CIT Vs. NATVARLAL PURSHOTTAMDAS PAREKH

JUDGEMENT

(1.) THE Tribunal, Ahmedabad Bench 'A' has referred the following two questions for the opinion of this Court under Section 256(1) of the Income Tax Act, 1961 (the Act') at the instance of the Commissioner, Rajkot.

(2.) THE assessment year is 1991 -92. During course of assessment proceedings the assessing officer noticed that the assessee, who carries on business of money lending and trades in jewellery, has accepted various loans/deposits from different parties and repaid such loans/deposits to different parties in contravention of provisions of Sections 269SS and 269T of the Act respectively. Accordingly the matter was referred to Dy. Commissioner, Bhavnagar for initiation of penalty proceedings under Sections 271D and 271E of the Act for the two respective violations referred to earlier. The Dy. CIT, after issuing show -cause notice and considering, the explanation tendered by the assessee, did not find the explanation satisfactory and imposed penalty of Rs. 2,61,193 under Section 271D of the Act and penalty of Rs. 7,70,778 unders. 271E of the Act. The assessee did not succeed in appeals filed before Commissioner (Appeals) and hence preferred second appeal before the Tribunal.

(3.) AFTER hearing the parties the Tribunal has recorded the following findings after appreciating the evidence on record: