Income Tax Officer- 2(1), Ujjain V. Smt. Saroj Thakur, Ujjain

ITA 539/Ind/2018

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 1745 (ITAT-INDORE)
• Duration Of Justice: 2 year(s) 8 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2021
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 12-01-2021
• Assessment Year: 2013-2014
• Appeal Filed On: 07-06-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: GIRISH AGRAWAL; NISHA LAHOTI A RS
• Keywords: Income from undisclosed sources; Reasonable cause; Commercial expediency; Set aside
• Section: 273B; 143(3); 271D; 143(2); 13; 68

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE HONBLE KUL BHARAT, JUDICIAL MEMBER AND HONBLE MANISH BORAD, ACCOUNTANT MEMBER ITA NO.539/IND/2018 ASSESSMENT YEAR 2013-14 ITO-2(1), UJJAIN : REVENUE V/S SMT. SAROJ THAKUR, SHOP NO.8, 1 ST FLOOR, D.K. SHAH & ASSOCIATES, GUJARATI SAMAJ, NEW ROAD, UJJAIN PAN : AEFPT2590F : APPELLANT REVENUE BY SHRI HARSHIT BARI, SR.DR ASSESSEE BY SHRI GIRISH AGRAWAL & MISS. NISHA LAHOTI, ARS DATE OF HEARING 1 2 .01.2021 DATE OF PRONOUNCEMENT 16 . 0 2 . 202 1 O R D E R PER MANISH BORAD, A.M THE ABOVE CAPTIONED APPEAL FILED AT THE INSTANCE O F THE REVENUE PERTAINING TO ASSESSMENT YEAR 2013-14 IS DI RECTED AGAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (IN SH ORT LD. CIT], SMT. SAROJ THAKUR ITA NO.539/IND/2018 2 UJJAIN DATED 21.03.2018 WHICH IS ARISING OUT OF TH E ORDER U/S 271D OF THE INCOME TAX ACT 1961(IN SHORT THE ACT) DAT ED 28.07.2017 FRAMED BY JCIT, RANGE-2, UJJAIN. 2. THE SOLE GRIEVANCE RAISED IN THIS APPEAL IS AGAI NST THE FINDING OF LD. CIT(A) DELETING THE PENALTY LEVIED U/S 271D OF THE ACT AT RS.85.98,257/- ON ACCOUNT OF ACCEPTING UNSECURED L OAN ABOVE RS.20,000/- VIOLATING PROVISIONS OF SECTION 269SS O F THE ACT FOR THE ASSESSMENT YEAR 2014-15. 3. BRIEF FACTS OF THE CASE AS CULLED OUT FROM THE R ECORDS ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND BELONGS TO THE AG RICULTURIST FAMILY. SHE RUNS PETROL PUMP. INCOME OF RS.3,65,750/- DECL ARED IN THE INCOME TAX RETURN FILED ON 01.04.2014. CASE SELECT ED FOR SCRUTINY UNDER CASS FOLLOWED BY SERVING OF NOTICES U/S 142(1 ) AND 143(2) OF THE ACT. ASSESSMENT U/S 143(3) OF THE ACT WAS COMP LETED ON 23.3.2016 ASSESSING INCOME AT RS.4,89,850/-. DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS LD. A.O OBSERVED THAT THE AS SESSEE HAS TAKEN CASH LOAN IN EXCESS OF RS.20,000/- FROM VARIO US PERSONS TOTALING TO RS.85,98,257/- THEREBY VIOLATING THE PR OVISIONS OF SMT. SAROJ THAKUR ITA NO.539/IND/2018 3 SECTION 269SS OF THE INCOME TAX ACT GIVING RAISE TO THE LEVY OF PENALTY U/S 271D OF THE ACT. 4. DURING THE PENALTY PROCEEDINGS U/S 271D OF THE A CT THE CONTENTION OF THE ASSESSEE WAS THAT SHE BELONGS TO A AGRICULTURIST FAMILY. SHE WAS GRANTED PERMISSION BY INDIAN OIL CO RPORATION FOR SETTING UP A