The court emphasized that the right of appeal is not automatic and is conferred by statute, and that no substantial question of law was involved in the case.

INDIRA BANERJEE, J.

1. Both these appeals are against a judgment and order dated 7th April 2017 passed by the Income Tax Appellate Tribunal, rejecting the appeals being I.T.A.Nos.3011 and 3077/Mds/2016 filed by the appellant assessee against orders dated 29th September 2016 and 18th October 2016 of the learned Commissioner of Income Tax (Appeals)-7, Chennai confirming levy of penalty under Sections 271E and 271D of the Income Tax Act, 1961 (hereinafter referred to as ‘IT Act’) on the appellant assessee, in respect of the assessment year 2012-2013.

2. The appellant Assessee was running a petrol pump and had filed return of income disclosing income of Rs. 5,53,851.00. In course of assessment proceedings, the learned Assessing Officer noted that the Assessee had been maintaining a book, namely, Sundry Debtors ledger, which reflected cash payments and cash receipts from various parties. When the assessment was completed, certain disallowances were made in respect of interest payment under Section 40(a)(ia) of the IT Act, business promotion expenses of Rs.80,153.00 and claim under Chapter VIA for Rs.1,04,864.00.

3. After assessment, the Assessment Officer directed that penalty proceedings under Section 271(1)(c) of the IT Act be initiated separately. Notice under Section 274 of the IT Act was issued to the Assessee on 31st August, 2015. Penalty was levied, as it was found that there had been violation of Sections 269SS and 269T of the IT Act by reason of receipt of cash loan and repayment of loan in cash during the same assessment year. Penalty of Rs.14,40,000.00 was imposed in respect of loan received in cash under Section 271D of the IT Act and further penalty of Rs.14,40,000.00 was imposed under Section 271E of the IT Act in respect of the loan amount repaid in cash.

4. The Assessee appealed against the orders of the Additional Commissioner of Income Tax imposing penalty. The appeals were, however, rejected by the Commissioner of Income Tax (Appeals) by two separate orders dated 29th September 2016 and 18th October 2016 in ITA No.105/CIT(A)-7/2015-16 and ITA No.104/CIT(A)-7/2015-16 respectively. Paragraph No.6 of the order of the Commissioner of Income Tax (Appeals) in ITA No.105/CIT(A)-7/2015-16, which contains a summary of reasons for the decision in the two appeals, is set out herein below :

“6. Penalty under Section 271D of the Act is imposed for violation of the provisions of Section 269SS of the Act. Section 269SS of the Act provides that any loan or deposit shall not be taken or accepted from any other person otherwise than by an account payee cheque or account payee bank draft if,

(a) the amount of such loan or deposit or the aggregate amount of such loan and deposit; or

(b) on the date of taking or accepting such loan or deposit, any loan or deposit taken or accepted earlier by such person from the depositor is remaining unpaid and the amount or the aggregate amount remaining unpaid; or

(c) the amount or the aggregate amount referred to in clause (a) together with the amount or the aggregate amount referred to in clause (b), is twenty thousand rupees or more :

Thus it is clear that no person can accept any loan or deposit of Rs. 20,000/- or more otherwise than by way of an account payee cheque or an account payee draft. The limit of Rs. 20,000/- will also apply to a case even if on the date of taking or accepting such loan or deposit, any loan or deposit taken or accepted earlier by such person from such depositor is remaining unpaid and such unpaid amount along with the loan or deposit to be accepted, exceeds the aforesaid limit. Similarly, penalty under Section 271E of the Act is imposed for violation of the provisions of Section 269T of the Act. Section 269T of the Act provides that any branch of a banking company or a cooperative society, firm or other person shall not repay any loan or deposit.

Otherwise than by an account payee cheque or account payee bank draft drawn in the name of the person, who has made the lo