Gurushantappa N. Lature, V. Income-tax Officer,

CO 83/PUN/2014

• Counselvise Citation: [2015] 123 COUNSELVISE.COM (IT) 0282 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 20 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 22-01-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 17-12-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 02-09-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B C MALAKAR
• Keywords: Bonafide belief; Initiation of penalty proceedings; Reasonable cause; Tax effect; Condonation of delay
• Section: 273B; 143(3); 12

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NOS.1339 & 1340/PN/2013 ASSESSMENT YEAR: 2009-10 THE ADDL. COMMISSIONER OF INCOME TAX, RANGE 3, NANDED . APPELLANT VS. SHRI GURUSHANTAPPA NAGAPPA LATURE SIGNAL CAMP, LATUR. . RESPONDENT PAN: AAIPL4744N CO NOS.83 AND 84/PN/2014 ASSESSMENT YEAR: 2009-10 SHRI GURUSHANTAPPA NAGAPPA LATURE SIGNAL CAMP, LATUR. . CROSS OBJECTOR PAN: AAIPL4744N VS. THE ADDL. COMMISSIONER OF INCOME TAX, RANGE 3, NANDED . RESPONDENT ASSESSEE BY : SHRI S.N. PURANIK REVENUE BY : SHRI B.C. MALAKAR DATE OF HEARING : 19-12-2014 DATE OF PRONOUNCEMENT : 22-01-2015 ORDER PER SUSHMA CHOWLA, JM: OUT OF THIS BUNCH OF APPEALS AND CROSS OBJECTIONS, THE AP PEALS FILED BY THE REVENUE ARE AGAINST THE SEPARATE ORDERS OF CIT(A), AURANGABAD, BOTH DATED 02.04.2013 RELATING TO ASSESSMENT YEAR 2009- 10 AGAINST LEVY OF PENALTY UNDER SECTIONS 271D AND 271 E OF THE INCOME TAX ACT, RESPECTIVELY. THE ASSESSEE HAS FILED THE CROSS OBJECTIONS AGAINST BOTH THE APPEALS FILED BY THE REVENUE. ITA NOS.1339 AND 1340/PN/2013 CO NOS.83 AND 84/PN/2014 SHRI GURUSHANTAPPA N. LATURE 2 2. SINCE THE CAPTIONED APPEALS AND CROSS OBJECTIONS PE RTAIN TO THE SAME ASSESSEE, WERE HEARD TOGETHER AND ARE BEING ADJU DICATED BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 3. THE REVENUE IN ITA NO.1339/PN/2013 HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE PENALTY ON THE BASIS OF THE DEC ISIONS RELIED UPON BY THE ASSESSEE. 2. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN HOLDING THAT THE AMOUNT REPAID IS NOT LOAN O R DEPOSIT WHICH IS JUST REPAYMENT OF ADVANCE TAKEN FOR MONETARY B ENEFIT. 3. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN HOLDING THAT THE AMOUNTS REPAID TO THE CLOSE D RELATIVE IS NOT COVERED UNDER SECTION 269T OF THE I.T. ACT, 1961. 4. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN HOLDING THAT THE AMOUNT REPAID IS BONAFIDE RELIEF AS A REASONABLE CAUSE AS ENVISAGED BY SECTION 273B OF THE I.T. ACT, 1961. 5. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE GROUNDS OF APPEAL. 4. THE REVENUE IN ITA NO.1340/PN/2013 HAS RAISED THE FO LLOWING GROUNDS OF APPEAL:- 1. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN DELETING THE PENALTY ON THE BASIS OF THE DEC ISIONS RELIED UPON BY THE ASSESSEE. 2. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN HOLDING THAT THE AMOUNT RECEIVED IS NOT LOAN OR DEPOSIT WHICH IS JUST ADVANCE FOR MONETARY BENEFIT. 3. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN HOLDING THAT THE AMOUNTS RECEIVED FROM THE CLOSED RELATIVE IS NOT COVERED UNDER SECTION 269SS OF THE I.T. ACT, 19 61. 