Commissioner of Income Tax vs T.R. Rengarajan

N.V. Balasubramanian, J.—These two appeals are preferred by the Revenue against the common order of the Income Tax Appellate

Tribunal dated July 14, 2004.

The assessee has taken loans of a total sum of Rs. 9 lakhs from one Selvasundri and Chitra. The Joint Commissioner of Income Tax, finding that

the loans were availed of by the assessee in contravention of the provisions of Section 269SS of the Income Tax Act, 1961, issued a notice to the

assessee to show cause as to why penalty u/s 271D of the Act should not be levied and after finding that the assessee had no reasonable cause for

borrowing the amount in cash, levied penalty u/s 271D of the Act, which was confirmed by the Commissioner of Income Tax (Appeals). The

assessee took the matter in further appeal before the Income Tax Appellate Tribunal and the Appellate Tribunal holding that the assessee had

reasonable cause to borrow loans, quashed the penalty. Challenging the order of the Appellate Tribunal, the Revenue has filed these appeals.

We find that the Appellate Tribunal has considered the case of the assessee that the family members of the assessee wanted their money to be

kept in safe custody and to use it as and when required for the business of the assessee and the assessee received the money on a Sunday. The

Appellate Tribunal has held that merely for the reason that after the amounts were received, the assessee did not utilise the same, it would not go to

show that there was no business requirement for the assessee. We therefore hold that on the facts and circumstances of the case, the Appellate

Tribunal has rightly come to the conclusion that the penalty imposed was not warranted and accordingly, allowed the appeals. We do not find any

reason to interfere with the finding of fact arrived at by the Appellate Tribunal.

Mr. K. Subramaniam, learned senior standing counsel for the Revenue, in his fairness, has brought to our attention the decision of the Supreme

Court in M. Janardhana Rao Vs. Joint Commissioner of Income Tax, wherein the Supreme Court held that in the exercise of the powers u/s 260A

of the Act, the findings of the fact of the Appellate Tribunal cannot be disturbed and there is no scope for interference by the High Court with a

finding recorded, when such finding can be treated to be a finding of fact. We are therefore of the view that there is no substantial question of law

that arises out of the order of the Appellate Tribunal as the Appellate Tribunal has rendered a finding of fact. We do not find any question of law,

much less a substantial question of law that arises for consideration in these appeals. The appeals are therefore dismissed in limine, at the admission

stage itself. Connected TCMP is closed.