PETROL PUMP. IN ORDER TO DO SO LOAN W AS REQUIRED TO PURCHASE LAND AT GRAM PAWASA, UJJAIN. SHE APPROACH ED THE SELLER SHRI RAMESH CHAND WHO OWNED THE AGRICULTURE LAND IN THAT AREA. THE SELLER PUT A CONDITION TO RECEIVE THE SALE CONS IDERATION IMMEDIATELY IN CASH. IN ORDER TO PAY THE SALE CONS IDERATION ASSESSEE TOOK UNSECURED LOANS FROM VARIOUS PERSONS FOR THE PURPOSE OF SETTING UP HER BUSINESS OF PETROL PUMP. THE IDENTITY, GENUINENESS AND CREDITWORTHINESS OF THE CASH LOAN H AS NOT BEEN DISPUTED BY THE LD. A.O. THE UNSECURED LOANS WERE TAKEN FOR THE PURPOSE OF BUSINESS AND THERE IS A REASONABLE CAUSE FOR PAYING THE AMOUNT FOR PURCHASE OF LAND WHICH IS EVIDENCED BY T HE REGISTERED DEED AND THUS PENALTY SHOULD NOT BE LEVIED. HOWEVER LD. A.O WAS NOT SATISFIED AND HE LEVIED PENALTY OF RS.85,98,257 /- U/S 271D R.W.S. 269SS OF THE ACT. SMT. SAROJ THAKUR ITA NO.539/IND/2018 4 5. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE LD. C IT(A) AND SUCCEEDED AS LD. CIT(A) PLACING RELIANCE ON VARIOUS DECISIONS CAME TO A CONCLUSION THAT SINCE THERE IS NO ADVERSE FIND ING OF LD. A.O ABOUT THE GENUINENESS AND IDENTITY OF CASH CREDITOR S NOR THERE IS A FINDING THAT THE ASSESSEE ATTEMPTED TO CONCEAL THE INCOME AND ALSO SINCE THE ALLEGED TRANSACTIONS WERE CARRIED OUT IN THE INTEREST OF BUSINESS SO AS TO PURCHASE THE LAND FOR SETTING UP A PETROL PUMP ASSESSEE DESERVES IMMUNITY FOR PAYING THE PENALTY I N TERMS OF SECTION 273B OF THE ACT AS THERE WAS A REASONABLE C AUSE WHICH LEAD TO TAKING CASH LOAN IN EXCESS OF RS.20,000/-. 6. NOW THE REVENUE IS IN APPEAL BEFORE THE TRIBUNAL . 7. LD. DEPARTMENTAL REPRESENTATIVE SUPPORTED THE OR DER OF LD. A.O. 8. PER CONTRA LD. COUNSEL FOR THE ASSESSEE VEHEMENT LY ARGUED APART FROM SUPPORTING THE FINDING OF LD. CIT(A) CIT FINDINGS AND ALSO REFERRING TO THE WRITTEN SUBMISSIONS THROWING LIGHT ON THE LEGISLATIVE INTENT FOR INSERTION OF PROVISIONS OF S ECTION 269SS OF THE ACT, BUSINESS EXIGENCIES FOR ACCEPTANCE OF LOAN BY THE ASSESSEE NO FINDING/DOUBT RAISED BY THE LD. A.O ABOUT THE GENUI NENESS OF THE SMT. SAROJ THAKUR ITA NO.539/IND/2018 5 TRANSACTION OF LOANS TAKEN BY THE ASSESSEE IN CASH AND PLACING RELIANCE OF VARIOUS DECISIONS. RELEVANT EXTRACT OF THE WRITTEN SUBMISSIONS OF LD. COUNSEL FOR THE ASSESSEE IS REPR ODUCED BELOW:- A. LEGISLATIVE INTENT FOR INSERTION OF PROVISIONS O F SECTION 269SS OF THE ACT 1. SECTION 269SS WAS INSERTED BY THE FINANCE ACT, 1 984 WITH EFFECT FROM 1-4-1984 AND WAS MADE OPERATIVE FROM 1-7-1984. 