4. ON THE FACTS AND THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN HOLDING THAT THE AMOUNT RECEIVED IS BONAFID E RELIEF AS A REASONABLE CAUSE AS ENVISAGED BY SECTION 273B OF THE I.T. ACT, 1961. 5. THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR ALTER ANY OF THE GROUNDS OF APPEAL. ITA NOS.1339 AND 1340/PN/2013 CO NOS.83 AND 84/PN/2014 SHRI GURUSHANTAPPA N. LATURE 3 5. THE ASSESSEE IN CO NO.83/PN/2014 HAS RAISED THE FOLLOW ING GROUNDS OF OBJECTIONS:- 1) CROSS OBJECTOR PRAYS TO CONFIRM THE ORDERS PASSED BY CIT (A) 2) CROSS OBJECTOR PRAYS TO DECLARE THAT ORDER U/S 271E PASSED BY ADDL. CIT IS BAD IN LAW AS THE SAME IS TIME BARRED. 3) CROSS OBJECTOR PRAYS TO DECLARE THAT APPEAL FILED BY DEPARTMENT ARE INCOMPETENT, AS GROUNDS ARE SIGNED BY ITO, WHO HAS NO AUTHORITY TO LEVY PENALTY, PENALTY IS LEVIED BY ADDL. CIT. 4) WITHOUT PREJUDICE TO ABOVE GROUNDS AND WITHOUT ACCEPTING LEVIABILITY OF PENALTY U/S 271E. HOWEVER, FOR ANY REASON LEVY IS UNHELD THEN PENALTY MAY BE REDUCED WHICH IS LEVIED ON TRANSACTIONS WITH VIVEK LATURE, AS TH ESE DO NOT CONTRAVENE THE PROVISION OF SEC 269SS AND OTHER SUC H TRANSACTIONS. 5) ORDER OF PENALTY PASSED BY ADDL. CIT IS BAD IN LAW AS SAME IS NOT IN TERMS OF SECT 271E. 6) CROSS OBJECTOR PRAYS TO ADD, ALTER, AMEND AND/OR WITHD RAW THE GROUNDS OF CROSS OBJECTIONS. 7) CROSS OBJECTOR PRAYS FOR CONDONATION OF DELAY. 6. THE ASSESSEE IN CO NO.84/PN/2014 HAS RAISED THE FOLLOW ING GROUNDS OF OBJECTIONS:- 1) CROSS OBJECTOR PRAYS TO CONFIRM THE ORDERS PASSED BY CIT (A) 2) CROSS OBJECTOR PRAYS TO DECLARE THAT ORDER U/S 271D PASSED BY ADDL. CIT IS BAD IN LAW AS THE SAME IS TIME BARRED. 3) CROSS OBJECTOR PRAYS TO DECLARE THAT APPEAL FILED BY DEPARTMENT ARE INCOMPETENT, AS GROUNDS ARE SIGNED BY ITO, WHO HAS NO AUTHORITY TO LEVY PENALTY, PENALTY IS LEVIED BY ADDL. CIT. 4) WITHOUT PREJUDICE TO ABOVE GROUNDS AND WITHOUT ACCEPTING LEVIABILITY OF PENALTY U/S 271D. HOWEVER, FOR ANY REASON LEVY IS UNHELD THEN PENALTY MAY BE REDUCED WHICH IS LEVIED ON TRANSACTIONS WITH LATURE BROTHERS AN D VIVEK LATURE, AS THOSE DO NOT CONTRAVENE THE PROVISION OF SEC 269SS AND OTHER SUCH TRANSACTIONS. 5) ORDER OF PENALTY PASSED BY ADDL. CIT IS BAD IN LAW AS SAME IS NOT IN TERMS OF SECT 271D. 6) CROSS OBJECTOR PRAYS TO ADD, ALTER, AMEND AND/OR WITHD RAW THE GROUNDS OF CROSS OBJECTIONS. 7) CROSS OBJECTOR PRAYS FOR CONDONATION OF DELAY. ITA NOS.1339 AND 1340/PN/2013 CO NOS.83 AND 84/PN/2014 SHRI GURUSHANTAPPA N. LATURE 4 7. THE CROSS OBJECTIONS FILED BY THE ASSESSEE WERE FILED AFT ER A DELAY OF 127 DAYS. THE LEARNED AUTHORIZED REPRESENTATIV E FOR THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION OF DELAY IN FILING THE CROSS OBJECTIONS LATE BY 127 DAYS ALONG WITH THE AFFIDAVIT OF THE ASSESSEE. THE PLEA OF THE ASSESSEE WAS THAT HE WAS A MAN OF 72 YEARS AGE AND FOR THE FIRST TIME, HE HAD APPROACHED THE APPELLAT E FORUM WITH REGARD TO HIS TAX ASSESSMENT AND PENALTY PROCEEDIN GS FOR THE CONTRAVENTION OF RECEIPT OF CASH ADVANCES FROM HIS FAMILY M EMBERS