ITO, Virudhunagar V. S.Arun Kumar, Rajapalayam

ITA 95/CHNY/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4246 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-06-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 06-06-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 12-01-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K RAVI IRS
• Assessee Lawyers: S VIDYA
• Keywords: Audit objection; Period of limitation; Initiation of penalty proceedings; Reasonable cause
• Section: 273B; 143(3); 68; 27

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, B B ENCH, CHENNAI , ! ' ! # . $% , &'( BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU R.L. REDDY, JUDICIAL MEMBER ./I.T.A. NO. 95/MDS/2017 & ) *) / ASSESSMENT YEAR : 2009-2010. THE INCOME TAX OFFICER, WARD 1, VIRUDHUNAGAR, VS. SHRI. S. ARUN KUMAR, 243, MADASAMY KOIL STREET, RAJAPALAYAM 626 117. [PAN AMEPA 5855B] (APPELLANT) (RESPONDENT) +, - . /APPELLANT BY : SHRI. K. RAVI, IRS, JCIT. /0+,-. /RESPONDENT BY : MS. S. VIDYA, CA. ! -1 /DATE OF HEARING : 06.06.2017 23* -1 /DATE OF PRONOUNCEMENT : 19.06.2017 / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER : THIS IS AN APPEAL FILED BY THE REVENUE IS DIRECTED AGAINST THE ORDER DATED 27.10.2016 PASSED BY THE LD. CIT(A)-3, MADURAI, FOR THE ASSESSMENT YEAR 2009-10. GRIEVANCE OF THE REVENUE IN THIS APPEAL IS WITH REGARD TO DELETION OF PENALTY LEVIED U/S. 271D OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). ITA NO.95/MDS/2017 2. FACTS OF THE CASE ARE THAT ASSESSEE IS AN INDIVIDUA L HAD FILED HIS RETURN OF INCOME FOR THE IMPUGNED ASSESSMENT ON 03 .12.2009 DECLARING AN INCOME OF F1,46,840/-. THE RETURN OF INCOME WAS ORIGINALLY PROCESSED U/S. 143(3) OF THE ACT ON 25.08.2010. LATTER ASSE SSMENT WAS COMPLETED U/S. 143(3) OF THE ACT VIDE ORDER DATED 26.12.2010 DETERMINING INCOME OF THE ASSESSEE AT F3,65,950/-. IT WAS OBSERVED BY THE LD. ASSESSING OFFICER THAT ASSESSEE HAD BORROWED MONEY FROM THE FOLLOWING PARTIES. F 1 S.V. VENKATESHWARA RAJA, RAJAPALAYAM. 10,00,000 2 P.V. DURAIRAJA, RAJAPALAYAM 7,00,000 3 M.A. PERUMALRAJA, RAJAPALAYAM 10,00,000 4 PK SUBRAMANIARAJA, RAJAPALAYAM 10,00,000 5 SK MURUGESARAJA, RAJAPALAYAM 10,00,000 TOTAL 47,00,000 LATTER LD. ASSESSING OFFICER INITIATED PENALTY PROC EEDINGS U/S. 271D OF THE ACT BY ISSUING A NOTICE DATED 06.01.2016 VIDE MISC /JCIT/VNR/2015-16, ASKING THE ASSESSEE TO APPEAR BEFORE HIM ON 27.01.2 016 AT 11.30 AM. IN THE PENALTY PROCEEDINGS, LD. ASSESSING OFFICER O BSERVED THAT OUT OF THE ABOVE F47,00,000/-, IT WAS NOTICED THAT EXCEPT SHRI . SK MURUGESARAJA ALL OTHER HAVE BANK ACCOUNT AND THERE WAS NO REASONABLE CAUSE FOR ACCEPTING LOAN FROM OTHER FOUR PERSONS NAMELY S.V. VENKATESHWARA RAJA, SHRI. P. V. DURAIRAJA, M.A. PERUMALRAJA AND P K SUBRAMANIARAJA TOTALING F37,00,000/- IN CASH IN VIOLATION OF SEC. 269SS OF THE ACT. ITA NO.95/MDS/2017 ACCORDINGLY, HE LEVIED PENALTY U/S. 271D OF THE ACT TO THE TUNE OF F37,00,000/-. 3. AGGRIEVED, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEALS). BEFORE LD. CO MMISSIONER OF INCOME TAX (APPEALS) LD. AUTHORISED REPRESENTATIVE PLEADED THAT THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT U /S 143(3) OF THE ACT ON 26.12.2011 EXAMINED THE GENUINENESS OF CREDITS A ND ACCEPTED THE SAME AFTER GIVING A FINDING THAT THE CREDITORS WERE AGRICULTURISTS HAVING SUBSTANTIAL LAND FOR CULTIVATION AND THEY CULTIVATE D MOSTLY CASH CROPS. HE CONTENDED THAT AS THERE WAS NO CASE FOR INITIATIO N OF PENALTY U/S 271D, NEITHER HE INITIATED THE PENALTY NOR DID HE INFORM THE JCIT FOR INITIATION OF PENALTY. THIS MEANS THAT THE ASSESSING OFFICER WAS SATISFIED THAT THERE WAS REASONABLE CAUSE FOR ACCEPTING THE LOANS IN CAS H. HOWEVER, AFTER A LAPSE OF FOUR YEARS FROM THE DATE OF PASSING THE AS SESSMENT ORDER, THE JCIT INITIATED PENALTY PROCEEDINGS WHICH GOT TIME BARRED BECAUSE IT SHOULD HAVE BEEN INITIATED WITHIN THE REASONABLE T IME FROM THE COMPLETION OF ASSESSMENT PROCEEDINGS. FOR THIS PUR POSE LD. AR RELIED ON THE DECISION OF THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF M/S. P.R. ASSOCIATES IN ITA NO.1378/PN/2009 FOR ASSESSMENT Y EAR 1999-2000 DATED 14.11.2011. HE SUBMITTED THAT IN THE ABOVE C ASE, THE TRIBUNAL HELD THAT THE INITIATION OF PENALTY PROCEEDINGS U/ S.271D SHOULD HAVE ITA NO.95/MDS/2017 BEEN WITHIN THE REASONABLE TIME EVEN THOUGH THERE I S NO SPECIFIC TIME LIMIT LAID DOWN IN THE ACT FOR INITIATION OF PENALT Y PROCEEDINGS. HE SUBMITTED THAT THE HON'BLE APEX COURT IN THE CASE O F UOI VS CITADAL FINE PHARMACEUTICALS AND OTHERS REPORTED IN [1989] 3 SCC 483 [2002-TIOL- 680-SC-CX] HELD THAT IN THE ABSENCE OF ANY PERIOD OF LIMITATI ON, IT IS SETTLED THAT EVERY AUTHORITY IS TO EXERCISE THE POW ER WITHIN A REASONABLE PERIOD AND WHAT WOULD BE THE REASONABLE PERIOD WOUL D DEPEND UPON THE FACTS OF THE EACH CASE. IN VIEW OF THE ABOVE, THE L D. AR VEHEMENTLY URGED THAT THE IMPUGNED ORDER IS TO BE CANCELLED AS THE INITIATION WAS AFTER A LONG PERIOD OF FOUR YEARS FROM THE COMPLETI ON OF THE ASSESSMENT PROCEEDINGS. WITHOUT PREJUDICE TO THE ABOVE, LD. AR SUBMITTED THAT AS PER LETTER DT.28.11.2011 FILED BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE LOANS WERE AV AILED FOR THE PURPOSE OF ENTERING INTO A NEW VENTURE OF QUARRY IN HOSUR FOR PURCHASING THE SAME AND AS THE ASSESSEE REQUIRED FUNDS URGENT LY BUT SOMEHOW THE DEAL COULD NOT BE FINALISED AND THE ASSESSEE RETUR NED THE MONEY TO THE BORROWERS. HE SUBMITTED THAT IT WAS ALSO POINTED OU T IN THE ABOVE LETTER THAT DUE TO THE BUSINESS URGENCY AND THE TIME FACTO R INVOLVED, THE LOAN WAS OBTAINED IN CASH AND RETURNED BACK SINCE THE QU ARRY WAS NOT PURCHASED AS THE ASSESSEE WAS NOT SATISFIED WITH T HE NEW VENTURE. HE FURTHER SUBMITTED THAT SINCE THERE WAS REASONABLE C AUSE, THE ASSESSING OFFICER HIMSELF DID NOT INITIATE PENALTY PROCEEDING S AND DID NOT EVEN ITA NO.95/MDS/2017 RECOMMEND INITIATION OF PENALTY TO JCIT BUT SUBSEQU ENTLY BASED ON AUDIT OBJECTION OR OTHERWISE, THE JCIT INITIATED PENALTY PROCEEDINGS WHICH IS NOT CORRECT. HE FURTHER SUBMITTED THAT EVEN THOUGH FOUR CREDITORS WERE HAVING BANK ACCOUNTS, THEY AS AGRICULTURISTS USED T O HAVE CASH IN HAND BY CULTIVATING CASH CROPS AS PER THE FINDING GIVEN BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER. LD. COMMISSIONER OF INCOM E TAX (APPEALS) OBSERVED THAT THE ASSESSING OFFICER COMPLETED THE A SSESSMENT U/S 143(3) ON 26.12.2011 IN WHICH HE GAVE A FINDING THA T THE LOANS RECEIVED BY THE ASSESSEE IN CASH WERE GENUINE AND DID NOT M AKE ANY ADDITION. HE DID NOT INFORM THE JCIT FOR INITIATION OF THE PE NALTY PROCEEDINGS U/S. 271D. AFTER A LAPSE OF MORE THAN FOUR YEARS FROM TH E COMPLETION OF ASSESSMENT, THE JCIT ISSUED SHOW CAUSE NOTICES ON 0 6.01.2016 U/S. 271D. IN THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS GIVEN THE FINDING THAT THE CREDITORS WERE AGRICULTURISTS HAVI NG SUBSTANTIAL LAND HOLDINGS AND DERIVING ADEQUATE AGRICULTURAL INCOME FROM CASH CROPS. IN THE LIGHT OF THE ABOVE FACTS, THE FIRST QUESTION TO BE DECIDED IS WHETHER THE INITIATION OF PENALTY PROCEEDINGS U/S. 271D IS TIME BARRED OR NOT. IT IS TRUE THAT THE ACT DOES NOT LAY DOWN ANY TIME LIMIT FOR INITIATION OF PENALTY PROCEEDINGS U/S 271D. BUT THAT DOES NOT MEAN THAT T HE JCIT CAN INITIATE PENALTY PROCEEDINGS AFTER A LONG GAP FROM THE COMPL ETION OF THE ASSESSMENT PROCEEDINGS. AS HELD BY THE HON'BLE SUPR EME COURT IN THE CASE OF M/S CITADAL FINE PHARMACEUTICALS (SUPRA) IN THE ABSENCE OF ANY ITA NO.95/MDS/2017 PERIOD OF LIMITATION LAID DOWN IN THE ACT, EVERY AU THORITY HAS TO EXERCISE THE POWER WITHIN A REASONABLE PERIOD. THE REAL QUES TION IS WHETHER THE DELAY OF FOUR YEARS CAN BE SAID TO BE A REASONABLE PERIOD OR NOT. LD. COMMISSIONER OF INCOME TAX (APPEALS) FOUND THAT A PERIOD OF FOUR YEARS AFTER COMPLETION OF ASSESSMENT CANNOT BE TREATED AS A REASONABLE PERIOD AND THE JCIT SHOULD HAVE INITIATED THE PENALTY PROC EEDINGS WITHIN FEW MONTHS FROM THE COMPLETION OF THE ASSESSMENT PROCEE DINGS. IN FACT, THE ASSESSING OFFICER SHOULD HAVE INFORMED THE JCIT WHI LE COMPLETING THE ASSESSMENT U/S. 143(3) TO INITIATE PENALTY PROCEEDI NGS. THE FACT THAT THE ASSESSING OFFICER DID NOT INFORM THE JCIT SHOWS THA T HE WAS SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND DECIDED NO T TO WRITE TO JCIT ABOUT THE INITIATION OF THE PENALTY PROCEEDINGS BECAUSE ALL T HE CREDITORS WERE AGRICULTURISTS. IN THE CIRCUMSTANCES, LD. COM MISSIONER OF INCOME TAX (APPEALS) HELD THAT THE INITIATION OF THE PENAL TY PROCEEDINGS BY NOTICE DT.06.0.1.2016 IS TIME BARRED AND THE IMPUGN ED ORDER IS CANCELLED. WITHOUT PREJUDICE TO THE ABOVE, IT IS FU RTHER SEEN THAT THE ASSESSEE WAS CONTEMPLATING TO PURCHASE A QUARRY NE AR HOSUR AND MOBILIZED FUNDS FROM RELATIVES WHO WERE AGRICULTURI STS AND DEPOSITED ABOUT F47,00,000/- IN HIS BANK ACCOUNT. THE CLAIM O F THE ASSESSEE WAS THAT THE AMOUNT WAS TO BE PAID IMMEDIATELY WHENEVER THE DEAL WAS FINALISED AND FOR THIS PURPOSE THE AMOUNT WAS KEPT READY IN THE BANK ACCOUNT, BUT THE DEAL COULD NOT BE FINALISED BECAUS E IT WAS NOT VIABLE AND ITA NO.95/MDS/2017 THE AMOUNT WAS RETURNED TO THE RELATIVES. AS HELD B Y THE HON'BLE HYDERABAD TRIBUNAL IN THE CASE OF DILLU CINE ENTERPRISES P LTD [80 ITD 484] WHEN THERE WAS AN URGENT EXIGENCY FOR TAKING LOAN I N CASH THAT WOULD CONSTITUTE THE REASONABLE CAUSE AND THE PENA LTY U/S 271D CANNOT BE LEVIED. EVEN THOUGH THE CREDITORS WERE HAVING TH E BANK ACCOUNTS, THEY WERE DERIVING SUBSTANTIAL INCOME FROM CASH CRO PS AND THEY WERE HAVING CASH IN HAND FROM WHICH THE AMOUNT WAS ADVAN CED TO THE ASSESSEE . IN THE CIRCUMSTANCES, LD.COMMISSIONER O F INCOME TAX (APPEALS) ACCEPTED THE PLEA OF THE ASSESSEE THAT T HE LOAN WAS OBTAINED DUE TO THE BUSINESS EXIGENCIES THAT WOULD CONSTITUT E A REASONABLE CAUSE AND HELD THAT THERE IS NO JUSTIFICATION FOR LEVY OF PENALTY AND ACCORDINGLY, HE DELETED THE PENALTY. AGAINST THIS, THE REVENUE I S IN APPEAL BEFORE US. 4. LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THAT A SSESSEE FAILED TO ESTABLISH THE EXISTENCE OF REASONABLE CAUSE IN A CCEPTING THE CASH LOAN FROM FOUR PERSONS AS MENTIONED IN THE SECTION 273B OF I.T. ACT 1961 AND ALSO FAILED TO ESTABLISH THE BUSINESS EXIGENCY DURI NG THE COURSE OF PENALTY PROCEEDINGS BEFORE THE JOINT COMMISSIONER O F INCOME-TAX. 4.1 LD. DEPARTMENTAL REPRESENTATIVE HAD PLACED RE LIANCE ON THE JUDGEMENTS OF HON'BLE CHENNAI HIGH COURT IN THE CAS E OF NANDHI DHALL MILLS REPORTED IN (2015) 61 TAXMANN.COM 97(MADRAS) AND OF HON'BLE KERALA HIGH COURT IN THE CASE OF GRIHALAKSHMI VISION REPORTED IN (2015) ITA NO.95/MDS/2017 63 TAXMAN.COM 196(KERALA), WHEREIN IT IS HELD THAT IN THE ABSENCE OF BUSINESS EXIGENCY TO AVAIL CASH LOAN, SUCH TRANSACT ION WOULD NOT COME UNDER EXCEPTION CLAUSE OF SECTION 271D. 4.2 LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THA T ASSESSEE HAS TAKEN LOAN OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQU E/DRAFT FROM FOUR PERSONS THOUGH SUCH PERSONS HAVE BANK ACCOUNTS. 4.3 THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED THERE IS NO LIMITATION FOR INITIATION OF PENALTY PROCEEDINGS UN DER SECTION 271D IS PRESCRIBED UNDER THE INCOME-TAX ACT 1961. 4.4 THE LD. DEPARTMENTAL REPRESENTATIVE HAD ALSO PL ACED RELIANCE ON THE DECISION OF HON'BLE IT AT, CHANDIGARH IN THE CA SE OF DEWAN CHAND AMRIT LAL VS DCIT DATED 03.11.2015(98 ITD 200) WHEREIN IT WAS HELD THAT THE LEGISLATURE HAS CONSCIOUSLY NOT PRESCRIBED ANY LIMITATION FOR INITIATION OF PENALTY PROCEEDINGS UNDER SECTIONS 27 1D AND 271E AND THERE WAS NEITHER ANY NECESSITY NOR THE TRIBUNAL IS EMPOWERED TO PRESCRIBE ANY LIMITATION FOR INITIATION OF PENALTY PROCEEDINGS UNDER SECTIONS 271D AND 271 E IN INTERPRETING THE PROVISI ONS. 4.5 THE LD. DEPARTMENTAL REPRESENTATIVE SUBMITTED C IT(A) OUGHT TO HAVE CONSIDERED THE FACT THAT WHEN NO LIMITATION HA D BEEN INCORPORATED INTO THE STATUTE FOR INITIATION OF PENALTY UNDER SE CTION 271D, IT CANNOT BE ITA NO.95/MDS/2017 HELD THAT INITIATION OF PENALTY PROCEEDINGS BY THE JOINT COMMISSIONER IS BARRED. 4.6. THE LD. DEPARTMENTAL REPRESENTATIVE FURTHER SUBMITTED THAT CIT(A) OUGHT TO HAVE CONSIDERED THE FACT THAT THE A SSESSEE HAD INCOME FROM COMMISSION, BUSINESS AND OTHER SOURCES AND HEN CE THE CASH LOAN TAKEN BY THE ASSESSEE IS NOT EXEMPTED AS PER PROVIS O TO SECTION 269SS OF THE IT ACT 1961 AND PRAYED FOR ALLOWING THE APPEAL. 5. PER CONTRA, LD. AUTHORISED REPRESENTATIVE SUBMITTE D THAT DUE TO BUSINESS EXIGENCY ASSESSEE BORROWED LOANS FROM AB OVE FOUR PARTIES IN CASH AND THERE EXIST REASONABLE CAUSE FOR BORROWING THE MONEY IN CASH. SHE ALSO SUBMITTED THAT IN VIEW OF PROVISIONS OF SE C. 275(1)(C) OF THE ACT, THE PENALTY ORDER TO BE PASSED WITHIN THE END OF TH E FINANCIAL YEAR IF THE PROCEEDINGS OF PENALTY IS INITIATED IN THE COURSE O F SOME PROCEEDING OR WITHIN THE PERIOD OF SIX MONTHS FROM THE END OF THE MONTH IN WHICH ACTION FOR IMPOSITION OF PENALTY IS INITIATED. ACC ORDING TO HER, PENALTY NOTICE WAS ISSUED ON 15.01.2015, THE PENALTY ORDER PASSED BY THE LD. ASSESSING OFFICER ON 08.02.2016 IS BAD IN LAW. FOR THIS PURPOSE, SHE RELIED ON CBDT CIRCULAR NO.10/2016, F.NO.279/MISC./ M-140/2015-ITJ, DATED 26 TH APRIL, 2016 AND ALSO JUDGMENT OF HONBLE DELHI HIG H COURT IN THE CASE OF SUBODH KUMAR BHARGAVA VS. CIT 309 ITR 0031 . ITA NO.95/MDS/2017 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MAT ERIAL ON RECORD. IN THIS CASE, PENALTY NOTICE WAS ISSUED T O THE ASSESSEE ON 06.01.2016 AND NOT ON 06.01.2015 AS ALLEGED BY THE LD. AUTHORISED REPRESENTATIVE AS SEEN FROM THE ASSESSMENT ORDER AS WELL AS ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS). IN O UR OPINION MENTIONING THE DATE IN NOTICE AT THE TOP OF IT AS 06.01.2015 IS ONLY A TYPOGRAPHICAL ERROR AS IT IS EVIDENT THAT LD. ASSE SSING OFFICER ASKED ASSESSEE TO APPEAR BEFORE HIM ON 27.01.2016. EVEN REFERENCE NO ALSO MENTIONED AS MISC/JCIT/VNR/2015-16. ACCORDINGLY, W HEN IT WAS POINTED OUT TO THE LD. AUTHORISED REPRESENTATIVE SHE FAIRLY CONCEDED THE ERROR AND AGREED WITH THE CONTENTION OF THE LD. ASSESSING OFFICER THAT IT WAS ISSUED ON 06.01.2016. HENCE, THE RELIANCE PLACED B Y THE ASSESSEE IN THE CASE OF SUBODH KUMAR BHARGAVA (SUPRA) AND CBDT CIRCULAR NO. 10/2016 IS NOT APPLICABLE TO THE FACTS OF THE CASE. IN OU R OPINION THE PENALTY ORDER PASSED U/S. 271D OF THE ACT IS NOT BARRED BY LIMITATION IN TERMS OF SEC. 275(1) (C) OF THE ACT. 7. NEXT CONTENTION OF THE LD. AUTHORISED REPRESENTAT IVE IS THAT CASH LOANS ARE GENUINE LOANS AND IT WAS BORROWED ON ACC OUNT OF BUSINESS EXIGENCY AND PENALTY U/S. 271D CANNOT BE LEVIED. IN OUR OPINION, FIRSTLY ASSESSEE HAS NOT DEMONSTRATED BUSINESS URGENCY TO BORROW MONEY FROM ABOVE FOUR PARTIES BY CASH. THERE IS IOTA OF EVIDE NCE PLACED BEFORE LOWER AUTHORITIES TO SHOW THAT ASSESSEE IS VERY URG ENT NEED OF CASH TO ITA NO.95/MDS/2017 MEET BUSINESS COMMITMENT. HAD IT HAD BUSINESS EXIG ENCY TO BORROW MONEY BY CASH, IT IS MANDATORY ON THE PART OF THE ASSESSEE TO PLACE NECESSARY EVIDENCE. WITHOUT EXAMINING ANY EVIDENCE , IT IS NOT POSSIBLE FOR US TO HOLD THERE IS BUSINESS EXIGENCY TO BORROW THE MONEY FROM THE ABOVE PERSONS IN CASH. BEING SO, WE ARE NOT IN AGRE EMENT WITH THE FINDING OF THE LD. COMMISSIONER OF INCOME TAX (APPE ALS) IN THIS REGARD. 8. NEXTLY, WITH REGARD TO THE GENUINENESS OF THE TRAN SACTIONS, WE CANNOT SAY THAT GENUINENESS OF TRANSACTIONS, OUT OF THE PURVIEW OF THE SEC. 271D OF THE ACT. IF THE TRANSACTIONS ARE NOT GENU INE, LD. ASSESSING OFFICER COULD HAVE APPLIED THE PROVISIONS OF SEC. 68 OF THE ACT. BEING SO, THERE IS NO FORCE IN THE ARGUMENT OF THE LD. AUTHORISED REPR ESENTATIVE. IT IS ALSO BROUGHT ON RECORD THAT ALL THE TRANSACTIONS FROM WH OM THE MONEY WERE BORROWED WHERE HAVING BANK ACCOUNT. THE ASSESSEE H AD NOT PASSED THE TEST OF REASONABLE CAUSE SHOWING HIS BONAFIDE AS P ER PROVISIONS OF SEC. 273(B) OF THE ACT DO NOT GET ATTRACTED, MORE SO, I N THE CASE NO PROPER EXPLANATIONS OFFERED BY THE ASSESSEE BEFORE LOWER A UTHORITIES. IN OUR OPINION, ASSESSEE IS LIABLE FOR PENALTY U/S. 271D OF THE ACT. WE PLACE RELIANCE ON THE JUDGMENT OF JURISDICTIONAL HIGH COU RT IN THE CASE OF P. MUTHUKARUPAN VS. JCIT 375 ITR 243. IN OUR OPINION, IT IS SUFFICIENT TO SAY THAT SIMPLY THE TRANSACTION WAS GENUINE, SO SEC. 269SS OF THE ACT IS NOT APPLICABLE. ONE CANNOT ACCEPT SUCH PROPOSITION OF LAW, THERE IS NO AMBIGUITY IN THE LANGUAGE OF SAID PROVISIONS OF SEC . 271D OF THE ACT. AS ITA NO.95/MDS/2017 SUCH THERE IS NO SUCH NEED TO APPLY THE PURPOSIVE T HEORY , IN INTERPRETATION OF SAID SECTION. SINCE THE ASSESSEE NOT SHOW ANY M ITIGATING CIRCUMSTANCES, PENALTY COULD BE LEVIED. THERE IS NO URGENCY FOR ASSESSEE TO BORROW MONEY IN CASH IN VIOLATION OF SEC. 269SS OF THE ACT. WE PLACE RELIANCE ON THE JUDGMENT OF NANDHI DHALL MILLS VS. CIT 373 ITR 510. ACCORDINGLY, WE REVERSE THE ORDER OF THE LD. COMMIS SIONER OF INCOME TAX (APPEALS) AND RESTORE THE ORDER OF LD. ASSESSING OF FICER. THE GROUND OF APPEAL RAISED BY REVENUE IS ALLOWED. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS ALLOWED. ORDER PRONOUNCED ON MONDAY, THE 19TH DAY OF JUNE, 2 017, AT CHENNAI. SD/- SD/- ( ! ' ! # . $% ) DUVVURU R.L. REDDY) & /JUDICIAL MEMBER ( ) (CHANDRA POOJARI) /ACCOUNTANT MEMBER /CHENNAI, H /DATED, THE 19TH JUNE, 2017. KV I - /&1JK LK*1 /COPY TO: 1. +, /APPELLANT 2. /0+, /RESPONDENT 3. ! M1 ( ) /CIT(A) 4. ! M1 /CIT 5. K NO /&1& /DR 6. O%) P /GF.