2. THE INCOME-TAX DEPARTMENT IN COURSE OF SEARCH CA RRIED OUT BY THEM FROM TIME TO TIME RECOVERED LARGE AMOUNTS OF UNACCOUNTED CASH FROM CERTAIN TAX- PAYERS AND OFTEN THE TAXPAYERS GAVE EXPLANATION FOR THEIR UNACCOUNTED CASH TO THE EFFECT THAT THEY HAD BORROWED LOANS OR RECEIVED DEPOSITS MADE BY OTHER PERSONS. SOMETIMES, IT WAS NOTICED THAT TH E UNACCOUNTED INCOME WAS ALSO BROUGHT INTO THE BOOKS OF ACCOUNT IN THE F ORM OF LOANS AND DEPOSITS AND LATER THEY WOULD OBTAIN CONFIRMATORY L ETTERS FROM OTHER PERSONS IN SUPPORT OF THEIR EXPLANATION. THE DEPART MENT WAS NOT ABLE TO UNEARTH THE SOURCE OF SUCH UNACCOUNTED CASH. THEREFORE, IN ORDER TO PLUG THE LOOPHOLES AND TO PU T AN END TO THE PRACTICE OF GIVING FALSE AND SPURIOUS EXPLANATION BY TAXPAYE RS, A NEW PROVISION WAS INSERTED IN THE ACT DEBARRING PERSONS FROM TAKI NG OR ACCEPTING FROM ANY OTHER PERSON ANY LOAN OR DEPOSIT OTHERWISE THAN BY ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT, IF THE AMOUNT O F SUCH LOAN OR DEPOSIT OR THE AGGREGATE AMOUNT OF SUCH LOAN OR DEPOSIT IS RS. 10,000 OR MORE. THE AMOUNT OF RS. 10,000 WAS LATER REVISED AS RS. 20,00 0 WITH EFFECT FROM 1.4.1989. ' 3. FROM THE ABOVE IT IS CLEAR THAT PROVISIONS OF SE CTION 269SS WERE INSERTED TO IDENTIFY AND BRING TO TAX THE UNACCOUNTED INCOME OF THE ASSESSEE. SMT. SAROJ THAKUR ITA NO.539/IND/2018 6 PENALTY PROVISIONS U/S 271D WERE ALSO INTRODUCED. 4. IN THE INSTANT CASE NOTHING HAS BEEN BROUGHT ON RECORD BY THE REVENUE AUTHORITIES TO ESTABLISH IF ASSESSEE HAS EARNED ANY UNACCOUNTED INCOME. THE VERY BASIS ON WHICH PROVISIONS OF SECTION 269SS WERE INSERTED ARE NOT ATTRACTED IN THE INSTANT CASE. NO FALSE EXPLANATION WAS GIVEN BY THE ASSESSEE. IT WAS EXPLAINED THAT THE LOAN WAS ACCEP TED IN CASH FOR PURCHASE OF PLOT. THE PLOT WAS REQUIRED TO BE PURC HASED WITHIN TWO MONTHS AS THE LETTER OF INTENT ISSUED BY IOCL DATED 01.11.2012. IMPOSITION OF PENALTY OF RS. 85,98,257 U/S 271D FOR VIOLATION OF PROVISIONS OF SECTION 269SS IS NULL AND VOID. 5. ASSESSEE SUBMITS THAT THE PENALTY OF RS. 85,98, 257 IMPOSED U/S 271D OUGHT TO BE DELETED. B. BUSINESS EXIGENCY FOR ACCEPTANCE OF CASH HAS BEE N ESTABLISHED BY ASSESSEE DURING THE ASSESSMENT PROCEEDINGS, ASSESSEE WAS ASK ED TO PRODUCE LOAN CONFIRMATION LETTERS FROM THE PERSONS TO WHOM LOAN WAS GIVEN AND FROM WHOM UNSECURED LOAN WAS AVAILED. SUMMONS WERE ALSO ISSUED TO THESE PERSONS. RELEVANT DOCUMENTS WERE SUBMITTED BY ASSES SEE. [AO PAGE 2, PB-15 1 ST PARA] PROCEEDINGS WERE COMPLETED U/S 143(3) WHEREIN FOLL OWING TWO ADDITIONS WERE MADE - [AO PAGE 3 PB 16] BANK INTEREST RS. 24,095 LOW HOUSEHOLD EXPENSES RS. 1,00,000 DURING THE IMPUGNED YEAR, ASSESSEE HAD RECEIVED A L ETTER OF INTENT FOR DEALERSHIP AT UJJAIN OF INDIAN OIL CORPORATION LIMI TED (IOCL) DATED SMT. SAROJ THAKUR ITA NO.539/IND/2018 7 01.11.2012. THROUGH THIS LETTER, IT HAS BEEN VERY S PECIFICALLY MENTIONED BY IOCL THAT ASSESSEE IS REQUIRED TO PROCURE THE PARTI CULAR PLOT SURVEY NO. 168/3/1 AND 177/1 IN VILLAGE PANWASA, UJJAIN WITHIN TWO MONTHS FROM THE DATE OF THE LETTER. [PB 31-32] 4. THE SELLERS OF THE PLOT REQUIRED THAT THE PAYMEN T BE MADE IN CASH ONLY THEN ASSESSEE. PURSUANT TO THIS, ASSESSEE ARRANGED FOR