The main legal point established in the judgment is the admissibility of additional documents and grounds, violation of principles of natural justice, and the reasons for receiving and repaying the loan in cash.

K.B.K. VASUKI, J.

1. The assesee is the appellant herein.

2. Consequent to a survey conducted in the premises of one A. Kananan who was running an unlicenced financing business in the name of Vadamalayaan Finance, certain accounts and supporting documents were impounded. As per the books of accounts in the office of Kannan it was found out that the assessee received loan of Rs. 20,00,000/- and repaid the same in cash. Following the same, the assessee was issued with a show cause notice under Section 271D r/w.269(ss) of the Income Tax Act and after receipt of notice dated 21.02.2012 and similar show cause notice dated 06.08.2012, the assessee filed a letter alongwith copies of letters of income and statement for the assessment years 2008-2009 and 2009-2010 wherein the assessee accepted the receipt of amount and repayment of the same by way of cash. A statement was also recorded from A. Kannan to the effect that he has the practice of lending and receiving back in cash and do not lend or receive back in cheque or draft from anybody. The assessee also filed an affidavit stating that the amount was received and repaid by way of cash. Based on the same, the Joint Commissioner, Pondicherry levied penalty of equal amount in contravention of section 269(ss) for accepting loan in cash and under section 260(T) for repayment of loan in cash. Aggrieved by the order of penalty, the assessee filed an appeal before the Commissioner of Income Tax Under Section 271(D) of the Income Tax Act.

3. One of the main grounds raised before the Commissioner of Appeals is that he was not served with the copy of the statement recorded from A. Kannan and copies of the materials seized from him and the copy of the reference received from the Income Tax Officer, Pondicherry, based on which the penalty was levied and and he was not given any opportunity of cross examining P. Kannan and the same amounts to violation of principles of natural justice.

4. The commissioner of appeals vide his order dated 30.12.2013 decided the grounds raised by the appellant and dismissed the appeal filed by the assessee, which reads as follows:-

“7. Decision and grounds of determination

All the grounds of the appeal raised are against the action of the AO in levying penalty of Rs. 20,00,000/- u/s.271D of the IT Act. I have considered the assessee's submissions as well as the findings given in the order of penalty. The contention of the appellant that he had received Rs. 20 lakhs in its burden of proving with an evidence regarding its plea of reasonable cause to obtain the loan in cash. The insistence of the lender to advance loan in cash cannot be treated as reasonable cause for excusing the appellant from levy of penalty u/s.271D of the IT Act. Therefore, under the facts and circumstances of the case, I am fully in agreement with the view of the AO that penalty of Rs. 20,00,000/- is leviable and uphold the action of the AO in levying penalty of Rs. 20,00,000/- u/s.271D of the IT Act. Hence, all the grounds raised by the appellant are dismissed.”

5. Aggrieved against the same, the appellant/assessee preferred three appeal for the assessment year 2008-2009 and for the assessment years 2008-2009 and 2009-2010 before the Income Tax Appellate Tribunal. Before the Tribunal, the appellant/assessee reiterated the same grounds as raised before the Commissioner of Appeals. The Tribunal has upheld the order of the Commissioner of Income Tax (Appeals) and confirmed the levy of penalty under Section 271(D) on the ground that the different reasons given by the assessee before the different authorities for accepting Rs.20lakh in cash are not acceptable and the different reasons put-forth by the assessee were not substantiated by any document and no explanation was offered by the assessee for his failure to produce any document and the assessee is unable to give any reason for not furnishing the bank statement and copy of the demand notice from the Commercial Tax Office before the Assess