD BE REVERSED. 7 . ON THE OTHER HAND, T HE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ISSUE INVOLVED IN THIS APPEAL IS COVERED IN FAVOUR OF TH E ASSESSEE BY THE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL IN I.T.A NOS.1905 TO 1908/MDS/2013 AND OTHERS WITH REGARD TO PENALTY UNDER SECTION 271E OF THE ACT AND I.T.A. NOS. 2047 TO 2051/MDS/2013 & OTHERS DATED 22.07.2014 WITH REGARD TO PENALTY U NDER SECTION 271D OF THE ACT. 8 . WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. ON SIMILAR FACTS AND CIRCUMSTANCES IN THE CASE OF SHRI P. MUTHUKARUPPAN V. JCIT TOWARDS LEVY OF PENALTY IN I.T.A . NOS.220, 221, 222, 223, 224, 225, 226, 227 & 228/MDS/2014 FOR THE A SSESSMENT YEARS 2008 - 09, 2009 - 10, 2010 - 11, 2011 - 12 & 2012 - 13 VIDE ITS ORDER DATED 29.05.2014 , THE TRIBUNAL HAS SUSTAINED THE PENALTY LEVIED BY THE ASSESSING OFFICER. AGAINST THE ORDER OF T HE TRIBUNAL, THE ASSESSEE HAS PREFERRED FURTHER APPEALS BEFORE THE HON BLE JURISDICTIONAL HIGH COURT IN THE I.T.A. NO S . 26 4 TO 2 70 /M/ 15 6 CASE OF P. MUTHUKARUPPAN V. JCIT [2015] 375 ITR 243 AND THE HON BLE HIGH COURT HAS OBSERVED AND HELD AS UNDER: 8. WE FIND MORE MERIT IN THE SUBMISS IONS MADE BY THE LEARNED COUNSEL FOR THE RESPONDENT - DEPARTMENT. FOR ANSWERING THE ISSUE, IT WILL BE USEFUL TO EXTRACT SECTIONS 269SS AND 269T OF THE ACT, WHICH READ AS FOLLOWS: '269SS. MODE OF TAKING OR ACCEPTING CERTAIN LOANS AND DEPOSITS. NO PERSON SHA LL, AFTER THR 30 TH DAY OF JUNE, 1984, TAKE OR ACCEPT FROM ANY OTHER PERSON (HEREAFTER IN THIS SECTION REFERRED TO AS THE DEPOSITOR), ANY LOAN OR DEPOSIT OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT IF, - (A) THE AMOUNT OF SUCH LO AN OR DEPOSIT OR THE AGGREGATE AMOUNT OF SUCH LOAN AND DEPOSIT; OR ( B) ON THE DATE OF TAKING OR ACCEPTING SUCH LOAN OR DEPOSIT, ANY LOAN OR DEPOSIT TAKEN OR ACCEPTED EARLIER BY SUCH PERSON FROM THE DEPOSITOR IS REMAINING UNPAID (WHETHER REPAYMENT HAS F ALLEN DUE OR NOT), THE AMOUNT OR THE AGGREGATE AMOUNT REMAINING UNPAID; OR (C) THE AMOUNT OR THE AGGREGATE AMOUNT REFERRED TO IN CLAUSE (A) TOGETHER WITH THE AMOUNT OR THE AGGREGATE AMOUNT REFERRED TO IN CLAUSE (B) IS TWENTY THOUSAND RUPEES OR MORE: P ROVIDED THAT THE PROVISIONS OF THIS SECTION SHALL NOT APPLY TO ANY LOAN OR DEPOSIT TAKEN OR ACCEPTED FROM, OR ANY LOAN OR DEPOSIT TAKEN OR ACCEPTED BY, - (A) GOVERNMENT; (B) ANY BANKING COMPANY, POST OFFICE SAVINGS BANK OR CO - OPERATIVE BANK; (C) ANY CORPORATION ESTABLISHED BY A CENTRAL, STATE OR PROVINCIAL ACT; (D) ANY GOVERNMENT COMPANY AS DEFINED IN SECTION 617 OF THE COMPANIES ACT, 1956 (1 OF 1956); (E) SUCH OTHER INSTITUTION, ASSOCIATION OR BODY OR CLASS OF INSTITUTIONS, ASSOCIATIONS OR BODIES WHICH THE CENTRAL I.T.A. NO S . 26 4 TO 2 70 /M/ 15 7 GOVERNMENT MAY, FOR REASONS TO BE RECORDED IN WRITING, NOTIFY IN THIS BEHALF IN THE OFFICIAL GAZETTE: PROVIDED FURTHER THAT THE PROVISIONS OF THIS SECTION SHALL NOT APPLY TO ANY LOAN OR DEPOSIT WHERE THE PERSON FROM WHOM THE LOAN OR DE POSIT IS TAKEN OR ACCEPTED AND THE PERSON BY WHOM THE LOAN OR DEPOSIT IS TAKEN OR ACCEPTED ARE BOTH HAVING AGRICULTURAL INCOME AND NEITHER OF THEM HAS ANY INCOME CHARGEABLE TO TAX UNDER THIS ACT. EXPLANATION: - FOR THE PURPOSES OF THIS SECTION, - (I) 'B ANKING COMPANY' MEANS A COMPANY TO WHICH THE BANKING REGULATION ACT, 1949 (10 OF 1949), APPLIES AND INCLUDES ANY BANK OR BANKING INSTITUTION REFERRED TO IN SECTION 51 OF THAT ACT; (II) 'CO - OPERATIVE BANK' SHALL HAVE THE MEANING ASSIGNED TO IT IN PART V OF THE BANKING REGULATION ACT, 1949 (10 OF 1949) ; (III) 'LOAN OR DEPOSIT' MEANS LOAN OR DEPOSIT OF MONEY. 269T. MODE OF REPAYMENT OF CERTAIN LOANS OR DEPOSITS. NO BRANCH OF A BANKING COMPANY OR A CO - OPERATIVE BANK AND NO OTHER COMPANY OR CO - OPERATIVE SOCIETY AND NO FIRM OR OTHER PERSON SHALL REPAY ANY LOAN OR DEPOSIT MADE WITH IT OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT DRAWN IN THE NAME OF THE PERSON WHO HAS MADE THE LOAN OR DEPOSIT IF - (A) THE AMOUNT OF THE LOAN OR DE POSIT TOGETHER WITH THE INTEREST, IF ANY, PAYABLE THEREON, OR (B) THE AGGREGATE AMOUNT OF THE LOANS OR DEPOSITS HELD BY SUCH PERSON WITH THE BRANCH OF THE BANKING COMPANY OR CO - OPERATIVE BANK OR, AS THE CASE MAY BE, THE OTHER COMPANY OR CO - OPERATIVE SOC IETY OR THE FIRM, OR OTHER PERSON EITHER IN HIS OWN NAME OR JOINTLY WITH ANY OTHER PERSON ON THE DATE OF SUCH REPAYMENT TOGETHER WITH THE INTEREST, IF ANY, PAYABLE ON SUCH LOANS OR DEPOSITS, IS TWENTY THOUSAND RUPEES OR MORE : PROVIDED THAT WHERE THE REP AYMENT IS BY A BRANCH OF A BANKING COMPANY OR CO - OPERATIVE BANK, SUCH REPAYMENT MAY ALSO BE MADE BY CREDITING THE AMOUNT OF SUCH LOAN OR DEPOSIT TO THE SAVINGS BANK ACCOUNT OR THE CURRENT ACCOUNT (IF ANY) WITH SUCH BRANCH OF THE PERSON TO WHOM SUCH LOAN OR DEPOSIT HAS TO BE REPAID: I.T.A. NO S . 