M/s. Ch. Darshan Singh, Jammu V. The Dy. Commissioner of Income-tax, Jammu

CO 3/ASR/2012

• Counselvise Citation: [2013] 122 COUNSELVISE.COM (IT) 8200 (ITAT-AMRITSAR)
• Duration Of Justice: 8 month(s) 14 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 21-01-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 18-01-2013
• Assessment Year: 2003-2004
• Appeal Filed On: 07-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R L CHHANALIA
• Assessee Lawyers: S K BANSAL
• Keywords: Retrospective amendment

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.38(ASR)/2012 ASSESSMENT YEAR:2003-04 PAN :ADCPS8066P DY. COMMR. OF INCOME TAX VS. CH. DARSHAN SINGH CIRCLE-1, JAMMU. S/O SH.GIAN CHAND PROP. M/S. ADVANCE GOODS CARRIER, JAMMU. (APPELLANT) (RESPONDENT) C.O.NO.03(ASR)/2012 (ARISING OUT OF I.T.A. NO.38(ASR)/2012) ASSESSMENT YEAR:2003-04 PAN :ADCPS8066P CH. DARSHAN SINGH, VS. DY. COMMR. OF INCOME TAX, S/O SH. GIAN CHAND PROP. CIRCLE-1, JAMMU. M/S. ADVANCE GOODS CARRIER, JAMMU. (APPELLANT) (RESPONDENT) DEPARTMENT BY:SH.R.L.CHHANALIA, DR ASSESSEE BY: SH.S.K.BANSAL, ADV. DATE OF HEARING: 18/01/2013 DATE OF PRONOUNCEMENT: ORDER ITA NO.38(ASR)2012 CO NO.03(ASR)/2012 2 PER BENCH ; THIS APPEAL OF THE REVENUE ARISES FROM THE ORDER O F THE CIT(A), JAMMU, DATED 01.11.2011 FOR THE ASSESSMENT YEAR 200 3-04. THE ASSESSEE HAS ALSO FILED CROSS OBJECTION. 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPE AL: 1. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) WAS RIGHT IN DELETING THE PENALTY OF RS.3,74,825/- IMP OSED U/S 271E OF THE INCOME TAX ACT, 1961 FOR CONTRAVENTION TO SECTION 269T OF THE ACT. 2. ON THE FACTS AND CIRCUMSTANCES WHETHER THE LD. CIT(A) HAS NOT APPRECIATED THAT THE PENALTY FOR CONTRAVENTION OF PROVISIONS OF SECTION 269T WAS RIGHTLY INITIATED IN THIS CASE AS THE REL EVANT SECTION HAD BEEN AMENDED W.E.F. 01.06.2002 AND THE WORD LOAN HAS ALSO BEEN INCLUDED. THE VIOLATION OF THE SECTION IS AFTER TH E APPLICATION OF AMENDED PROVISIONS ONLY. 3. THE ASSESSEE IN HE C.O. HAS RAISED FOLLOWING GRO UNDS OF APPEAL: 1. THAT THE LD. CIT(A) HAS ALSO NOT BEEN JUSTIFIE D IN LAW IN NOT SETTING ASIDE THE ORDER OF PENALTY ALSO ON THE GRO UND THAT THE ASSESSEE WAS UNDER BONAFIDE OPINION THAT SECTION 269T IS NO T APPLICABLE TO LOANS BY THE INDIVIDUALS AND LOANS TAKEN BY THE IN DIVIDUALS COULD BE RETURNED IN CASH. 4. THE BRIEF FACTS IN THE GROUNDS OF THE REVENUE AN D C.O. OF THE ASSESSE ARE THAT THE AO NOTICED THAT THE ASSESSEE HAS MADE REPAYMENT OF LOAN IN CASH TO TWO PARTIES I.E. M/S. GEE CEE ADVANCE FINANCE PV T. LTD. FOR RS.2,99,425/- AND TO M/S. MOHIT FINANCE CORPN. FOR RS.75,400/- AS PER DETAILS AS GIVEN IN THE PENALTY ORDER AS UNDER: ITA NO.38(ASR)2012 CO NO.03(ASR)/2012 3 (A) M/S. GEE CEE ADV. FIN. PVT. LTD. 1 18.07.2002 CASH RS.1,00,000/- 2. 