ITO, New Delhi V. M/s Timeless Infoteck Pvt. Ltd., New Delhi

ITA 3300/DEL/2011

• Counselvise Citation: 330020114 RSA 2011
• Duration Of Justice: 1 year(s) 2 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-09-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 04-09-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 21-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: SANAT KAPOORAR
• Keywords: Reasonable cause
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH 'H' BEFORE SHRI RAJPAL YADAV,JM & SHRI A N PAHUJA,AM ITA NO.3300/DEL./2011 (ASSESSMENT YEAR:-2007-08) ITO WARD-16(4),ROOM NO. 143,CR BUILDING,IP ESTATE, NEW DELHI V/S M/S TIMELESS INFOTECK PVT. LTD.,107,DDA MARKET, PUSHPANJALI, DELHI-110092 [PAN: AA A C T 5048E ] [APPELLANT] [RESPONDENT] ASSESSEE BY :- SHRI SANAT KAPOOR,AR REVENUE BY:- SHRI SANJAY KUMAR JAIN, DR DATE OF HEARING 06-09-2012 DATE OF PRONOUNCEMENT 06-09-2012 O R D E R A N PAHUJA: THIS APPEAL FILED ON 21.6.2011 BY THE REVENUE AGA INST AN ORDER DATED 08-04-2011 OF THE LD. CIT(APPEALS)-X IX,NEW DELHI, FOR THE ASSESSMENT YEAR 2007-08, RAISES THE FOLLOWI NG GROUNDS:- [1] ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY OF ` 7 4,50,100/- IMPOSED U/S 271D OF THE IT ACT ON ACCOUNT OF RECEIPT OF SHARE APPLICATI ON MONEY BY THE ASSESSEE IN CASH BY WRONGLY HOLDING THAT THE PROVIS IONS OF SECTION 269SS OF THE IT ACT ARE NOT APPLICABLE TO RECEIPTS OF SHARE APPLICATION MONEY. [2] THE APPELLANT CRAVES LEAVE FOR RESERVING THE RI GHT TO AMEND, MODIFY, ALTER, ADD OR FORGO ANY GROUND(S) OF APPEAL AT ANY TIME BEFORE OR DURING THE HEARING OF APPEAL . 2. AT THE OUTSET, THE BENCH REJECTED THE REQUEST FOR ADJOURNMENT, AND CONSIDERING THE NATURE OF ISSUE AND FINDINGS OF THE LD. CIT(A), PROCEEDED TO DISPOSE OF THE APPEAL AFTER HEARING BOTH THE PARTI ES. 3. FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE TH AT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ITO WARD-16(3),NEW D ELHI NOTICED THAT THE ASSESSEE RECEIVED THE AMOUNT OF ` 74,50,000/- TOWARDS 2 ITA NO.3300/DEL./2011 2 SHARE APPLICATION MONEY IN CASH FORM M/S SHREYA DEV ELOPWELL (P)LTD. IN CONTRAVENTION OF THE PROVISIONS OF SEC. 269SS OF THE INCOME-TAX ACT, 1961 [HEREINAFTER REFERRED TO AS THE ACT]. I N RESPONSE TO A SHOWCAUSE NOTICE DATED 7.5.2010 U/S 271D OF THE ACT ISSUED BY THE ADDITIONAL CIT, RANGE-16, NEW DELHI, THE ASSESSEE D ID NOT REPLY AND INSTEAD SOUGHT ADJOURNMENT. HOWEVER, THE ASSESSEE DID NOT FURNISH ANY REPLY ON THE ADJOURNED DATE..EVEN THE SUBSEQUEN T NOTICE DATED 22.6.2010 WENT UNRESPONDED..ACCORDINGLY, THE ADDL. CIT IMPOSED A PENALTY OF ` 74,50,000/- U/S 271D OF THE ACT FOR ACCEPTING AFOR ESAID AMOUNT OF SHARE APPLICATION MONEY IN CASH IN VIOLAT ION OF PROVISIONS OF SEC. 269SS OF THE ACT, RELYING, INTER ALIA, UPON THE DECISION IN BHALOTIA ENGG. WORKS PVT. LTD. VS. CIT, 275 ITR 399 (JHARKHAND).. 