IN THE HIGH COURT OF KERALA AT ERNAKULAM PRESENT : THE HONOURABLE MR. JUSTICE C.N.RAMACHANDRAN NAIR & THE HONOURABLE MR. JUSTICE V.K.MOHANAN THURSDAY, THE 17TH SEPTEMBER 2009 / 26TH BHADRA 1931 ITA.No. 1047 of 2009() ---------------------- ITA.299/COCH/2008 of I.T.A.TRIBUNAL,COCHIN BENCH .................... APPELLANT ----------------------------- THE COMMISSIONER OF INCOME TAX, THRISSUR. BY ADV. SRI.P.K.R.MENON,SR.COUNSEL, GOI(TAXES) SRI.JOSE JOSEPH, SC, FOR INCOME TAX RESPONDENT(S): --------------- SHRI.U.SALIM,57,CHANDRANAGAR, PALAKKAD. THIS INCOME TAX APPEAL HAVING COME UP FOR ADMISSION ON 17/09/2009, ALONG WITH ITA NO. 1152 OF 2009 AND CONNECTED CASES THE COURT ON THE SAME DAY DELIVERED THE FOLLOWING: C .N. RAMACHANDRAN NAIR & V.K. MOHANAN, JJ. -------------------------------------------- I.T.A. Nos. 1047,1152,1156,1277, 1278,1332,1333 & 1371 OF 2009 -------------------------------------------- Dated this the 17th day of September, 2009 JUDGMENT Ramachandran Nair, J. Eight connected appeals arise from the orders of the Tribunal cancelling the penalty levied on the assessee under Section 271D of the I.T. Act for six years and under Section 271E for the remaining two years. The assessee is engaged in money lending and he was also engaged as distributor of films. In the course of business, he as accepted loans in cash and repaid the same also in cash which is a violation of Section 269SS of the Act. Penalty is levied under Section 271D for violation of Section 269SS. Similarly penalty under Section 271E is levied for violation of Section 269T of the Act, inasmuch as the assessee is found to have repaid the loan other than through cheque or demand draft. It is pertinent to note that the assessment ended up with no addition because all the loans and repayments were found to be genuine transactions. CIT (Appeals) himself allowed the appeals substantially and the Tribunal confirmed it, but by cancelling even the 2 penalty sustained in the first appeals. The Tribunal noticed that so far as advances made by the assessee in the course of money lending business is concerned, there is no violation of Section 269SS. We are of the view that the Tribunal's decision is right. So far as acceptance of loans and repayment of the same is concerned, even though there is violation, the assessee has explained the circumstances under which transactions were made in cash. On facts, the Tribunal found that there is justification entitling immunity from penalty to the assessee under Section 273B of the Act. We do not find any substantial question of law arising from the orders of the Tribunal which has accepted the factual circumstances under which violations happened entitling the assessee for immunity from penalty. Consequently all the appeals are dismissed. (C.N.RAMACHANDRAN NAIR) Judge. (V.K. MOHANAN) Judge. kk 3