Ita/1047/2009 Of The Commissioner Of Income Tax, Trichur v. U.salim. Palakkad

IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN THURSDAY, THE 17TH SEPTEMBER 2009 / 26TH BHADRA 1931 ITA.No. 1047 of 2009() ---------------------- ITA.299/COCH/2008 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT ----------------------------- THE COMMISSIONER OF INCOME TAX, THRISSUR. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): --------------- SHRI.U.SALIM,57,CHANDRANAGAR, PALAKKAD. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 17/09/2009, ALONG WITH ITA NO. 1152 OF 2009 AND CONNECTED CASES THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: -------------------------------------------- I.T.A. Nos. 1047,1152,1156,1277,1278,1332,1333 & 1371 OF 2009 -------------------------------------------- Dated this the 17th day of September, 2009 JUDGMENT Ramachandran Nair, J. Eight connected appeals arise from the orders of the Tribunalcancelling the penalty levied on the assessee under Section 271D of theI.T. Act for six years and under Section 271E for the remaining twoyears. The assessee is engaged in money lending and he was alsoengaged as distributor of films. In the course of business, he asaccepted loans in cash and repaid the same also in cash which is aviolation of Section 269SS of the Act. Penalty is levied under Section271D for violation of Section 269SS. Similarly penalty under Section271E is levied for violation of Section 269T of the Act, inasmuch asthe assessee is found to have repaid the loan other than through chequeor demand draft. It is pertinent to note that the assessment ended upwith no addition because all the loans and repayments were found to begenuine transactions. CIT (Appeals) himself allowed the appealssubstantially and the Tribunal confirmed it, but by cancelling even the penalty sustained in the first appeals. The Tribunal noticed that so faras advances made by the assessee in the course of money lendingbusiness is concerned, there is no violation of Section 269SS. We areof the view that the Tribunal's decision is right. So far as acceptance ofloans and repayment of the same is concerned, even though there isviolation, the assessee has explained the circumstances under whichtransactions were made in cash. On facts, the Tribunal found that thereis justification entitling immunity from penalty to the assessee underSection 273B of the Act. We do not find any substantial question oflaw arising from the orders of the Tribunal which has accepted thefactual circumstances under which violations happened entitling theassessee for immunity from penalty. Consequently all the appeals aredismissed. (C.N.RAMACHANDRAN NAIR)Judge. (V.K. MOHANAN) Judge.