4 ON APPEAL, THE ASSESSEE CONTENDED THAT THE RECEIP T OF SHARE APPLICATION MONEY WAS NOT DEPOSIT OR LOAN AND RELIE D UPON DECISIONS IN GANESH PROPERTIES P. LTD. VS. CIT (1993) 202 ITR 434 (CAL.); ADIT VS. KUMARI A.B. SHANTI ,255 ITR 487(SC); CIT - VS - RUG MINI RAM RAGAV SPINNERS (P) LTD. (2008) 304 ITR 417 (MAD); AND ITO VS. M/S AVADH RUBBER LTD. (2010) 8 TAXMANN.COM57 (KOL-ITAT). IN THE LIGHT OF THESE DEC ISIONS, THE LD. CIT(A) CONCLUDED AS UNDER: 5. I HAVE GONE THROUGH THE PENALTY ORDER AND THE W RITTEN SUBMISSIONS FILED BY THE AR. 6.1 THE ASSESSEE COMPANY HAD RECEIVED SHARE APPLICA TION MONEY OF RS.74,50,000 IN CASH FROM M/S SHREYA DEVELOPWELL (P) LTD IN THE F.Y.2006-07 RELEVANT FOR A.Y. 2007-08. THE ADDL. CI T, RANGE-16, NEW DELHI IN THE IMPUGNED ORDER OBSERVED THAT SHARE APPLICATION MONEY OF RS.74,50,000 RECEIVED IN CASH IS IN CONTRA VENTION OF PROVISIONS OF 8.26988 AND LEVIED PENALTY U/ S 271D BY RELYING ON THE DECISION IN THE CASE OF BHALOTIA ENGINEERING WORKS (P) LTD VS CIT 275 ITR 399 (JHARKHAND). 6.2 IT IS SEEN FROM THE ORDER THAT THE ASSESSEE COM PANY VIDE REPLY DATED 30-12-2009 (WHICH WAS REPRODUCED IN THE IMPUG NED ORDER AND AS DETAILED IN PARA 3.1 ABOVE) STATED THAT PROV ISIONS OF S.269SS ARE NOT APPLICABLE TO SHARE APPLICATION MON EY RECEIVED IN CASH. 3 ITA NO.3300/DEL./2011 3 6.3 IN THE COURSE OF THESE PROCEEDINGS, THE AR STAT ED THAT IN THE CASE OF CIT VS RUGMINI RAM RAGAV 8PINNERS (P) LTD. (2008) 304 ITR 417 (MAD) IT WAS HELD THAT CONTRIBUTION TOWARDS SHARE APPLICATION DOES NOT AMOUNT TO LOANS OR DEPOSITS AN D AS SUCH ARE NOT COVERED U/ S 26988 OF THE ACT. THE AR HAS FURTH ER DRAWN MY ATTENTION TO THE FOLLOWING DECISIONS: JAGVIJAY AUTO FINANCE P. LTD VS ACIT 52 ITD 504 (JA IPUR) VL8 FOODS (P) LTD VS ADDL. CIT 128 TTJ (DEL) (DO) 1 ITO VS M/S AVADH RUBBER LTD. (2010) 8 TAXMANN.COM 5 7 (KOL- ITAT) 6.4 IN THE CASE OF ITO VS M/S AVADH RUBBER LTD (SUP RA), THE HON'BLE ITAT, KOLKATA, AFTER CONSIDERING THE CASE L AW ON THE ISSUE INCLUDING THE DECISION IN THE CASE OF BHALOTIA ENGI NEERING WORKS (P) LTD VS CIT 275 ITR 399 (JHARKHAND), HAS HELD THAT T HE PROVISIONS OF S.269-SS ARE NOT APPLICABLE TO SHARE APPLICATION MO NEY. THE DECISION OF HON'BLE ITA T ARE AS UNDER: 'IN THE LIGHT OF THE FACTS OF THIS CASE AND THE LEG AL POSITION ON THIS ISSUE AND IN ABSENCE OF ANY JUDGMENT OF HON'BLE APPEX COU RT OR OF HON'BLE JURISDICTIONAL HIGH COURT ON THE ISSUE BEFORE US, W E ARE OF THE CONSIDERED OPINION THAT THE CONTRIBUTION TOWARDS SHARE APPLICA TION MONEY RECEIVED IN CASH FROM SRI ABHISEK SARAF IN THE SUM OF RS.3 LACS DOES NOT COME WITHIN THE SCOPE AND AMBIT OF EXPRESSION 'DEPOSIT' APPEARI NG IN THE PROVISIONS OF S.269SS IN ORDER TO JUSTIFY THE LEVY OF PENALTY U/S 27LD AND HENCE THE LD. CIT(A) WAS CORRECT IN LAW IN DELETING PENALTY U/S 2 7LD OF RS.3 LACS IN THE CIRCUMSTANCES OF THE CASE AND AFTER DUE DELIBERATIO N, WE ARE INCLINED TO UPHOLD THE SAME' 6.5 THERE IS NO DISPUTE ON THE FACTS IN QUESTION I. E RECEIPT OF SHARE APPLICATION MONEY OF RS.74,50,000/- FROM M/S SHREYA DEVELOPWELL (P) LTD. AS DISCUSSED ABOVE, THE PROVISIONS OF S.26 9SS ARE NOT APPLICABLE TO THE SHARE APPLICATION MONEY. IN VIEW OF THE FACTS BROUGHT ON RECORD AND THE LEGAL POSITION AVAILABLE AS ON DATE, THERE IS NO SCOPE FOR LEVY OF PENALTY IN RESPECT OF SHARE APPLICATION MONEY OF RS.74,50,000/- RECEIVED IN CASH FROM M/S SHREYA DEVELOPWELL (P) LTD. ACCORDINGLY, THE PENALTY OF RS.74,50,000/-LEVI ED U/S 271D IS HEREBY DELETED. 6.6 THE OTHER CONTENTION OF THE AR IS THAT THERE IS REASONABLE CAUSE FOR ACCEPTING THE SHARE APPLICATION MONEY IN CASH. ACCORDING TO THE AR THE REASONABLE CAUSE IS THE IMMEDIATE REQUIREMEN T OF FUNDS TO 4 ITA NO.3300/DEL./2011 4 PURCHASE LAND TO TAKE ADVANTAGE OF THE SITUATION. SINCE THE MAIN GRIEVANCE OF THE APPELLANT IS DECIDED IN FAVOUR OF THE APPELLANT, THERE IS NO NEED TO ADDRESS THE ISSUE OF REASONABLE CAUSE FOR ACCEPTING THE AMOUNT IN QUESTION IN CASH. IN THE RESULT, THE APPEAL IS ALLOWED. 5. THE REVENUE IS NOW IN APPEAL BEFORE US AGAINST THE AFORESAID FINDINGS OF THE LEARNED CIT(A). THE LEARNED DR SUPP ORTED THE ORDER OF ADDL. CIT WHILE RELYING UPON DECISION IN BHALOTI A ENGG. WORKS PVT. LTD.(SUPRA) WHILE THE LD. AR RELIED UPON THE FINDI NGS IN THE IMPUGNED ORDER.. 6. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUG H THE FACTS OF THE CASE. BEFORE PROCEEDING FURTHER, WE MAY HAVE A LOOK AT THE RELEVANT PROVISIONS OF SEC. 269SS OF THE ACT, WHI CH READ AS UNDER: ' NO PERSON SHALL, AFTER THE 30TH DAY OF JUNE, 1984 , TAKE OR ACCEPT FROM ANY OTHER PERSON (HEREAFTER IN THIS SECTION RE FERRED TO AS THE DEPOSITOR), ANY LOAN OR DEPOSIT OTHERWISE THAN BY A N ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT IF,- (A) THE AMOUNT OF SUCH LOAN OR DEPOSIT OR THE AGGRE GATE 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 HA S FALLEN 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 RE FERRED TO IN CLAUSE (B), IS TWENTY THOUSAND RUPEES OR MORE: .. EXPLANATION: FOR THE PURPOSE OF THIS SECTION, (III) 'LOAN OR DEPOSIT' MEANS LOAN OR DEPOSIT OF MO NEY.' 6.1 THE AFORESAID PROVISIONS OF S. 269SS