26 4 TO 2 70 /M/ 15 8 PROVIDED FURTHER THAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY TO REPAYMENT OF ANY LOAN OR DEPOSIT TAKEN OR ACCEPTED FROM - (I) GOVERNMENT; (II) ANY BANKING COMPANY, POST OFFICE SAVINGS BANK OR CO - OPERATIVE BANK; (II I) ANY CORPORATION ESTABLISHED BY A CENTRAL, STATE OR PROVINCIAL ACT; (IV) ANY GOVERNMENT COMPANY AS DEFINED IN SECTION 617 OF THE COMPANIES ACT, 1956 (1 OF 1956) ; (V) SUCH OTHER INSTITUTION, ASSOCIATION OR BODY OR CLASS OF INSTITUTIONS, ASSOCIATIO NS OR BODIES WHICH THE CENTRAL GOVERNMENT MAY, FOR REASONS TO BE RECORDED IN WRITING, NOTIFY IN THIS BEHALF IN THE OFFICIAL GAZETTE. EXPLANATION: - FOR THE PURPOSES OF THIS SECTION, - (I) 'BANKING COMPANY' SHALL HAVE THE MEANING ASSIGNED TO IT IN CLAUSE (I) OF THE EXPLANATION TO SECTION 269SS ; (II) 'CO - OPERATIVE BANK' SHALL HAVE THE MEANING ASSIGNED TO IT IN PART V OF THE BANKING REGULATION ACT, 1949 (10 OF 1949) ; (III) 'LOAN OR DEPOSIT' MEANS ANY LOAN OR DEPOSIT OF MONEY WHICH IS REPAYABLE AFTER NOTICE OR REPAYABLE AFTER A PERIOD AND, IN THE CASE OF A PERSON OTHER THAN A COMPANY, INCLUDES LOAN OR DEPOSIT OF ANY NATURE.' 9. THE PROVISIONS OF SECTIONS 269SS AND 269T MANDATE THAT NO AMOUNT SHOULD BE RECEIVED IN CASH IN EXCESS OF THE AMOUNT PRESCRI BED THEREUNDER. THE STATEMENT OF THE FINANCIER PRODUCED BY THE COUNSEL FOR THE DEPARTMENT AND ALSO RELIED UPON BY THE APPELLANT WOULD BE A CASE OF MONEY - LENDING BUSINESS BY THE FINANCIER REPEATEDLY INDULGING IN VIOLATION OF THE PROVISIONS OF SECTIONS 269SS AND 269T OF THE ACT. IT IS ONE THING TO SAY THAT THERE WAS A COMPULSION ON THE PART OF THE FINANCIER. NEVERTHELESS, FACTUALLY WE FIND THAT THE ASSESSEE HAS BEEN TAKING LOAN AND PAYING IT IN CASH IN TOTAL VIOLATION OF THE SAID PROVISIONS. THE TEST IN SO FA R AS NON - LEVY OF PENALTY UNDER SECTIONS 271 D AND 271 E IS ESTABLISHED BY THE DEPARTMENT. FOR INVOKING SECTION I.T.A. NO S . 26 4 TO 2 70 /M/ 15 9 273B THE APPELLANT HAS TO ESTABLISH A REASONABLE CAUSE AND SATISFY THE REQUIREMENT THEREIN. IN THE INSTANT CASE, THE ASSESSING AUTHORITY, THE APPE LLATE AUTHORITY AS WELL AS THE TRIBUNAL FOUND THAT THERE IS NO REASONABLE CAUSE. IN ANY EVENT, BY RECORD THERE IS NO EXPLANATION OFFERED AT THE FIRST INSTANCE BY THE ASSESSEE. IT WAS ARGUED BEFORE THE COMMISSIONER OF INCOME - TAX (APPEALS) THAT THERE WERE SO ME REASONS FOR NOT COMPLYING WITH THE REQUIREMENT OF LAW. IT WAS FOUND THAT THE CONDUCT OF THE ASSESSEE WAS IN BREACH OF THE SAID PROVISIONS ON MORE THAN ONE OCCASION AND THERE WAS NO JUSTIFICATION OF ANY BUSINESS INTEREST OR EXIGENCY TO VIOLATE THE PROVIS IONS OF SECTION 269SS AND SECTION 269T. IT IS NOT GOOD TO SAY THAT THE FINANCIER COMPELLED HIM TO TAKE LOAN BY CASH AND REPAY BY CASH. THAT WOULD NOT JUSTIFY A CASE OF REASONABLE CAUSE. WE WISH TO CLARIFY THAT NONE OF THE DECISIONS CITED BY THE LEARNED COU NSEL FOR THE APPELLANT WOULD SHOW THAT SECTIONS 271D AND 271 E CANNOT BE APPLIED TO THE PRESENT CASE. IN ALL THOSE DECISIONS, THERE WAS AN ELEMENT OF BONA FIDE JUSTIFICATION SHOWN BY THE ASSESSEE IN RESPECT OF THE GENUINENESS OF THE TRANSACTIONS AND THAT T HE SAID TRANSACTIONS WERE NEVER DOUBTED BY THE REVENUE AT ANY POINT OF TIME. 10. BUT, IN THE PRESENT CASE, THE ENTIRE TRANSACTIONS TOOK PLACE IN PONDICHERRY, A MAJOR CITY AND THERE APPEARS TO BE NO REASON AS TO WHY THE ASSESSEE SHOULD NOT HAVE REPAID TH E AMOUNT IN CHEQUE OR DEMAND DRAFT (I.E.) THROUGH BANK, ASSUMING FOR A MOMENT HE RECEIVED THE LOAN IN CASH. THE ENTIRE TRANSACTION BETWEEN THE ASSESSEE, A FINANCIER AND THE FINANCIER, WHO WAS ALSO FINANCING A LARGE NUMBER OF PERSONS, IS APPARENTLY TO EVADE THE PROVISIONS OF THE TAX AUTHORITIES, WHICH CAME TO LIGHT AFTER A SURVEY WAS CONDUCTED AND SOME DOCUMENTS AND RECORDS WERE SEIZED. THEREFORE, IT IS A CASE OF INFRACTION OF LAW AND IT CANNOT BE SAID TO BE A MERE TECHNICAL OR VENIAL BREACH. INDEED, IT IS A CLEAR CASE OF PREJUDICE CAUSED TO THE REVENUE, BECAUSE THE NATURE OF TRANSACTIONS CONDUCTED BY THE FINANCIER WITH THE ASSESSEE AND THIRD PARTIES ARE CLEARLY NOT IN ACCORDANCE WITH THE PROVISIONS OF THE ACT. IN ONE STATEMENT THE FINANCIER CLEARLY STATES TH AT HE USED TO CONDUCT THE MONEY - LENDING BUSINESS IN THE NAMES OF THIRD PARTIES. THE ASSESSEE ON HIS PART HAS BEEN REPEATEDLY, FOR EVERY ASSESSMENT YEAR, CONDUCTED THE BUSINESS IN THE SAME MANNER BY RECEIVING AND REPAYING THE LOAN AMOUNT IN CASH. HENCE, THE SAME CANNOT BE CALLED AS A BONA FIDE TRANSACTION AND THERE IS A REASONABLE CAUSE. AS A MATTER OF FACT, THE CONDUCT OF THE PARTIES IS MORE IMPORTANT TO EXERCISE THE DISCRETION UNDER SECTION 273B OF THE ACT. AS THE ASSESSEE HAS NOT PASSED THE TEST OF REASON ABLE CAUSE SHOWING HIS BONA FIDES, THE PROVISIONS OF SECTION 273B DO NOT GET ATTRACTED, MORE SO, IN A CASE OF NO EXPLANATION OFFERED IN SPITE OF GIVING REPEATED CHANCES THEREFOR. ON THE FACTS IN ISSUE BEFORE I.T.A. NO S . 