- (1.) This appeal has been preferred by the assessee under section 260A of the Income-tax Act, 1961 (in short, "the Act") against the order dated September 20, 2012, annexure A-6, passed by the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar, in I.T.A. No. 369(ASR)/2011 for the assessment year 2006-07, claiming the following substantial questions of law: "1. Whether the Tribunal, while disposing of the appeal, is right in law in refusing to take cognizance of extract of the cash book dated December 29, 2005, placed at page 9 of the paper book furnished by the appellant-firm, specifically when during the course of hearing of the appeal the Tribunal after duly taking cognizance of the same had raised queries, made notings, and even called upon the Departmental representative to place his counter-submission as regards the same, by so doing had therein admitted the same, and no objection/defect as regards the same was ever brought to the notice of the appellant-firm, either by the Registry or by the Bench? 2. Whether the findings of the Tribunal that the appellant-firm had not furnished any documentary evidence or any explanation either before it or before the lower authorities being perverse cannot be sustained in the eyes of law? 3. Whether the Tribunal is right in law in upholding the penalty imposed in the hands of the appellant-firm under section 271D of the Act for technical/venial breach of the provisions of section 269SS, specifically when the said loan transaction stood duly recorded in the books of account which were unilaterally produced before the Assessing Officer during the course of the assessment proceedings and neither the genuineness of the loan nor the source thereof had ever been doubted by the Assessing Officer while framing the assessment of the appellant-firm? 4. Whether the Tribunal is right in law in upholding the levy of penalty imposed under section 271D of the Act in respect of a cash loan raised by the appellant-firm from its agriculturist customers, which was prompted by urgent need of funds to meet out outstanding bank liability, remaining under the bona fide belief that cash transactions with the agriculturist customers were permissible in toto, specifically when the said loan transaction stood duly recorded by the appellant-firm in its regular books of account which were unilaterally produced before the Assessing Officer during the course of the assessment proceedings and neither the genuineness of the aforesaid loan transaction nor its source had ever been doubted by the Revenue/Department, specifically when no prejudice was caused to the Revenue/Department in the instant action of the appellant-firm inasmuch as it did not attempt by the impugned act to avoid any tax liability? 5. Whether the Tribunal is right in law in upholding the levy of penalty under section 271D of the Act in the hands of the appellant-firm on the basis of premature observations, findings and investigations?." A few facts relevant for the decision of the controversy involved, as narrated in the appeal, may be noticed. The appellant-firm as a kacha arhtia (commission agent in food grains) was dealing with agriculturists. It was carrying out cash transactions with respect to payments to the agriculturists of the sale proceeds of their agriculture produce which was sold through it as an intermediary. The business of the appellant-firm which was already facing financial crisis due to lack of liquidity, was burdened with a full availed credit facility of Rs. 5 lakhs from Punjab and Sind Bank. It was further adversely hit when on one part the bank was pressing hard for the repayment of the outstanding dues and, on the other hand, the real brothers of one of the partners of the appellant-firm, namely, Shri Charan Dass, who had put joint family property as a security with the bank was pressuring him for getting a clear title of the property from the bank. The appellant-firm decided to clear the outstanding liability towards the bank in toto wherein the same as on December 29, 2005, stood reflected at an amount of Rs. 5,10,726. However, on the relevant date, the cash in hand available with the appellant-firm was only Rs. 66,128.66 and, therefore, the latter raised a loan from one of its agriculturist customers, Shri Jugraj Singh, son of Shri Gurdev Singh, r/o Village Rahdiala, on December 29, 2005, which was duly recorded by the appellant-firm in its books of account. The said amount including Rs. 10,726 was deposited by the appellant towards full and final discharge of the entire outstanding bank liability and, consequently, the aforesaid joint family property lying with the bank was got released. The case of the appellant was taken up for scrutiny proceedings. Penalty proceedings for raising the loan by the appellant-firm in contravention of the provisions of section 269SS of the Act were initiated by the Additional Commissioner of Income-tax, Moga. The appellant aggrieved by the order filed an appeal before the Commissioner of Income-tax (Appeals), Ludhiana, which was also dismissed, vide order dated February 23, 2011, annexure A-3. Still not satisfied, the appellant filed an appeal before the Tribunal. Vide order dated September 20, 2012, annexure A-6, the Tribunal dismissed the appeal. Hence, the instant appeal by the assessee.
(2.) We have heard learned counsel for the parties and perused the record.
(3.) In terms of the order dated January 27, 2014, learned, counsel for the appellant has produced the revenue record to show Jugraj Singh, son of Shri Gurdev Singh, r/o Village Randiala, from whom the assessee had taken a loan of Rs. 5 lakhs in cash had sufficient means to pay the same. It was urged that it was under compelling circumstances that the loan in cash was taken as the assessee was to discharge the bank liability and banking facility was not readily available in the village. Reliance was placed on the judgments in Sona Paper Board and Ltd. v. Joint CIT (I.T.A. No. 142 of 2009, decided on April 20, 2011 (P & H)), Asst. Director of Inspection (Inv.) v. Kum. A.B. Shanthi, 2002 255 ITR 258, CIT v. Saini Medical Store, 2005 277 ITR 420, CIT v. Sunil Kumar Goel, 2009 315 ITR 163, Hindustan Steel Ltd. v. State of Orissa, 1972 83 ITR 26 and CIT v. Datta Nagari Sah Pat Sanstha Maryadit,2010 322 ITR 13 in support of the submissions.;