SAY TH AT IF THE STIPULATED AMOUNT OF LOAN OR DEPOSIT IS ACCEPTED OTHERWISE TH AN BY CROSSED CHEQUE OR ACCOUNT PAYEE BANK DRAFT, THERE IS A VIOL ATION OF THE SAID PROVISIONS. IN THE CASE UNDER CONSIDERATION, THE L D. CIT(A) WHILE CANCELLING THE PENALTY LEVIED U/S 271D OF THE ACT CONCLUDED THAT 5 ITA NO.3300/DEL./2011 5 THE AFORESAID AMOUNT OF ` 7 4,50,000/- ACCEPTED IN CASH IS NOTHING BUT SHARE APPLICATION MONEY AND ACCORDINGLY WHILE R EFERRING TO DECISIONS RELIED UPON BY THE ASSESSEE, CANCELLED TH E PENALTY. AS IS APPARENT FROM THE ORDER OF ADDL. CIT, THERE IS NOTH ING ON RECORD TO SHOW THAT THESE TRANSACTIONS WERE ATTACHED WITH CER TAIN CONDITIONS OR STIPULATION AS TO PERIOD OF REPAYMENT, RATE OF I NTEREST, MANNER OF REPAYMENT, ETC. SO AS TO TREAT THE SAID TRANSACTION S AS DEPOSITS. THE REVENUE HAVE NOT PLACED BEFORE US ANY MATERIAL SUGG ESTING THAT THE TRANSACTION WAS ACTUALLY IN THE NATURE OF LOANS OR DEPOSIT. SINCE THERE IS NOTHING ON RECORD TO SUGGEST THAT THE TRAN SACTION IS IN THE NATURE OF LOAN OR DEPOSIT, APPARENTLY, THE PROVISIO NS OF SECTION 269SS ARE NOT ATTRACTED. THE MEANING OF 'DEPOSIT ' AND ' LOAN ' HAS BEEN EXPLAINED ON PAGE 8454 OF THE CHATURVEDI AND PITHISARIA'S INCOME-TAX LAW. FIFTH EDITION, VOLUME 5, AS UNDER: ' 'DEPOSIT' AND 'LOAN'- THESE TWO ARE NOT IDENTICAL IN MEANING. - IT IS TRUE THAT BOTH IN THE CASE OF A LOAN AND IN THE CAS E OF A DEPOSIT THERE IS A RELATIONSHIP OF A DEBTOR AND A CREDITOR BETWEE N THE PARTY GIVING MONEY AND THE PARTY RECEIVING MONEY. BUT IN THE CAS E OF A DEPOSIT, THE DELIVERY OF MONEY IS USUALLY AT THE INSTANCE OF THE GIVER AND IT IS FOR THE BENEFIT OF THE PERSON WHO DEPOSITS THE MONE Y - THE BENEFIT NORMALLY BEING EARNING OF INTEREST FROM A PARTY WHO CUSTOMARILY ACCEPTS DEPOSITS. DEPOSITS COULD ALSO BE FOR SAFE-K EEPING OR AS A SECURITY FOR THE PERFORMANCE OF AN OBLIGATION UNDER TAKEN BY THE DEPOSITOR. IN THE CASE OF A LOAN, HOWEVER, IT IS TH E BORROWER AT WHOSE INSTANCE AND FOR WHOSE NEEDS THE MONEY IS ADVANCED. THE BORROWING IS PRIMARILY FOR THE BENEFIT OF THE BORRO WER ALTHOUGH THE PERSON WHO LENDS THE MONEY MAY ALSO STAND TO GAIN T HEREBY BY EARNING INTEREST ON THE AMOUNT LENT. ORDINARILY, TH OUGH NOT ALWAYS, IN THE CASE OF A DEPOSIT, IT IS THE DEPOSITOR WHO IS T HE PRIME MOVER WHILE IN THE CASE OF A LOAN, IT IS THE BORROWER WHO IS THE PRIME MOVER. THE OTHER AND MORE IMPORTANT DISTINCTION IS IN RELATION TO THE OBLIGATION TO RETURN THE AMOUNT SO RECEIVED. IN THE CASE OF A DEPOSIT WHICH IS PAYABLE ON DEMAND, THE DEPOSIT WOULD BECOM E PAYABLE WHEN A DEMAND IS MADE. IN THE CASE OF A LOAN, HOWEV ER, THE OBLIGATION TO REPAY THE AMOUNT ARISES IMMEDIATELY O N RECEIPT OF THE LOAN. IT IS POSSIBLE THAT IN CASE OF DEPOSITS WHICH ARE FOR A FIXED PERIOD OR LOANS WHICH ARE FOR A FIXED PERIOD, THE P OINT OF REPAYMENT MAY ARISE IN A DIFFERENT MANNER. BUT BY AND LARGE, THE TRANSACTION OF A LOAN AND THE TRANSACTION OF MAKING A DEPOSIT ARE NOT ALWAYS CONSIDERED IDENTICAL. ' 6 ITA NO.3300/DEL./2011 6 6.11 IN THE LIGHT OF AFORESAID DISTINCTION BETWEE N LOAN AND DEPOSIT, ESPECIALLY WHEN THERE IS NOTHING TO SUGGEST IN THE CASE UNDER CONSIDERATION THAT THE AFORESAID TRANSACTION IS I N THE NATURE OF DEPOSIT, WE ARE OF THE OPINION THAT PROVISIONS OF S EC. 269SS ARE NOT ATTRACTED IN THIS CASE. 6.2 WE FIND THAT THE ADDL. CIT RELIED U PON DECISION IN M/S BHALOTIA ENGINEERING WORKS PVT. LTD. (SUPRA) WHEREIN IT WAS HELD THAT RECEIPT OF SHARE APPLICATION MONIES IN CASH, IN VIOLATION OF PROVISI ONS OF SECTION 269SS OF THE ACT SHOULD BE TREATED AS DEPOSIT WITH THE CONSEQUENCE THAT THE ASSESSEE WOULD BE LIABLE FOR PENALTY UNDER SECTION 271D OF THE ACT. THE AO IN THE SAID CASE DID NOT EXAMINE WHETHER THE SHARE APPLICATION MONEY CAN BE TREATED AS LOAN OR DEPOSIT WITHIN THE MEANING OF PROVISIONS OF SEC. 269SS OF THE ACT NOR THE ADDL. CIT. THE LD. CIT(A) FOUND AS A FACT THAT THE SHARES WERE SUBSEQUENTLY ALLOTTED TO THE APPLICANT-COMPANIES AS SHOWN BY THE FORM FILED BEFORE THE REGISTRAR OF COMPANIES. IN THE INSTANT CASE, THE AO DID NOT EVE N ATTEMPT TO EXAMINE AS TO WHETHER OR NOT THE SHARE APPLICATION MONEY CAN BE T REATED AS LOAN OR DEPOSIT WITHIN THE MEANING OF PROVISIONS OF SEC. 269SS OF T HE ACT. NEITHER THE AO NOR THE ADDITIONAL CIT TOOK THE TROUBLE TO EXAMINE THIS ASP ECT WHILE IMPOSING THE PENALTY AND MERELY RELIED ON THE JUDGMENT OF THE HONBLE J HARKHAND HIGH COURT (SUPRA). THERE IS NOTHING ON RECORD TO SHOW THAT THESE TRANS ACTIONS WERE ATTACHED WITH CERTAIN CONDITIONS OR STIPULATION AS TO PERIOD OF REPAYMENT, RATE OF INTEREST, MANNER OF REPAYMENT, E TC. SO AS TO TREAT THE SAID TRANSACTIONS AS LOANS OR ADVANCES. MOREOVE R, THE REVENUE HAVE NOT PLACED BEFORE US ANY MATERIAL, SUGGESTING THAT THE TRANSACTIONS WERE ACTUALLY IN THE NATURE OF LOANS OR DEPOSITS. IN THESE CIRCUMSTANCES, THE RELIANCE ON THE DECISION I N M/S BHALOTIA ENGINEERING WORKS PVT. LTD. (SUPRA),IN OUR OPINION, IS TOTALLY MISPLACED. HONBLE MADRAS HIGH COURT IN CIT VS. RUGMINI RAM RAGAV SPINNERS PRIVATE LTD. (2008), 304 ITR 417 HELD THAT THE MONEY RECEIVED IN CASH BY A COMPANY TOWARDS ALLOTMENT OF SHARES, WAS NEITHER A LOAN NOR A DEPOSIT. IN BAIDYA NATH PL ASTIC INDUSTRIES (P) LTD. AND ORS VS K.L. ANAND (1998) 230 ITR 522, HONBLE DELHI HIGH COURT POINTED OUT THE DISTINCTION BETWEEN A LOAN AND A DEPOSIT