THE CASH BY WAY OF TAKING LOAN FROM VARIOUS RELATIVES AND FRIENDS. THE PLOT WAS REGISTERED IN THE NAME OF ASSESSEE ON 02.01.2013 FOR A CONSIDE RATION OF RS. 1,50,00,000. [PB 19-24] IT WAS FOR THE ABOVE MENTIONED BUSINESS EXIGENCY AS COMPELLED BY IDC THROUGH ITS LOL, THAT THE LOAN WAS AVAILED IN CASH DURING THE IMPUGNED YEAR. IN THE ASSESSMENT PROCEEDINGS COMPLETED U/S 143(3), NO ADDITION HAS BEEN MADE ON ACCOUNT OF THE UNSECURED LOAN AVAILED BY THE ASSESSEE. ALL THESE LOANS HAVE BEEN ACCEPTED AS GENUINE TRANSACTI ONS, DULY ACCOUNTED AND CONFIRMED. LD. CIT(A) DELETED THE PENALTY BY HOLDING THAT THE AO DID NOT FIND TRANSACTIONS TO BE NOT GENUINE AND THAT IDENTITY OF THE PAYERS WAS NOT PROVIDED. ALSO, THERE ARE NO FINDING THAT THERE WAS ATTEMPT TO CONCEAL THE INCOME. THERE EXISTED REASONABLE CAUSE UNDER SECTIO N 2736 FOR THE IMPUGNED TRANSACTIONS, DULY SUPPORTED BY DOCUMENTS ON RECORD. [PARA 4.1.1 PAGE 12] RELIANCE IS PLACED ON THE FOLLOWING JUDICIAL PRECED ENTS WHEREIN IT IS HELD THAT NO PENALTY CAN BE IMPOSED U/S 271D AS NO DOUBT HAS BEEN RAISED ON THE GENUINENESS OF THE TRANSACTION SMT. SAROJ THAKUR ITA NO.539/IND/2018 8 HON'BLE APEX COURT IN THE CASE OF KUM. A. B. SHANTH I - (2002] 255 ITR 258 - ORDER PRONOUNCED ON 03.02.2002 HONBLE RAJASTHAN HIGH COURT IN THE CASE OF MAHESHW ARI NIRMAN UDYOG (2008) 170 TAXMAN 502 ORDER PRONOUNCED ON 26.07.2 007 HON'BLE AHMEDABAD BENCH OF ITAT (TM) IN THE CASE OF JITU BUILDERS PRIVATE LIMITED - [2010] 124 ITD 134 - ORDER PRONOUNCED ON 16.07.2009 HON'BLE AHMEDABAD BENCH OF ITAT IN THE CASE OF KAME N JASWANTLAL SHAH - [2012] 19 TAXMANN.COM 99 - ORDER PRONOUNCED ON 10 .02.2012 C. NO FINDING/DOUBT ON THE GENUINENESS OF THE TRANSACT ION AS MENTIONED AT PARA B ABOVE, ASSESSEE EXPLAINED TH E COMMERCIAL EXPEDIENCY FOR ACCEPTANCE OF CASH. NOT EVEN AN IOTA OF DOUBT HAS BEEN RAISED ON THE GE NUINENESS OF THE TRANSACTION. IN THE ASSESSMENT PROCEEDINGS, NO ADDITION HAS BEEN MADE ON ACCOUNT OF THE UNSECURED LOANS AVAILED BY THE ASSESSEE. LD. CIT(A) HELD IN FAVOR OF THE ASSESSEE AS DISCUSS ED IN PARA 4.1.1 AT PAGE 12 OF HIS APPELLATE ORDER. LD. CIT(A) NOTED THAT 'T HERE IS NO FINDING OF THE AO THAT TRANSACTIONS WERE NOT GENUINE AND IDENTITY OF THE PAYERS WAS NOT PROVIDED . ALSO, THERE ARE NO FINDINGS THAT THERE WAS AN ATT EMPT TO CONCEAL THE INCOME . AS DISCUSSED EARLIER, THERE WAS REASONABLE CAUSE FOR ENTERING INTO TRANSACTIONS . IN VIEW OF ABOVE DECISIONS NO PENALTY UNDER SECTI ON 2710 IS LEVIABLE IN ASSESSEE'S CASE.' [EMPHASIS SUP PLIED] RELIANCE IS PLACED ON FOLLOWING JUDICIAL PRECEDENT WHEREIN IT IS HELD THAT NO PENALTY CAN BE IMPOSED IF NO DOUBT RAISED ON THE GE NUINENESS OF THE SMT. SAROJ THAKUR ITA NO.539/IND/2018 9 TRANSACTION - HON'BLE JURISDICTIONAL BENCH OF INDORE ITAT IN THE CASE OF TAPASYA SHIKSHA SAMITI - [2011] 18 ITJ 863 - ORDER PRONOUNC ED ON 15.09.2011 PARA 6 - ' THE TRANSACTION TOOK PLACE DUE TO COMPE LLING SITUATION AS THE ASSESSEE SAMITI WAS SHORT OF FUND AND WAS TO MAKE THE PAYMENT BEFORE 31.3.2007, BEING THE LAST DAY OF THE FINANCIAL YEAR, IT WAS NOT POSSIBLE TO RECEIVE THE AMOUNT THROUGH ACCOUNT PAYEE CHEQUE. EV EN THE LD. ASSESSING OFFICER HAS NEITHER DISPUTED THE SOURCE OF AMOUNT NOR CONTRADICTED THE CLAIM OF THE ASSESSEE. AS THERE IS NO SUCH FINDING IN THE AS SESSMENT ORDER AS WELL AS IN THE IMPUGNED ORDER. IN SUCH A SITUATION, IF THE SCOPE OF SECTION 273B IS ANALYZED, THEN THE LD. ASSESSING OFFICER HAS DIS CRETION NOT TO LEVY PENALTY, ESPECIALLY WHEN THE TRANSACTIO N WAS GENUINE AND THERE WAS A REASONABLE CAUSE OF PAYMENT IN CASH. IN SUCH A SITUATION, THE DECISION OF HON'BLE GAUHATI HIGH COURT IN THE CASE OF SHRI BHAGWATI PD. BAJORIYA (HUF) COMES TO THE RESCUE OF THE ASSESSEE, BECAUSE PRESIDENT OF THE SOCIETY IS A PERSON, WHO IS PART AND PARTIAL OF THE SOCIETY AND AT THE TIME OF NEED, IT IS EXPECTED THAT THE SOCIETY IS HE LPED, ESPECIALLY WHEN THE TRANSACTION WAS NOT IN GENUINE. A HARMONIOUS CONSTRUCTION OF SECTIONS 269SS, 271D AND 273B IS THAT A CONSTRUCTION, WHICH PRESERVE THE EXERCISE OF POWER IN FAVOUR OF ASSESSEE UNDER THE CIRCUMSTAN CES WHICH WARRANT IT IS TO BE RE ERRED TO A CONSTRUCTION WHICH WOULD RESULT TO NON-DENIAL OF RELIEF AND VICE VERSA IS NOT THE INTENTION OF THE L EGISLATURE, OTHERWISE THERE WAS NO NEED TO BRING SECTION 273B ON THE STATUTE, C ONSEQUENTLY, WE DIRECT THE LD. ASSESSING OFFICER TO DELETE THE PENALTY (E MPHASIS SUPPLIED) IN THE INSTANT CASE, NOT EVEN AN IOTA OF DOUBT HAS BEEN RAISED ON THE GENUINENESS OF THE TRANSACTION. REASON FOR ACCEPTAN CE OF CASH IS CONSIDERED TO BE REASONABLE UNDER THE PURVIEW OF SE CTION 273B. PENALTY IMPOSED U/S 271D OUGHT TO BE DELETED. SMT. SAROJ THAKUR ITA NO.539/IND/2018 10 CONSIDERING THE ABOVE FACTS, CIRCUMSTANCES OF THE C ASE, SUBMISSIONS MADE, DOCUMENTS ON RECORD AND JUDICIAL PRECEDENTS, PENALTY IMPOSED U/S 271D OF RS. 85,98,257 OUGHT TO BE DELETED. 9. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US AND CAREFULLY GONE THROUGH THE DEC ISIONS REFERRED AND RELIED BY THE LD. COUNSEL FOR THE ASSESSEE. REV ENUES SOLE GRIEVANCE OF GROUND NO.1 OF THE INSTANT APPEAL IS A GAINST THE FINDING OF LD. CIT(A) DELETING THE PENALTY U/S 271D OF THE ACT AT RS.85,98,257/- LEVIED BY LD. A.O FOR ACCEPTING UNSE CURED LOANS ABOVE RS.20,000/- IN CASH THEREBY MAKING A CLEAR VI OLATION OF PROVISIONS OF SECTION 269SS OF THE ACT. 10. ON THE BASIS OF THE FACTS REFERRED BY THE LOWER AUTHORITIES AND ALSO APPRISED BY THE LD. COUNSEL FOR THE ASSESSEE W E OBSERVE THAT THE ASSESSEE WHO BELONGS TO A AGRICULTURIST FAMILY WAS ABLE TO PROCURE AN APPROVAL OF SETTING UP A PETROL PUMP BY INDIAN OIL CORPORATION LTD FOR WHICH LAND WAS NEEDED. SHE WAS ABLE TO LOCATE A PIECE OF LAND FOR SETTING UP OF THE PETROL PUMP. SALE CONSIDERATION WAS AGREED WITH BOTH THE PARTIES WHICH IS NOT IN DI SPUTE. THE SELLER INSISTED FOR PAYING TOTAL SALE CONSIDERATION IN CAS H. THE DEAL MATERIALIZED AS THE LAND WAS PURCHASED AND DULY REG ISTERED WITH SMT. SAROJ THAKUR ITA NO.539/IND/2018 11 THE REGISTERING AUTHORITY AND THE CONSIDERATION HAS BEEN PAID IN CASH TO THE PAYER AS MENTIONED IN THE REGISTERED D OCUMENT. 