Boss International Men's Wear V. Additional Commissioner of Income Tax, Range-S, Hyderabad

ITTA/581/2006

AI Insights

The case involves M/s. Boss International Men's Wear, the appellant, contesting a penalty imposed by the Income Tax Department for not disclosing the urgency in obtaining loans in cash, which was a violation of Section 269SS of the Income Tax Act, 1961. The Income Tax Appellate Tribunal had reduced the penalty but upheld the imposition, leading to the current appeal. The appellant argued that similar cases in other High Courts found such penalties to be harsh under similar circumstances. However, the High Court of Telangana found that the facts of those cases were distinguishable and that the Tribunal's decision was supported by the evidence and consistent with the law.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 798050 (HC-TELANGANA)
• Appeal Type: Others
• Pronouncement Date: 28-08-2023
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax v. Lakshmi Trust Co., OMEC Engineers v. Commissioner of Income Tax
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: B SAPNA REDDY
• Assessee Lawyers: R S ASSOCIATES
• Keywords: Cash loan; Income Tax; Penalty; Technical mistake; Urgency
• Section: 260A; 269SS

Judgement Text

"[ 3386 ] IN THE HIGH COURT FOR THE STATE OF TELANGANA AT HYDERABAD MONDAY, THE TWENTY EIGHTH DAY OF AUGUST TWO THOUSAND AND TWENTY THREE PRESENT THE HON'BLE SRI JUSTICE P.SAM KOSHY AND THE HON'BLE SRI JUSTICE LAXMI NARAYANA ALISHETTY tNcOM TAX TRIBUNAL APPEAL No: 581 of 2006 lncome Tax Tribunal Appeal Under Section 2604 of the lncome Tax Act, 1961 arising out of the order of the lncome-Tax Appellate Tribunal, Hyderabad Bench ,A , Hyderabad, in ITA No. 579lHyd/20O3, for assessment year i 999-2000 dated 30-06- 2006 preferred against the Order of the Commissioner of lncome Tax, (AppEALS)V, Hyderabad, ITA No.0357/R-sl}lT(A)-Vt20O2-03,dated:27-01-2003, preferred against the Order of the Additional Commissioner of lncome Tax Range-S, Hyderabad GIR No.M-370, dated 22-O8-2OO2. Between: M/s. Boss lnternational Men's Wear, 5-8-647, Nampally Station Road, Abids, Hyderabad. ...Appellant AND Additional Commissiorier of lncome Tax, Range-S, Hyderabad. ...Respondent Counsel for the Appellant: R.S. ASSOCIATES Counsel f6r the Respondent: MS. B. SAPNA REDDY, rep. SRI J.V. PRASAD, Sr. SC FOR INCOME TAX DEPT. The Court delivered the following: JUDGMENT v--7 ,. THE HON'BLE SRI JUSTICE P.SAM KOSHY AND 1THE HON'BLE SRI JUSTICE LAXMI NARAYANA ALIISHETTY I:.T'.T.A. No.581 of 20O6 Jt pGnil[Ut . @er lJort'ble Si Justice P.SAM KOSIfl) Thc inslant appeal is filed by the appellarrt l-rnder Scction 260 A of thc In<:ome Tax Act, 1961 (for short, 'thc Act') assailir)g t.he order passed by the Income Tax, 1tp-ellaic l'ribtrnal. Hrderabad, Rench 'A' (tbr short, 'the 'lribunal') in i.T.r ,No.579lllyd/2OO3, daled 30.06.2006 lor Lhe Assessment Year 1999-2000. 2. Ileard Mr. 1l'1. Naga Deepak, learned counsel for tite appcllant and {s.Il. Sapna Reddy, learncd Standing Connscl appearirrg on betrall' of Mr. .LV. Pras;:rd, lt:arned Sr:nior Standing Counsel for thc Income-Ta-x Department, lor the responclent 3. Vide above order, ti-rr: 'l'ribi,rnal parLly allowed thc appetrl by ui;hr,.lciing the penalty of {.2,20,000/ a:; against tl-Lc pcnalty t.:!-.()o,oo() / . icv icr.l by thc lcppondent at a figure of - i:t.i,I ...r PSK.J & LN. .I lrta at3 | 20i)6 4. Learned counsel for the appellant challenged the above said order on the ground that two of the High Courts : one by the High Court of Madras in the casc of Commissioner of Income Tax v. Lakshmi Trust Co.i and also ar-iother rendered by the High Court of Jharkhand at Ralchi in the case of OMEC Engineers v. Commissioner of Income Tax2, have, under similar circumstances, held that imposition of penalty merely on the technicai mistake of not disclosing the urgency in obtaining loan in cash shali be harsh and unsustainable. 