WHILE OBSE RVING THAT IN THE CASE OF THE 7 ITA NO.3300/DEL./2011 7 FORMER IT IS ORDINARILY THE DUTY OF THE DEBTOR TO S EEK OUT THE CREDITOR AND TO REPAY THE MONEY ACCORDING TO THE AGREEMENT WHILE IN THE C ASE OF A DEPOSIT IT IS GENERALLY THE DUTY OF THE DEPOSITOR TO GO TO THE BA NKER OR TO THE DEPOSITEE, AS THE CASE MAY BE, AND MAKE A DEMAND FOR IT. THIS JUDGMEN T WAS CITED IN DIRECTOR OF INCOME TAX (EXEMPTION) VS ACME EDUCATIONAL SOCIETY (2010) 326 ITR 146 (DEL) AND IT WAS HELD THAT A LOAN GRANTS TEMPORARY USE OF MONEY, OR TEMPORARY ACCOMMODATION, AND THAT THE ESSENCE OF A DEPOSIT IS THAT THERE MUST BE A LIABILITY TO RETURN IT TO THE PARTY BY WHOM OR ON WHOSE BEHAL F IT HAS BEEN MADE, ON FULFILLMENT OF CERTAIN CONDITIONS. IN CIT VS. SUNIL CHOPRA, HONBLE JURISDICTIONAL HIGH COURT IN THEIR DECISION DATED 27.4.2010 IN ITA NO.106 OF 2011 HELD THAT SHARE APPLICATION MONEY COULD NOT BE CONSTRUED AS L OAN OR ADVANCE WITHIN THE MEANING OF SEC. 2(22)(E) OF THE ACT. IN CIT VS. I.P. INDIA PVT. LTD., HONBLE JURISDICTIONAL HIGH COURT IN THEIR DECISION DATED 2 1.11.2011 IN ITA NO. 1192/2011 CONCLUDED THAT THE RECEIPT OF SHARE APPLICATION MON IES FOR ALLOTMENT OF SHARES IN THE ASSESSEE-COMPANY COULD NOT BE TREATED AS RECEIP T OF LOAN OR DEPOSIT. IN THE LIGHT OF VIEW TAKEN BY THE HONBLE JURISDICTIONAL H IGH COURT IN THE AFORESAID DECISIONS, ESPECIALLY WHEN THE LD. CIT(A) FOUND AS A FACT THAT THE AMOUNT OF ` 7 4,50,000/- WAS INDEED RECEIVED BY THE ASSESSEE FROM THE AFORESAID COMPANY M/S SHREYA DEVELOPWELL (P)LTD. AS SHARE APPLICATION MONEY, WE ARE NOT INCLINED TO INTERFERE WITH THE FINDINGS OF THE LD. CIT(A). 6.3. WE MAY POINT OUT THAT THE PROVISIONS OF SECTION 269SS WERE BROUGHT IN THE STATUTE BOOK TO COUNTER THE EVA SION OF TAX IN CERTAIN CASES, AS CLEARLY STATED IN THE HEADING OF CHAPTER XXB OF THE ACT WHICH READS 'REQUIREMENT AS TO MODE OF ACCEPTAN CE, PAYMENT OR REPAYMENT IN CERTAIN CASES TO COUNTERACT EVASION OF TAX'. THE LEGISLATIVE INTENTION IN BRIN GING SECTIONS 269SS & 269T IN THE ACT WAS TO AVOID CERTAIN CIRCUM STANCES OF TAX EVASION, WHEREBY HUGE TRANSACTIONS ARE MADE OUTSIDE THE BOOKS OF ACCOUNT BY WAY OF CASH. AS FAR AS THIS APPEAL BEFOR E US IS CONCERNED, THERE IS NO CASE AGAINST THE ASSESSEE TH AT THE TRANSACTION HAD ANYTHING TO DO WITH EVASION OF TAX OR CONCEALMENT OF INCOME. IN CIT V. SAINI MEDICAL STORE [2005] 277 IT R 420,HONBLE 8 ITA NO.3300/DEL./2011 8 PUNJAB AND HARYANA HIGH COURT HELD THAT BONA FIDES AND GENUINENESS OF THE TRANSACTION WOULD CONSTITUTE A ' REASONABLE CAUSE' FOR NOT INVOKING THE PROVISIONS OF SECTIONS 271D OF THE ACT. HONBLE HIGH COURT INTER ALIA, HELD AS UNDER: 'AS POINTED OUT