Law:

Section:

Section 269T, read with section 271E, of the Income-tax Act, 1961 - Deposits - Mode of repayment of certain (Penalty) - Assessment years 2008-09 and 2009-10 - Assessee received certain sum as loan from one 'K' and repaid same by way of cash - Statement was also recorded from 'K' to effect that he had practice of lending and receiving back in cash and did not lend or receive back in cheque or draft from anybody - Assessing Officer levied penalty under section 271E for repayment of loan in cash - Whether since repayment of loan in cash was made out of compulsion by financier, penalty under section 271E was to be deleted - Held, yes [Para 10] [In favour of assessee] Section 269SS, read with section 271D of the Income-tax Act, 1961 - Deposits - Mode of taking/accepting (Penalty) - Assessment years 2008-09 and 2009-10 - Consequent to a survey conducted in premises of one 'K' who was running an unlicenced financing business, it was found that assessee received certain sum as loan from 'K' and repaid same by way of cash - Statement was also recorded from 'K' to effect that he had practice of lending and receiving back in cash and did not lend or receive back in cheque or draft from anybody - Assessing Officer levied penalty under section 271D for accepting loan in cash - Assessee contended that he was not served with copy of statement recorded from 'K' and copies of materials seized from him, based on which penalty was levied and he was not given any opportunity of cross examining 'K' which amounted to violation of principles of natural justice - Whether since there was serious violation of principles of natural justice, matter was to be remanded back - Held, yes [Para 11] [In favour of assessee/Matter remanded] FACTS â–  Consequent to a survey conducted in the premises of one 'A' who was running an unlicenced financing business, certain accounts and supporting documents were impounded. As per the books of account in the office of 'K' it was found out that the assessee received loan of Rs. 20,00,000 and repaid the same in cash. Following the same, the assessee was issued with a show cause notice under section 271D read with section 269(SS) and after receipt of…

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