13.08.2002 CASH RS.1,06,425/- 3. 14.09.2002 CASH RS. 23,000/- 4. 01.01.2003 CASH RS. 40,000/- 5. 20.03.2003 CASH RS. 30,000/- TOTAL RS.2,99,425/- (B) M/S. MOHIT FINANCE CORPN. 1 24.06.2002 CASH RS.35,000/- 2 01.08.2002 CASH RS.40,000/- 5. A SHOW CAUSE NOTICE WAS GIVEN TO THE ASSESSEE BY PENALTY PROCEEDINGS UNDER SECTION 271E AS TO WHY PENALTY PROCEEDINGS U/ S 271E OF THE ACT MAY NOT BE INITIATED FOR CONTRAVENTION OF THE PROVISIO NS OF SECTION 269T OF THE ACT. THE ASSESSEE FILED REPLY VIDE LETTER DATED 02. 04.2009. THE AO WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND ACCORDINGLY LEVIED PENALTY UNDER SECTION 271E OF THE ACT. 6. THE LD. CIT(A) CANCELLED THE PENALTY VIDE PARA 4 .1 OF HIS ORDER WHICH FOR THE SAKE OF CLARITY IS REPRODUCED AS UNDER: ITA NO.38(ASR)2012 CO NO.03(ASR)/2012 4 41. IN THIS BACK GROUND SECTION 271E OF I.T.ACT W AS AMENDED W.E.F. 01.06.2003 TO INCLUDE LOAN, WHEREAS SECTION 269T O F THE AC WAS AMENDED W.E.F. 01.06.2002 RESPECTIVELY. THERE ARE DECIDED CASES PRIOR TO 01.06.2003 WHERE THE COURTS HAVE HELD THAT LOA N WERE NOT INCLUDED IN DEPOSITS. TO OVERCOME AND TO CLEAR T HE INTENTION OF LEGISLATURE THE LOANS WERE ALSO INCLUDED ALAONGW ITH DEPOSITS IN SECTION 271E OF THE I.T. ACT YET ONE FACT REMAINS THAT SUCH INCLUSION WAS FROM THE DATE 01.06.2003 ONLY. IN THE PRESENT CASE ALL INSTANCES OF REPAYMENT AS NOTED RELATE TO THE PERIOD PRIOR TO 0 1.06.2003 HENCE IN MY OPINION NO PENALTY U/S 271E OF THE ACT COULD BE LEVIED, HENCE THE PENALTY LEVIED U/S 271E OF THE I.T. ACT, IS DELETE D. 7. THE LD. DR, MR. R.L.CHHANALIA, RELIED UPON THE O RDER OF THE ASSESSING OFFICER, WHEREAS THE LD.COUNSEL FOR THE A SSESSEE MR. S.K.BANSAL, ADVOCATE RELIED UPON THE ORDER OF THE CIT(A). 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. ON READING OF PROVISIONS OF SECTION 269T, THE WORD LOAN HAS BEEN INTRODUCED IN THE SECTION BY THE FINANCE ACT, 2003 WITH RETROSPECTIVE EFFECT FROM 01.06.2002. THEREFORE, ANY LOAN OR DEPOSIT AFTER 01.06.2002 WHICH HAS BEEN REPAID IN CASH BEYOND LIMIT AS MENTIONED I N SECTION 269T OF THE ACT, WILL BE VIOLATION OF PROVISIONS OF SECTION 269 T OF THE ACT. BUT AT THE SAME, THE PROVISIONS OF SECTION 271E ,IF READ, THE WORD LOAN HAS BEEN INSERTED BY THE FINANCE ACT, 2003 W.E.F. 01.06.2003 FOR LEVY OF PENALTY FOR THE REPAYMENT WHEN THE ASSESSEE FAILS TO COMPLY WIT H THE PROVISIONS OF SECTION 269T OF THE ACT. IN THE PRESENT FACTS AND C IRCUMSTANCES OF THE CASE, EVEN IF THE ASSESSEE HAD VIOLATED