Section 269SS, read with sections 269T, 271D, 271E and 273B, of the Income-tax Act, 1961

IT : Receipt and repayment of loan in cash due to immediate business necessity would amount to reasonable cause for not levying penalty under sections 271D and 271E
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[2015] 53 taxmann.com 17 (Madras)
HIGH COURT OF MADRAS
Commissioner of Income-tax-I, Chennai
v.
T. Perumal (Indl.)*
R. SUDHAKAR AND R. KARUPPIAH, JJ.
TAX CASE (APPEAL) NOS. 759 & 760 OF 2014†
M.P. NO. 1 OF 2014
OCTOBER  29, 2014
Section 269SS, read with sections 269T, 271D, 271E and 273B, of the Income-tax Act, 1961 - Deposits - Mode of taking/accepting (Penalty) - Assessee was in civil construction business - Assessing Officer levied penalty on him under sections 271D and 271E for taking and repaying loan in cash - Assessee explained that he had no resources to finance construction and, hence, he resorted to take loans from friends at time of emergency, particularly on Saturdays when labour payments had to be made and such loans were repaid within same assessment year - Whether genuineness of transaction to meet immediate business necessity would amount to reasonable cause in terms of section 273B and, therefore, penalty was to be deleted - Held, yes [Para 11] [In favour of assessee]