MAHAK SINGH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) WE have heard Shri Shubham Agrawal, learned counsel appearing for the appellant -assessee. Shri R.K. Upadhyay appears for the Income Tax department.

(2.) THIS Income Tax Appeal filed under Section 260 -A of the Income Tax Act (the Act) arises out of an order of Income Tax Appellate Tribunal, Delhi Bench "D", New Delhi dated 24.12.2008, by which the appeal filed by the appellant -assessee against the penalty under Section 271 -D in respect of assessment year 2005 -06, has been dismissed.

(3.) SHRI Shubham Agarwal, learned counsel appearing for the appellant -assessee submits that the assessee filed return of income declaring of Rs.1,75,796/ as on 1.8.2005. The return was processed under Section 143 (1). The assessee was assessed under Section 143 (3) on the returned income. During the course of proceeding it was noticed by the AO that the assessee had taken loans from four individuals in cash of Rs. 2 lacs each in violating Section 269SS of the Act, which provides all transactions above Rs.20,000/ - to be made through banking channels. A show cause notice under Section 271 -D was issued on 24.5.2007 to provide an opportunity of being heard. The assessee filed written submissions stating that the loan was raised in a very critical and unfavourable situation. The younger brother of the assessee was unemployed. He was involved in the company of bad characters of the area. The family members tried to settle him out of the native place. A company was floated by the family members putting him in the position of Managing Director for the purpose of carrying on business in Delhi. The company M/s A.S. Forex Pvt. Ltd having its head office at BMS -10, Plaza Cinema building, Cannaught Place, New Delhi raised a loan of Rs. 10 lacs from Oriental Bank of Commerce. The father of the assessee stood as guarantor against the loan. The agricultural land of the family was mortgaged by the father to secure the loan. Unfortunately the business of the company failed and the company could not repay the loan leading the bank to initiate recovery and attachment proceeding against the mortgaged property. The situation led the entire family into a crises. As soon as the attachment proceedings started and the notice of the attachment proceedings were served? upon the family, the father of the assessee could not bear the shock and fell ill. The assessee rushed to his native place to see the father. The father requested the assessee to save his ancestral land. The assessee was very much attached with his father? and also with the ancestral agricultural land. The attachment of the property would mean attachment of honour and self respect of the family in their native place. The compelling circumstances forced the assessee to take quick action to save the property. The assessee collected the money from all sources/relatives in a hurry having no time for clearance of bank draft/cheques, as the money had to be paid to the bank to save the property. The evidence of agriculture income/land of the four persons was given in the reply to be treated as exception to the proceeding for penalty.