High Court Of Madras
CIT vs. Ratna Agencies
Section 269SS, 269T, 271D, 271E
Asst. Year 1989-90
P.D. Dinakaran & T.V. Masilamani, JJ.
Tax Case (Appeal) Nos. 1197 & 1198 of 2005
10th November, 2005
Counsel Appeared :
N. Muralikumaran, for the Appellant
JUDGMENT
P.D. dinakaran, J. :
The above tax case appeals are directed against the order of the Tribunal dt. 3rd April, 2002 made in ITA Nos. 2565 and 2566/Mad/1991, respectively.
2. The Revenue is the appellant. The assessment year involved in the present appeals is 1989-90.
3. The short facts of the case are that the assessee-company is a partnership firm and it filed returns for the asst. yr. 1989-90. The AO while processing the returns, noticed that the assessee had contravened the provisions of ss. 269SS and 269T by accepting cash loans exceeding Rs. 20,000 and hence levied penalty under ss. 271D and 271E of the IT Act, 1961. Against such levy of penalty, the assessee filed an appeal before the CIT(A), who deleted the penalty imposed by the AO holding that the contravention alleged against the assessee did not result in any unaccounted transaction such as lending and repayment and that both lending and repayment were entered in the books of the assessee and the figure involved was meagre and that the same was incurred only for meeting the sudden demand of overdraft account. Aggrieved against the said deletion of penalty, the Revenue went before the Tribunal, which endorsed the views of the CIT(A) and dismissed the appeal. It is against the said order dt. 3rd April, 2002, of the Tribunal, the present appeals have been preferred raising the following substantial question of law :
“Whether, in the facts and under the circumstances of the case, the Tribunal was right in holding that penalty under ss. 271D and 271E cannot be imposed for violation of ss. 269SS and 269T ?”
4. A similar question arose before the Delhi High Court and while answering the question by its judgment reported in CIT vs. Parma Nand (2003) 180 CTR (Del) 489 : (2004) 266 ITR 255 (Del), after extracting the relevant portions from the order of the Tribunal, the Court held as under : “The afore-extracted portion of the Tribunal’s order shows that the conclusion of the Tribunal that there was a reasonable cause in not strictly complying with the provisions of s. 269SS 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 essentially factual giving rise to no question of law much less a substantial question of law.” (Emphasis, italicised in print, supplied)
5. In the case on hand, the Tribunal after endorsing the findings of the CIT(A) that the contravention 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 assessee and the figure involved was also meagre and that the same was incurred only for meeting the sudden demand of overdraft account, found that the order of the CIT(A) is a well reasoned one and the same does not suffer from any infirmity requiring 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.
6. In this view of the matter, we hold that there is no reason whatsoever to interfere with the findings of the Tribunal that there was reasonable cause for the assessee not strictly complying with the provisions of s. 269SS of the Act.
7. Consequently, we answer the question in the affirmative against the Revenue and in favour of the assessee, that in the facts and circumstances of the case, the Tribunal was right in holding that the penalty under ss. 271D and 271E cannot be imposed for violation of ss. 269SS and 269T of the Act. Accordingly, the appeals are dismissed. No costs.
[Citation : 284 ITR 609]
