ORDER SHEET IN HIGH COURT AT CALCUTTA Special Jurisdiction(Income Tax) ORIGINAL SIDE ITA NO.383 OF 2005 SHRI KRISHNAPADA CHANDA Versus COMMISSIONER OF INCOME TAX XI BEFORE: Hon'ble JUSTICE GIRISH CHANDRA GUPTA Hon'ble JUSTICE ARINDAM SINHA Date : 31st March, 2015. MR.R.K.BISWAS,ADVOCATE FOR APPELLANT MS.ASHA GUTGUTIA,ADVOCATE FOR RESPONDENT Court : subject mater of challenge in this appeal is judgment and order dated 18th October, 2004 pertaining to assessment year 1999-2000 by which learned Tribunal allowed appeal preferred by revenue setting aside order passed by C.I.T (Appeals) deleting penalty imposed upon assessee. facts and circumstances of case briefly stated are as follows; On 6th May, 1998, assessee borrowed sum of Rs.1,90,000/- in cash from his brother. It is not in dispute that sum of Rs.1,90,000/- was withdrawn by brother of assessee from his own bank account. After withdrawal was made, sum was made over to assessee and on same day assessee deposited amount in his bank account. This is how cash loan of sum of Rs.1,90,000/- was received by assessee which is in contravention of section 269SS of Income Tax Act. assessee was penalised by identical sum of Rs.1,90,000/- under section 271D. In appeal preferred by assessee, C.I.T (Appeals) was of opinion that there was reasonable cause which led assessee to took loan otherwise than by account payee cheque and, therefore, penalty should not have been levied. C.I.T (Appeals) has obviously taken assistance of section 273B, which provides that no penalty shall be impossible for any failure referred to in section 269SS, if assessee proves that there was reasonable cause for said failure. Aggrieved by appellate order, revenue preferred appeal which was allowed by Tribunal, which is under challenge. At time of admission of appeal following questions were formulated;- i ) Whether Tribunal without considering facts of present case and totality of circumstances under which cash loan was obtained by assessee was justified in law in confirming penalty amounting to Rs.1,90,000/- imposed by respondent no.3 under Section 271D of I.T.Act for violating provision of Section 269 SS of I.T.Act without even considering object for which Section 269 SS of I.T.Act was inserted by Finance Act, 1984 and by interpreting Section 273B of I.T.Act in hypertechnical way as if urgent requirement of money is only criteria for applying Section 273B of I.T.Act for not imposing any penalty under Section 271D of I.T.Act without even taking into consideration genuineness of loan transaction and other genuine causes whereas Section 273B inter alia clearly says that no penalty shall be imposable if there is reasonable cause for accepting cash loan and when all these aspects have been totally ignored by Tribunal while deciding present case? ii) Whether on facts and in circumstances of case, order of Tribunal confirming penalty amounting to Rs.1,90,000/- under Section 271D of I.T.Act 1961 was perverse and not sustainable in law? Mr.Biswas, learned advocate appearing for appellant submitted that well reasoned order passed by C.I.T.(Appeals) was interfered with by learned Tribunal for no justifiable cause. Mrs. Gutgutia, learned advocate appearing for revenue submitted that absence of any reasonable cause to borrow money in cash in contravention of section 269SS is substantiated by fact that assessing officer in his order dated 4th February, 2003 has disclosed following undisputed facts. 5 .1 Furthermore, facts on record reveal that while assessee received cash amount of Rs.1,90,000/- on May 06, 1998 which he deposited in his bank account on same day, first payment of Rs.50,000/- was made nine days later on 14.05.1998. balance amount of Rs.1,40,000/-, continued to be in possession of assessee till next two payments were made more than month later, i.e. on June 20 and 24, 1998, culminating with final payment of Rs.59,592/- on July 04, 1998. These facts show that there was sufficient time available for assessee to accept amount from lender by way of prescribed instrument under section 269SS of Act (such as account payee bank draft) for first payment even assuming that it had to be paid to French Motor Car Co. Ltd. latest by 14.05.1998. For balance payments that were made several weeks later in June and July, 1998, lack of any urgency whatsoever is palpably apparent. We have not been impressed by reasoning advanced by assessing officer and brought to our notice by Mrs. Gutgutia. contravention of section 269SS, if any, took place on 6th May, 1998 when loan in cash was obtained by assessee. That contravention could not have been remedied by any subsequent act suggested by Assessing Officer quoted above. aforesaid views of Assessing Officer were correctly turned down by Commissioner of Income Tax (Appeals) by holding as follows : Once having taken loan and having deposited in his account, no purpose would have been served to take it out, and controvert into financial instrument after ascertaining amount of installment payment to avoid attracting provisions of Section 269SS . fact that money was withdrawn on 6th May, 1998 from bank account of lender and fact that money was deposited in bank account of borrower on 6th May, 1998 itself is pointer to show that assessee was under belief that there was great urgency. True that he could have achieved object by obtaining account payee cheque from lender but same would have taken time for purpose of clearance. case of assessee as regards urgency was accepted by appellate authority by observing as follows:- H aving booked vehicle on 29.04.1998 and demand by financier to make immediate payment, appellant was apprehensive of getting his, booking cancelled are also of non-availability of truck due to heavy demand in market. appellant was not sure whether payments will be lump sum or through installments. He was driven by sense of urgency for which he took loan from his brother in cash and deposited same in his bank account. It was his judgement regarding urgency in prevailing circumstances and according to him urgency existed for making payment. observation of CIT (A) is pointer to show that case is clearly covered by Section 273B of Income Tax Act. It is elementary that appellate authority interferes with order not because impugned order is not right but because impugned order is shown to be wrong. Our attention was not drawn to any finding of learned Tribunal indicating that order of CIT (A) was wrong. Therefore, interference was not only wrong but also perverse. For aforesaid reasons, second question is answered in affirmative and in favour of assessee. first question need not be separately answered. appeal is thus allowed. (GIRISH CHANDRA GUPTA, J.) (ARINDAM SINHA, J.) sb/km Shri Krishnapada Chanda v. Commissioner of Income-tax XI