11. WE FURTHER OBSERVE THAT THE ASSESSEE IN ORDER T O MAKE THE PAYMENT IN CASH TO THE SELLER OF THE LAND TOOK CASH LOANS OF RS.85,98,257/- FROM VARIOUS PERSONS. EACH OF SUCH LOAN AMOUNT WAS IN EXCESS OF RS.20,000/-. IDENTITY, GENUINENES S AND CREDITWORTHINESS OF THE CASH CREDITOR HAS NOT BEEN QUESTIONED BY THE LD. A.O WHICH SHOWS THAT THE SAME WERE OUT OF T HE PROVISIONS OF SECTION 68 OF THE ACT. HOWEVER SINCE THE LOANS WER E TAKEN IN CASH PENALTY U/S 271D OF THE ACT WAS INITIATED AND SUBSE QUENTLY LEVIED FOR THE CONTRAVENTION OF PROVISIONS OF SECTION 269S S OF THE ACT. 12. THE PENALTY U/S 271D OF THE ACT IS ATTRACTED IF THE ASSESSEE FAILS TO COMPLY WITH THE PROVISIONS OF SECTION 269S S OF THE ACT WHICH READS AS FOLLOWS:- NO PERSON SHALL TAKE OR ACCEPT FROM ANY OTHER PERSO N (HEREIN REFERRED TO AS THE DEPOSITOR), ANY LOAN OR DEPOSIT OR ANY SPECIFIE D SUM, OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT OR USE OF ELECTRONIC CLEARING SYSTEM THROUGH A BANK ACCOUNT, IF, (A) THE AMOUNT OF SUCH LOAN OR DEPOSIT OR SPECIFIED SUM OR THE AGGREGATE AMOUNT OF SUCH LOAN, DEPOSIT AND SPECIFIED SUM; OR (B) ON THE DATE OF TAKING OR ACCEPTING SUCH LOAN OR DEPOSIT OR SPECIFIED SUM, ANY LOAN OR DEPOSIT OR SPECIFIED SUM TAKEN OR ACCEPTED EARLIER BY SUCH PERSON FROM THE DEPOSITOR IS REMAINING UNPAID (WHETHER REPAYMENT SMT. SAROJ THAKUR ITA NO.539/IND/2018 12 HAS 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 REFERRED TO IN CLAUSE (B), IS TWENTY THOUSAND RUPEES OR MORE: THE PROVISIONS OF THIS SECTION SHALL NOT APPLY TO A NY LOAN OR DEPOSIT OR SPECIFIED SUM TAKEN OR ACCEPTED FROM, OR ANY LOAN O R DEPOSIT OR SPECIFIED SUM TAKEN OR ACCEPTED BY, (I) GOVERNMENT (II) ANY BANKING COMPANY, POST OFFICE SAVING BANK O R COOPERATIVE BANK (III) ANY CORPORATION ESTABLISHED BY A CENTRAL, STA TE OR PROVINCIAL ACT. (IV) ANY GOVERNMENT COMPANY AS DEFINED IN CLAUSE (4 5) OF SECTION 2 OF THE COMPANIES ACT, 2013 (V) SUCH OTHER INSTITUTION, ASSOCIATION OR BODY OR CLASS OF INSTITUTIONS, ASSOCIATIONS OR BODIES WHICH THE CENTRAL GOVERNMENT MAY, FOR REASONS TO BE RECORDED IN WRITING, NOTIFY IN THIS BEHALF IN TH E OFFICIAL GAZETTE. PROVIDED FURTHER THAT THE PROVISIONS OF THIS SECTIO N SHALL NOT APPLY TO ANY LOAN OR DEPOSIT OR SPECIFIED SUM, WHERE THE PERSON FROM WHOM THE LOAN OR DEPOSIT OR SPECIFIED SUM IS TAKEN OR ACCEPTED AND T HE PERSON BY WHOM THE LOAN OR DEPOSIT OR SPECIFIED SUM IS TAKEN OR ACCEPT ED, ARE BOTH HAVING AGRICULTURAL INCOME AND NEITHER OF THEM HAS ANY INC OME CHARGEABLE TO TAX UNDER THIS ACT ANALYSIS THIS SECTION GETS APPLICABLE IN FOLLOWING SITUATION AS PER CLAUSE A, B AND C 1. WHERE A PERSON ACCEPTS A TWO CASH LOAN AND/OR DE POSITANY SPECIFIED SUM OF RS.10000 EACH FROM A SINGLE PERSON 2. WHERE A PERSON HAS TAKEN A LOAN OF RS.20,000 BY CHEQUE AND HE WANTS TO TAKE ANOTHER LOAN FROM THE SAME PERSON, SAY FOR RS.3000 3. WHERE A PERSON HAS TAKEN A LOAN OF RS.14000 BY C HEQUE AND HE WANTS TO TAKE FURTHER A LOAN OF RS.6000 OR 8000 THE SECOND PROVISO TO THIS SECTION SHALL NOT BE APP LICABLE IN CASE THE EITHER LENDER OR BORROWER HAVE ANY INCOME OTHER THAN AGRIC ULTURE INCOME OR ANY OF THEM HAVE INCOME CHARGEABLE TO TAX. SO IN OTHER WORDS, BOTH THE LENDER AND DEPOSITOR SHOULD HAVE AGRICULTURE INCOME AND NE ITHER OF THEM SHOULD HAVE ANY INCOME CHARGEABLE TO TAX, THEN THE SECOND PROVISO SHALL APPLY. EXPLANATION.FOR THE PURPOSES OF THIS SECTION, SMT. SAROJ THAKUR ITA NO.539/IND/2018 13 (I) BANKING COMPANY MEANS A COMPANY TO WHICH THE PROVISIONS OF THE BANKING REGULATION ACT, 1949 (10 OF 1949) APPLIES AND INCLUDES ANY BANK OR BANKING INSTITUTION REFERRED TO IN SECT ION 51 OF THAT ACT; (II) CO-OPERATIVE BANK SHALL HAVE THE SAME MEANIN G AS ASSIGNED TO IT IN PART OF THE BANKING REGULATION ACT, 1949 (10 OF 194 9) ; (III) LOAN OR DEPOSIT MEANS LOAN OR DEPOSIT OF MO NEY; (IV) SPECIFIED SUM MEANS ANY SUM OF MONEY RECEIVA BLE, WHETHER AS ADVANCE OR OTHERWISE, IN RELATION TO TRANSFER OF AN IMMOVABLE PROPERTY, WHETHER OR NOT THE TRANSFER TAKES PLACE. 13. IN THE INSTANT CASE THE ALLEGED LOANS HAVE BEEN TAKEN IN CASH AND THERE IS NO DISPUTE WITH REGARD TO THIS FACT AT THE END OF BOTH THE PARTIES. SO WHEN THE LOANS HAVE BEEN TAKEN IN CASH AND THE ASSESSEE HAS FAILED TO COMPLY WITH THE PROVISIONS O F SECTION 269SS OF THE ACT THEN SECTION 271D COMES INTO PICTURE WHI CH PROVIDES FOR A LEVY OF PENALTY FOR A SUM EQUAL TO THE AMOUNT OF LOAN OR DEPOSIT OR TO SPECIFIED SUM SO TAKEN OR ACCEPTED. 14. NOW THE QUESTION COMES THAT UNDER WHAT CIRCUMST ANCES THE PENALTY CANNOT BE IMPOSED AND FOR THIS, CASE OF THE ASSESSEE SHOULD FALLS UNDER THE PROVISIONS OF SECTION 273B OF THE A CT WHICH READS AS FOLLOWS:- 273B. NOTWITHSTANDING ANYTHING CONTAINED IN THE PRO VISIONS OF CLAUSE (B) OF SUB-SECTION (1) OF SECTION 271, SECTION 271A, SE CTION 271AA, SECTION 271B, SECTION 271BA, SECTION 271BB, SECTION 271C, S ECTION 271CA, SECTION 271D, SECTION 271E, SECTION 271F, SECTION 271FA, 99 [SECTION 271FAB,] SECTION 271FB, SECTION 271G, 1[SECTION 271GA,] 2[SE CTION 271GB,] SECTION 271H, 3[SECTION 271-I], 4[SECTION 271J,] CLAUSE (C) OR CLAUSE (D) OF SUB- SECTION (1) OR SUB-SECTION (2) OF SECTION 272A, SUB -SECTION (1) OF SECTION 272AA OR SECTION 272B OR SUB-SECTION (1) OR SUB-SEC TION (1A) OF SECTION SMT. SAROJ THAKUR ITA NO.539/IND/2018 14 272BB OR SUB-SECTION (1) OF SECTION 272BBB OR CLAUS E (B) OF SUB-SECTION (1) OR CLAUSE (B) OR CLAUSE (C) OF SUB-SECTION (2) OF S ECTION 273, NO PENALTY SHALL BE IMPOSABLE ON THE PERSON OR THE ASSESSEE, AS THE CASE MAY BE, FOR ANY FAILURE REFERRED TO IN THE SAID PROVISIONS IF HE PR OVES THAT THERE WAS REASONABLE CAUSE FOR THE SAID FAILURE. 