26 4 TO 2 70 /M/ 15 10 US, THERE APPEARS TO BE NO JUSTIFICATION TO CLAI M THE BENEFIT OF SECTION 273B OF THE ACT. 11. IN THE PRESENT CASE, AS MENTIONED ABOVE, THE APPELLANT HAS BEEN CHARGED FOR VIOLATION OF THE PROVISIONS OF SECTION 269SS AND SECTION 269T OF THE ACT ON THE GROUND THAT WHEN A SURVEY WAS CONDUCTED UNDER SECTI ON 133A IN THE BUSINESS PREMISES OF MR. A. KANNAN, PROPRIETOR OF VADAMALAYAN FINANCE ON OCTOBER 8, 2011, IT WAS FOUND THAT MR. A. KANNAN WAS DOING MONEY - LENDING BUSINESS, WHO CHOSE TO GIVE LOANS TO ONLY SELECTED GROUP OF PERSONS AFTER DEDUCTING INTEREST FO R TEN MONTHS; THAT THE WHOLE TRANSACTION WAS DONE IN CASH ONLY, NAMELY, NO CHEQUE OR DRAFT CAME INTO PLAY; THAT THE APPELLANT WAS ALSO FOUND AS ONE OF THE BORROWERS, AS HE RECEIVED CASH LOAN OF RS. 15 LAKHS ON JUNE 21, 2007, AND THE SAME WAS FOUND TO BE RE PAID IN CASH FOR THE ASSESSMENT YEAR 2008 - 09. FOR THE ASSESSMENT YEAR 2009 - 10, THE APPELLANT RECEIVED RS. 20 LAKHS ON APRIL 23, 2008 AND HE REPAID THE SAME IN CASH. IN THE SAME ASSESSMENT YEAR ON MARCH 7, 2009, HE HAD RECEIVED ANOTHER SUM OF RS. 20 LAKHS B UT THERE IS NO PROOF OF REPAYMENT. FOR THE ASSESSMENT YEAR 2010 - 11, ON JANUARY 9, 2010, HE RECEIVED CASH LOAN OF RS. 20 LAKHS AND HE HAD REPAID THE SAME IN CASH. FOR THE ASSESSMENT YEAR 2011 - 12, THE APPELLANT TOOK CASH LOAN OF RS, 20 LAKHS ON NOVEMBER 3, 2 010, AND HAD REPAID A SUM OF RS. 23 LAKHS IN CASH. AGAIN DURING THE ASSESSMENT YEAR 2012 - 13, HE HAD REPAID A SUM OF RS. 13 LAKHS IN CASH. IN VIEW OF THE ABOVE TRANSACTIONS, THE APPELLANT WAS ISSUED WITH THE SHOW - CAUSE NOTICE UNDER SECTIONS 2710 AND 271E OF THE ACT. THE SWORN STATEMENT RECORDED FROM MR. A. KANNAN, PROPRIETOR OF M/S. VADAMALAYAN FINANCE, IN RESPONSE TO THE SUMMONS ISSUED UNDER SECTION 131 ON SEPTEMBER 21, 2011, SHOWS THAT THE FINANCIER HAS ADMITTEDLY LENT A HUGE AMOUNT OF RS. 74 LAKHS TO VARI OUS PARTIES BY CASH AND HE HAS ALSO ADMITTED THAT HE HAD LENT RS. 2 LAKHS TO THE APPELLANT. WHEN A SPECIFIC QUESTION WAS POSED TO HIM AS TO WHETHER HE WAS DOING THE MONEY - LENDING BUSINESS, BY CHEQUE OR CASH, HE HAS ANSWERED THAT TILL THEN HE HAS BEEN DOING THE MONEY - LENDING BUSINESS ONLY BY CASH PAYMENT