5. Learned counsel for the appellant further submitted that a perusal of the order passed by the Tribunal itself would accept the fact that the Tribunal also was convinced of the fact that there was no suppression of fact on the part of the appellant. He further contended that the assessing ofhcer as a-Iso the appellate authorities have accepted the transactions conducted to be genuine, and accepting thc ' (2oo8) lol Lr,R. 99 (Mad) ' lzool)zgq l.T.R. 599 (lharkhand) 2 I PSK.J & I- . . ) Irla 58t 1006 transactions to be genuine the penal clause shor:ld not have been invoked 6, However, a perusal of the record would clcarly reflect that the Tribuna-l had taken note of the various tr.arLsactions between the petitioner and five other individuals s;panning for a period between OS.OS. 1997 to I2.O2.199g. However, it is also reflected that the assessing officer as i so the appellate au thorities have been consistent in their stand that the assessee has not been able to disclose the urgency for the taking of loans in excess of t.20,O00/_ in cash which was otherwise in violation of the provisions of Section 26955 of the Act. It was also revea,led from a plain reading of the order of the Tribunal that the appellant also has not been able to produce arry evidence belore lhe: C.I.T. (Appeals) in support ol this conten tion that rhere was urgency for taking the loans in cash, There was no r:nateriar brought before the authorities concerned by the appellant to show that the trzursactions mzrde in cash from the aforesaid fi'.'c persons as is rcflected in the order passed by the Tribu.al rvould fall rvithin the ambit of Sectio, 269SSl of the 3 -.---.--=---.i-- 4 rc ; I'SK..' & t-NA..I rna i8l 2006 ,-).' Act, and thus, the Tribunal helcl that rhe amount of loan received in cash by the appellant from five individuais at different interva-ls of time spanning from 05.08 .1997 to 12.07.1998 would not fall within the ambit of Section 26955 of the Act 7. The judgment referred to by the learned counsel for the appellant in Lakshmi Trust (1 supra) ald OMEC Engineers (2 supra) are distinguishable on its facts itself lor the reason that the authorities therein were convinced of the urgency of receiving the loan in cash utrlike in the present case. Therefore, the principles laid down in the said judgments cannot be applied in a straight-jacket formula in the present factua-l background. 8. We do not find any strong case made out by the appellant for holding that the hndings arrived at by the Tribunal is either contrary to law or contrary to the evidence that has been adduced by the parties 11or carr the same be held to be in any manner arbitrary or illega1. e a PSK..I & L A..I lrra 513l 2006 9. For the aforesaid reasons, we do not find aly merit in the appeal hled by the appellant arrd the appeal deserves to be and is accordingly dismissed. No costs. 1O. As a sequel, miscellaneous applications pending if any in this appeal, shall stand closed. 5 //TRUE COPY// SD/- B.S.CHIRANJEEVI JOINIREGTSTRAR '-fD SEC'IION OFFICER To, kam TJ 1. The lncome-Tax Appellate Tribunal, Hyderabad Bench ' A ' Hyrjerabad(with record, if any). 2. The Commissioner of lncome Tax, (APPEALS)V, Hyderabad. 3. The Additional Commissioner of lncome Tax Range-s, Hyderabad. 4. One CC to [vl/s. R.S. Associates, [OPUC] 5. One CC to SRI J.V. PRASAD, Sr.SC FOR INCOME TAX DEP-[[OPUC] 6. Two CD Copies HIGH COURT DATED:2810812023 JUDGMENT ITTA.No.581 of 2006 THE APPEAL IS DISMISSED rl\": i.- / ti r+ tti lt?X s L.> . :.E 1. .: )', .,-i "