EARLIER, THERE IS NO DOUBT ABOUT TH E GENUINENESS OF THE TRANSACTIONS WHICH HAVE BEEN FULLY ACCEPTED IN THE ASSESSMENT MADE FOR THE YEAR UNDER CONSIDERATION. EVEN IF, THE RE IS ANY IGNORANCE, WHICH RESULTED IN THE INFRACTION OF LAW, THE DEFAULT IS TECHNICAL AND VENIAL WHICH DID NOT PREJUDICE THE IN TERESTS OF THE REVENUE AS NO TAX AVOIDANCE OR TAX EVASION WAS INVO LVED. TO MY MIND, BONA FIDE BELIEF COUPLED WITH THE GENUINENESS OF THE TRANSACTIONS WOULD CONSTITUTE REASONABLE CAUSE UNDE R SECTION 273B FOR NOT INVOKING THE PROVISIONS OF SECTION 271E OF THE ACT. THE IMPUGNED ORDER OF PENALTY IS CANCELLED. 6.4 THERE IS ANOTHER ASPECT OF THE MATTER. IN THE CASE OF BOMBAY CONDUCTORS & ELECTRICALS LTD. VS. DCIT,56 TTJ 580(AHD.), THE TRI BUNAL FOUND THAT THERE WAS NO EVIDENCE ON RECORD TO SHOW THAT INFRACTION OF THE P ROVISIONS WAS WITH THE KNOWLEDGE OR IN DEFIANCE OF THE PROVISIONS. IT WAS FURTHER FOUND THAT THERE WAS NOTHING ON RECORD TO INDICATE THAT THE ASSESSEE HAD INDULGED IN ANY TAX PLANNING OR TAX EVASION AND IF AT ALL THERE WAS A VIOLATION , IT WAS MERE VENIAL OR TECHNICAL. THIS DECISION OF THE ITAT HAS BEEN UPHELD BY HONBL E JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. BOMBAY CONDUCTORS & ELECTRICAL S LTD, 301 ITR 328(GUJ). IN THE CASE UNDER CONSIDERATION ALSO, THERE IS NOTHING ON RECORD, SUGGESTING ANY TAX PLANNING OR INFRACTION OF RELEVANT PROVISIONS WITH MALAFIDE INTENTION. 7. IN VIEW OF THE FOREGOING, AND IN THE L IGHT OF VIEW TAKEN IN THE AFORESAID DECISIONS, WE HAVE NO ALTERNATIVE BUT TO CONCLUDE THAT IT IS NOT A FIT CASE FOR IMPOSITION OF PENALTY UNDER SECTION 271D FOR VIOLATION OF PROVISIONS OF SECTION 269SS OF THE ACT. THEREFORE, BOTH IN LAW AS WELL AS ON FACTS, WE FIND THAT IMPO SITION OF PENALTY UNDER SECTION 271 D OF THE ACT WAS NOT IN ORDER A ND THE LD. CIT(A) WAS RIGHT IN CANCELLING THE PENALTY. THEREFORE, G ROUND NO.1 IN THE APPEAL IS DISMISSED.. 9 ITA NO.3300/DEL./2011 9 8. NO ADDITIONAL GROUND HAVING BEEN RAISED BEFORE US IN TERMS OF RESIDUARY GROUND NO.2 IN THE APPEAL, ACCORDINGLY, T HIS GROUND IS DISMISSED. 9. NO OTHER PLEA OR ARGUMENT WAS MADE BEFORE US. 10. IN THE RESULT, APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE COURT TODAY ON 6.9.2012 SD/- SD/- ( RAJPAL YADAV ) JUDICIAL MEMBER (A N PAHUJA) ACCOUNTANT MEMBER DATED : 6-09-2012 COPY OF THE ORDER FORWARDED TO: 1. M/S TIMELESS INFOTECK PVT. LTD.,107,DDA MARKET, PUSHPANJALI, DELHI-110092 2. ITO WARD-16(4),ROOM NO. 143,CR BUILDING,IP ESTAT E, NEW DELHI 3. CIT CONCERNED 4. CIT(APPEALS)-XIX,NEW DELHI 5. DR, ITAT, DELHI BENCH-H,NEW DELHI 6. GUARD FILE BY ORDER DEPUTY REGISTRAR ASSISTANT REGISTRAR ITAT, DELHI