M. Sougoumarin Vs ACIT (Madras High Court)
The Assessing Officer found that the fact that the assessee had taken and repaid loans in cash was admitted. The Assessing Officer observed that the loans and repayments had not been accounted for in the regular books of accounts of the assessee or the firm in which the assessee was a partner and even if so recorded, no business exigency or urgency had been established to follow a prolonged and persistent system of accepting and repaying loans only in cash.
The Assessing Officer found that the assessee could not claim to have a reasonable cause contemplated under Section 273B of the IT Act to the satisfaction of the Assessing Authority and levied penalty to the extent of a sum equal to the loan amount repaid under Section 271E of the IT Act, i.e., Rs. 20,00,000/- in relation to the assessment year 2008-2009, and also levied penalty under Section 271D of the IT Act to the extent of Rs. 20,00,000/- in relation to the assessment year 2012-2013.
In this context, it would perhaps not be out of context to note that statutory provisions which prohibit acceptance of repayment of loans in cash are binding on all Income Tax payees and breach thereof attracts the penal provisions of the IT Act, and renders an assessee taking or repaying loans exceeding Rs. 20,000/- liable to penalty.
Perhaps interference on the ground of breach of consistency or on the ground of perversity may have been warranted if loan in cash had been taken once or twice in exceptional exigencies. However, the fact that a lender, not even licensed, was illegally giving loans only in cash and accepting repayments in cash cannot be ground for condonation of regular transactions with such an unauthorised lender.
We are of the view that the Appellate Tribunal was correct in law in restoring the order of the Assessing Officer for imposition of penalty under Sections 271D and 271E of the IT Act.