15. FROM GOING THROUGH THE ABOVE SECTION OF 273B OF THE ACT, WE FIND THAT THE PENALTY U/S 271D OF THE ACT CANNOT BE IMPOSED IN CASE THE ASSESSEE PROVES THAT THERE WAS A REASONABLE CAUSE FOR THE SAID FAILURE. IN THE INSTANT CASE THE REASON GIVEN BY THE ASSESSE E IS THAT FOR BUSINESS EXPEDIENCY THE CASH LOAN WERE TAKEN TO PURCHASE THE LAND IN ORDER TO SET UP THE PETROL PUMP ALLOTTED BY INDIAN OIL CORPORATION. IT IS ALSO CONTENDED THAT THE GENUINE NESS OF LOAN IS NOT DISPUTED. 16. WE HOWEVER FIND THAT LD. COUNSEL FOR THE ASSESS EE HAS FAILED TO PROVE THE BUSINESS EXPEDIENCY TO THE EXTENT TO S HOW THAT THERE WAS A REASONABLE CAUSE, LEADING TO FAILURE OF COMPL YING THE PROVISIONS OF SECTION 269SS OF THE ACT. IT IS NOT THE CASE THAT THE PLACE WHERE THE ASSESSEE IS RESIDING HAS NO BANKING FACILITY NOR IT IS DEMONSTRATED THAT ALL THE CASH CREDITORS ARE AGRICU LTURISTS HAVING NO BANKING FACILITY IN THE AREA OF THEIR RESIDENCE. THE ASSESSEE IN THE INSTANT CASE HAS SET UP A PETROL PUMP ALLOTTED BY INDIAN OIL SMT. SAROJ THAKUR ITA NO.539/IND/2018 15 CORPORATION (IN SHORT IOC). ALL THE TRANSACTIONS WITH IOC ARE TO BE CARRIED OUT THROUGH BANKING CHANNEL. IN THE PRESEN T TIMES THE BANK TRANSFERS ARE QUICK THROUGH NATIONAL ELECTRONI C FUNDS TRANSFER (IN SHORT NEFT) WHICH HARDLY TAKES A DAY TO TRANSFER THE AMOUNT. LD. COUNSEL FOR THE ASSESSEE FAILED TO CON TROVERT THIS FACT AND THE GENERAL SUBMISSION THAT THE CASH LOANS WERE TAKEN TO PURCHASE THE LAND FOR SETTING UP A PETROL PUMP AND IS IN THE NATURE OF BUSINESS EXPEDIENCY FAILS TO FIND ANY MERIT. IN OUR VIEW IT WAS NOT A REASONABLE CAUSE FOR THE SAID FAILURE OF TAKING C ASH LOAN EXCEEDING RS.20,000/-. 17. UNDER THESE GIVEN FACTS AND CIRCUMSTANCES OF TH E CASE WE ARE OF THE CONSIDERED VIEW THAT ASSESSEE DO NOT DESERVE ANY IMMUNITY FROM PAYING THE PENALTY U/S 271D OF THE ACT BY TAKI NG THE SHIELD/COVER OF SECTION 273B OF THE ACT CLAIMING IT TO BE A REASONABLE CAUSE FOR THE SAID FAILURE. WE ACCORDIN GLY SET ASIDE THE FINDING OF LD. CIT(A) AND CONFIRM THE ACTION OF THE LD. A.O LEVYING THE PENALTY U/S 271D OF THE ACT AT RS.85,98,257/-. ACCORDINGLY THE SOLE GROUND RAISED BY THE REVENUE STANDS ALLOWED. SMT. SAROJ THAKUR ITA NO.539/IND/2018 16 18. IN THE RESULT APPEAL OF THE REVENUE IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 16.02.2021. SD/- SD/- ( KUL BHARAT) (MANI SH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 16 FEBRUARY, 2021 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE