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2007] 292 ITR 303 [2007] 165 TAXMAN 457 (MAD.) HIGH COURT OF MADRAS A.B. Shanthi v. Assistant Director of Inspection (Investigation) A.C. ARUMUGAPERUMAL ADITYAN, J. CRL. R.C. NO. 889 OF 2002 JUNE 5, 2007 Section 271D, read with section 269SS, of the Income-tax Act, 1961 - Penalty - For failure to comply with section 269SS - Whether after omission of section 276DD by Direct Tax Laws (Amendment) Act, 1987, as per penal provision inducted thereafter under section 271D, Commissioner can levy only penalty and person who violates provisions of section 269SS, cannot be sentenced to any imprisonment - Held, yes CASES REFERRED TO Asstt. Director of Inspection (Inv.) v. Kumari A.B. Shanthi [2002] 255 ITR 258/ 122 Taxman 574 (SC) [Para 5], Kumari A.B. Shanthi v. Asstt. Director of Inspection (Inv.) [1992] 197 ITR 330 (Mad.) [Para 5] and General Finance Co. v. CIT [2002] 257 ITR 338/ 124 Taxman 432 (SC) [Para 7]. A.K. Mylsamy for the Petitioner. Ramaswamy K. for the Respondent. JUDGMENT 1. This revision petition has been preferred against the in C.A. No. 182 of 1997 on the file of the Principle Sessions Judge, Chennai, which had arisen out of the rendered by the learned Additional Chief Metropolitan Magistrate, Chennai, in E.O.C.C. No. 207 of 1986. 2. The short facts of the complaint are that the revision petitioner/accused, a cinema actress, had obtained a loan of Rs. 4,65,000 from the All India Anna D.M.K. Party, Chennai, as per the entry made in the abovesaid party's ledger folio on 17-4-1986. The accused had admitted in her sworn statement given before the Assistant Director of Inspection (Investigation) on 23-4-1986, about the abovesaid borrowal of Rs. 4,65,000 from the abovesaid political party. According to the prosecution as per section 269SS of the Income-tax Act, 1961, a person can obtain any loan or deposit only through an account-payee cheque or an account-payee bank draft if the amount of loan exceeds Rs. 10,000. Since the loan obtained by the accused which is above Rs. 10,000 was not by way of account-payee cheque or account-payee bank draft, according to the prosecution, there is a violation of section 269SS of the Income-tax Act, 1961, by the accused which…

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