THE PROVISIONS OF SECTION 269T OF THE ACT ITA NO.38(ASR)2012 CO NO.03(ASR)/2012 5 FOR THE ASSESSMENT YEAR 2003-04, WE ARE OF THE VIEW THAT PENALTY U/S 271E CANNOT BE LEVIED SINCE THE SAME CAN BE LEVIED ONLY W.E.F. 01.06.2003. SINCE THE LEVY OF PENALTY ON LOAN HAS BEEN INTRODUCED I N SECTION 271E BY THE FINANCE ACT, 2003 W.E.F. 01.06.2003 WHICH IS BEYOND THE SCOPE OF SECTION 271E IN THE IMPUGNED CASE. THE LEGISLATURES IN ITS WISDOM HAS SPECIFICALLY INTRODUCED THIS PROVISIONS W.E.F. 01.06.2003 WHICH ARE PROSPECTIVE AND CANNOT BE HELD TO BE CLARIFICATORY IN NATURE. THE R ELIANCE IS PLACED ON THE DECISION OF THE HONBLE DELHI HIGH COURT, IN THE CA SE OF CIT VS VIKRAMAJIT SINGH REPORTED IN (2007) 292 ITR 274. THE HEAD NOTE OF THE SAID DECISION FOR THE SAKE OF CLARITY IS REPRODUCED HEREUNDER: A DEPOSIT IS DIFFERENT FROM A LOAN. PARLIAMENT WHIL E INTRODUCING THE AMENDMENT TO SECTION 269T AND SECTION 271E OF THE INCOME-TAX AC, 1961, BY THE FINANCE BILL, 2002 CLEARLY RECOGNIZED THE FACT THAT THE EXISTING PROVISION DID NOT HAVE ANY APPLICATION T O LOANS AND THAT THE AMENDMENT TO THE SAME WAS INTENDED TO EXTEND ITS S COPE TO LOANS ALSO. HENCE, LOANS CAME WITHIN THE PURVIEW OF SECT ION 269T AND THE PENALTY PROVISIONS OF SECTION 271E ONLY AFTER THE AMENDMENT WHICH CAME INTO EFFECT FROM JUNE 1,2003. THE FACT THAT T HERE WAS NO CHANGE IN THE MEANING ASSIGNED TO THE EXPRESSION DEPOSIT IN THE EXPLANATION IS WHOLLY INCONSEQUENTIAL. FOR THE ASSESSMENT YEAR 2001-02, THE ASSESSEE CLAI MED TO HAVE MADE CERTAIN REPAYMENT OF WHAT ACCORDING TO IT WAS A LO AN TAKEN FROM A SISTER CONCERN. THE A.O. HELD THAT THIS REPAYMENT WAS CONTRARY TO THE PROVISIONS OF SECTION 269T AND LEVIED PENALTY U/S 271E. THE COMMISSIONER (APPEALS) CANCELLED THE PENALTY AND T HIS WAS CONFIRMED BY THE TRIBUNAL. ON APPEAL TO THE HIGH COURT: ITA NO.38(ASR)2012 CO NO.03(ASR)/2012 6 9. IN THE FACTS AND CIRCUMSTANCES AND THE DECISION OF THE HONBLE DELHI HIGH COURT, IN THE CASE OF CIT VS VIKRAMAJIT SINGH (SUPRA), WE FIND NO INFIRMITY IN THE ORDER OF THE LD. CIT(A), WHO HAS R IGHTLY CANCELLED THE PENALTY LEVIED BY THE A.O. THUS, ALL THE GROUNDS OF THE REVENUE ARE DISMISSED AND ALL THE GROUNDS OF THE ASSESSEE IN TH E C.O. ARE ALLOWED. 10. IN THE RESULT, THE APPEAL OF THE REVENUE IN IT A NO.38(ASR)/2012 IS DISMISSED AND C.O. NO.03(ASR)/2012 OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 21ST JANUARY, 2013. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 21ST JANUARY, 2013 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:CH. DARSHAN SINGH, JAMMU. 2. THE DCIT CIRCLE-1, JAMMU. 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.