AND CASH REPAYMENT. AGAIN, MR. KANNAN, PROPRIETOR OF M/S. VADAMALAYAN FINANCE, HAS ALSO FURTHER ADMITTED THAT HE HAS BEEN DOING MONEY - LENDING BUSINESS FOR THE LAST 30 YEARS. THE APPELLANT HAVING TAKEN LOAN A MOUNT BY CASH IN CONTRAVENTION OF THE PROVISIONS OF SECTION 269SS AND REPAYING THE SAME BY CASH IN CONTRAVENTION OF THE PROVISIONS OF SECTION 269T, CANNOT SEEK THE SUPPORT OF SECTION 273B. THE APPELLANT HAS NOT EXPLAINED AS TO THE URGENCY, COMPULSION OR AN Y OTHER IMPORTANT CIRCUMSTANCE FOR THE BREACH AND THAT TOO REPEATEDLY. AS A MATTER OF FACT, SECTION 273B SHOWS THAT NO PENALTY SHALL BE IMPOSABLE ON THE PERSON OR THE ASSESSEE, AS THE CASE MAY BE, FOR ANY FAILURE REFERRED TO IN I.T.A. NO S . 26 4 TO 2 70 /M/ 15 11 THE SAID PROVISIONS, IF HE P ROVES THAT THERE WAS REASONABLE CAUSE FOR THE SAID FAILURE. IN THE CASE ON HAND, AS MENTIONED ABOVE, WHEN THE APPELLANT WAS ISSUED WITH THE SHOW - CAUSE NOTICE UNDER SECTIONS 271D AND 271E ON DECEMBER 16,2011, HAVING SENT A LETTER DATED JANUARY 11, 2012, SEE KING ADJOURNMENT, WAS ISSUED WITH ANOTHER NOTICE DATED FEBRUARY 1,2012. AGAIN SENDING ANOTHER LETTER DATED FEBRUARY 16,2012, SOUGHT ANOTHER ADJOURNMENT FOR ONE MORE WEEK ON THE GROUND THAT A CLOSE ASSOCIATE AND SENIOR CITIZEN OF HIS COMMUNITY PASSED AWAY O N FEBRUARY 16, 2012. ONCE AGAIN AFTER RECEIVING FRESH NOTICE DATED FEBRUARY 16, 2012, AND ANOTHER NOTICE DATED FEBRUARY 24, 2012, THE APPELLANT FINALLY SENT MR. V. JAYACHANDER, CHARTERED ACCOUNTANT, WHO ALSO FILED ADJOURNMENT LETTER ON JULY 24, 2012. WHEN THE SAID MR. V. JAYACHANDER, CHARTERED ACCOUNTANT APPEARED ON MAY 11, 2012, THEREAFTER, SADLY, NO ONE APPEARED. THAT APART, THE ASSESSEE HAD NOT EVEN FILED ANY REPLY NOR EVEN THE PARTICULARS CALLED FOR VIDE ORDER - SHEET ENTRY DATED MAY 11, 2012, AND LETTER DATED MAY 2, 2012. IN THE ABOVE BACKGROUND, TAKING INTO ACCOUNT THE CONDUCT OF THE ASSESSEE, THE ASSESSING AUTHORITY, AFTER GIVING REPEATED REASONABLE OPPORTUNITIES, FINDING NO EXPLANATION WHATSOEVER, WAS UNABLE TO EXERCISE HIS DISCRETION UNDER SECTION 273 B AND, ACCORDINGLY, IMPOSED THE PENALTY UNDER SECTIONS 271D AND 271E OF THE ACT. THIS FINDING HAS BEEN AFFIRMED BY BOTH THE APPELLATE AUTHORITY AND THE TRIBUNAL. WHEN THE FINDING OF FACTS HAVE BEEN REACHED BY ALL THE AUTHORITIES BELOW, TAKING NOTE OF THE C ONDUCT OF THE APPELLANT, WHO WAS GIVEN SUFFICIENT OPPORTUNITIES BY THE ASSESSING AUTHORITY, WE ARE UNABLE TO ACCEPT THE PRAYER FOR REMANDING THE MATTER TO ANY OF THE AUTHORITIES BELOW. WE ARE ALSO NOT INCLINED TO ACCEPT THE SUBSEQUENT EXPLANATION. 12. O NE ANOTHER ARGUMENT OF MR. S. SRIDHAR, LEARNED COUNSEL FOR THE APPELLANT, PLACING RELIANCE ON THE JUDGMENT OF THIS COURT IN THE CASE OF BALAJI TRADERS (SUPRA), WHICH HELD THAT IF (I) THERE WAS BUSINESS EXIGENCY FORCING THE ASSESSEE TO TAKE CASH LOANS FOR T HE PURPOSE OF HONOURING THE COMMITMENT, VIZ., ISSUANCE OF CHEQUE ON A PARTICULAR DATE; (II) THE CREDITORS WERE GENUINE PERSONS AND THE TRANSACTIONS WERE NEVER DOUBTED BY THE AUTHORITIES BELOW ; AND (III) THERE WAS NO REVENUE LOSS TO THE STATE EXCHEQUER AND SATISFIED THAT THE ASSESSEE HAS SHOWN REASONABLE CAUSE FOR THE ABOVE TRANSACTIONS CAN BE APPLIED TO THIS CASE, IS NOT TENABLE. THE ASSESSEE IN THAT CASE HAD SATISFIED THE AUTHORITY BY SHOWING REASONABLE CAUSE FOR THE ABOVE TRANSACTIONS THAT THERE WAS A BU SINESS EXIGENCY WHICH FORCED THEM TO TAKE CASH LOANS FOR THE PURPOSE OF HONOURING THE COMMITMENT. AS HIGHLIGHTED ABOVE, ILL THE PRESENT CASE, AFTER TAKING REPEATED ADJOURNMENTS BEFORE THE ASSESSING AUTHORITY, THE APPELLANT - ASSESSEE NEITHER CAME FORWARD TO FILE ANY REPLY I.T.A. NO S . 26 4 TO 2 70 /M/ 15 12 NOR EVEN BOTHERED TO TAKE PART IN THE ENQUIRY TO EXPLAIN THE GENUINENESS OF THE TRANSACTION. IN ADDITION THERETO, IN THE CASE ON HAND, AS THE FINANCIER HAS BEEN DOING MONEY - LENDING BUSINESS FOR 30 LONG YEARS BY GIVING AND TAKING BACK LOAN AM OUNTS ONLY THROUGH CASH, THERE HAS BEEN A HUGE REVENUE LOSS TO THE EXCHEQUER. IT IS NOT A CASE OF BUSINESS EXIGENCY. HENCE, THE CONTENTION THAT THERE WAS NO REVENUE LOSS TO THE EXCHEQUER IS NOT TENABLE PLEA. THEREFORE, IN OUR CONSIDERED VIEW, THE SAID JUDG MENT IS NOT APPLICABLE TO THE PRESENT CASE. 13. SIMILARLY, THE JUDGMENT OF THE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF SUNIL KUMAR GOEL (SUPRA) RELIED UPON BY THE LEARNED COUNSEL FOR THE APPELLANT IS ALSO INAPPLICABLE TO THE PRESENT CASE SINCE, IN THE SAID CASE, THE TRIBUNAL REACHED ITS CONCLUSION BY HOLDING THAT A REASONABLE CAUSE WAS SHOWN BY THE ASSESSEE FOR THE FAILURE TO COMPLY WITH THE PROVISIONS OF SECTION 269 T OF THE ACT AT THE VERY FIRST INSTANCE BEFORE THE ASSESSING AUTHORITY. IN THE PRESE NT CASE, AS MENTIONED ABOVE, THE APPELLANT HAS NOT SUBMITTED ANY EXPLANATION WHATSOEVER. SIMILARLY, IN YET ANOTHER JUDGMENT OF THE DIVISION BENCH OF THIS COURT, IN WHICH ONE OF US R. SUDHAKAR J., WHO WAS SPEAKING FOR THE COURT HAS HELD CLEARLY THAT THE ASS ESSEE THEREIN HAD SHOWN REASONABLE CAUSE FOR AVAILING OF LOAN FROM THE AGRICULTURISTS BY PROPERLY PLACING THE GENUINENESS OF THE CREDITORS WHO HAVE BEEN VERIFIED AND THE SAID TRANSACTION BEING FOUND INCAPABLE OF ANY SUSPICION BY THE AUTHORITIES, HENCE, ON THAT SCORE, THIS COURT REFUSED TO INTERFERE WITH THE ORDER OF THE TRIBUNAL, HOWEVER, IN THE PRESENT CASE, AS THERE WAS NO EXPLANATION OFFERED FOR AVAILING OF SUCH A HUGE CASH LOAN TRANSACTION FOR NUMBER OF YEARS. WE HOLD THAT THE CITED JUDGMENT CANNOT BE MADE APPLICABLE TO THE FACTS OF THE PRESENT CASE. 14. FOR ALL THE AFOREMENTIONED REASONS, WE FIND THE PENALTY ORDER AT THE HANDS OF THE ASSESSING AUTHORITY IS IN CONSONANCE WITH LAW. THE SAI D ORDER HAVING BEEN CONFIRMED BY BOTH THE APPELLATE AUTHORITY AND THE TRIBUNAL, DOES NOT CALL FOR ANY INTERFERENCE BY THIS COURT. IN FINE, WE FINDING NO MERITS IN THE APPEALS NO QUESTIONS OF LAW ARISES, MUCH LESS NO SUBSTANTIAL QUESTIONS OF LAW. THESE TAX CASE APPEALS ARE DISMISSED. CONSEQUENTLY, M. P. NOS. 1 OF 2014 ARE ALSO DISMISSED. NO COSTS. 9 . UNDER THE ABOVE FACTS AND CIRCUMSTANCES AND RESPECTFULLY FOLLOWING THE ABOVE DECISION OF THE COORDINATE BENCH OF THE TRIBUNAL AS WELL AS THE DECISION OF THE H ON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF P. I.T.A. NO S . 26 4 TO 2 70 /M/ 15 13 MUTHUKARUPPAN V. JCIT (SUPRA), WE REVERSE THE FINDINGS OF THE LD. CIT(A) IN DELETING THE PENALTY LEVIED UNDER SECTION 271E OF THE ACT TOWARDS REPAYMENT OF LOAN IN CASH FOR THE ASSESSMENT YEARS 2006 - 07, 200 7 - 08, 2008 - 09, 2009 - 10 AND 2010 - 11 AND THE PENALTY UNDER SECTION 271D OF THE ACT TOWARDS RECEIPT OF LOAN IN CASH FOR THE ASSESSMENT YEARS 2006 - 07 AND 2012 - 13. THUS, THE PENALTY LEVIED UNDER SECTION 271D AND 271E OF THE ACT FOR ALL THE ABOVE ASSESSMENT YEAR S ARE CONFIRMED AND THE GROUND RAISED BY THE REVENUE IS ALLOWED FOR ALL THE ASSESSMENT YEARS. 10 . IN THE RESULT, THE APPEAL S FILED BY THE REVENUE FOR ALL THE ABOVE ASSESSMENT YEARS ARE ALLOWED . ORDER PRONOUNCED ON THE 31 ST MARCH, 2016 AT CHENNAI. SD/ - SD/ - ( CHANDRA POOJARI ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 31 . 0 3 .201 6 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.