AND FAMILY CONCERN AND ALSO CASH PAYMENTS. HE FURTHER C LAIMS THAT HE WAS CONSULTING SHRI CHANDRAKANT MAMDAPURE FROM UDGIR, WHO USED TO REPRESENT HIS APPEALS BEFORE THE CIT(A) UNDER TH E GUIDANCE OF ADVOCATE SHRI B.D. SAKRI. ON RECEIPT OF NOTICE FROM INCOME TAX APPELLATE TRIBUNAL, THE SAME WAS FORWARDED TO HIM. HOWEVER , CERTAIN DIFFERENCES OCCURRED AND HIS SON APPOINTED ANOTHER ADVOC ATE SHRI SIDDHESHWARE TO LOOK AFTER AFFAIRS OF THE FAMILY GROUP. THE ASSESSEE CLAIMS THAT MR. MAMDAPURE DID NOT ADVISED HIM FOR ANY FURTH ER ACTION AND BEFORE HEARING OF THE REVENUE APPEAL, HE ADVISED HIM T O APPOINT ANOTHER COUNSEL FROM PUNE. WHEN THE COUNSEL FROM PUNE W AS GIVEN THE PAPERS VIZ. THE REVENUES APPEAL, HE ADVISED THAT CR OSS OBJECTIONS WERE TO BE FILED. CONSEQUENTLY, THERE WAS A DELAY OF ABO UT FOUR MONTHS IN FILING THE APPEAL BEFORE THE TRIBUNAL. THE ASSESS EE HAS THUS, MADE A PRAYER FOR CONDONATION OF THE DELAY IN FILING T HE APPEAL LATE BY 127 DAYS. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE PLACED RELIANCE IN THIS REGARD, ON THE RATIO LAID DOWN BY THE HONBLE SUPREME COURT IN COLLECTOR, LAND ACQUISITION VS. MST . KATIJI AND OTHERS (1987) 167 ITR 471 (SC). ITA NOS.1339 AND 1340/PN/2013 CO NOS.83 AND 84/PN/2014 SHRI GURUSHANTAPPA N. LATURE 5 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVE NUE STRONGLY OPPOSED THE CONDONATION OF DELAY IN FILING THE CR OSS OBJECTIONS BY THE ASSESSEE. 9. THE PRESENT CROSS OBJECTIONS WERE FILED AFTER A DELAY OF 127 DAYS. THE ASSESSEE HAS FILED AN AFFIDAVIT ON RECORD STATING THE REASONS FOR THE DELAY. THE HONBLE SUPREME COURT IN COLLECTOR, LAN D ACQUISITION VS. MST. KATIJI AND OTHERS (1987) 167 ITR 471 (S C) HAD HELD THAT THE POWER TO CONDONE THE DELAY FOR SUFFICIENT C AUSE IS FOR DOING SUBSTANTIAL JUSTICE. THE HONBLE SUPREME COURT FUR THER HELD THAT EVERY DAYS DELAY MUST BE EXPLAINED DOES NOT IMPLY A PEDANTIC APPROACH. THE DOCTRINE MUST BE APPLIED IN A RATIONA L, COMMON SENSE AND PRAGMATIC MANNER. WE FIND MERIT IN THE PLEA RAISED BY THE ASSESSEE IN VIEW OF THE RATIO LAID DOWN BY THE HONBLE SUP REME COURT IN COLLECTOR, LAND ACQUISITION VS. MST. KATIJI AND OTHERS (SUP RA) AND WE CONDONE THE DELAY OF 127 DAYS IN FILING THE CROSS OBJECTIONS. 10. THE ASSESSEE IN THE CROSS OBJECTIONS HAS RAISED TH E ISSUE AGAINST THE APPEAL FILED BY THE DEPARTMENT BEING INCOMPLETE WHERE THE GROUNDS WERE SIGNED BY ITO, WHO HAD NO AUTHORITY TO LEV Y PENALTY UNDER SECTIONS 271D AND 271E OF THE ACT. ANOTHER GROU ND RAISED IN CROSS OBJECTIONS IS THAT THE ORDER PASSED UNDER SECTIO NS 271D AND 271E OF THE ACT IS TIME BARRED AND IS THUS, BAD IN LAW. T HE ASSESSEE HAS ALSO RAISED A GROUND AGAINST THE SCALING DOWN OF PENA LTY UNDER SECTIONS 271D AND 271E OF THE ACT. 11. THE REVENUE ON THE OTHER HAND, IS IN APPEAL AGAINST THE DELETION OF PENALTY LEVIED UNDER SECTIONS 271D AND 271E OF THE ACT. 12. THE BRIEF FACTS OF THE CASE ARE THAT, THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF LAND DEVELOPERS. DURING THE YEAR UNDER APPEAL, THE ITA NOS.1339 AND 1340/PN/2013 CO NOS.83 AND 84/PN/2014 SHRI GURUSHANTAPPA N. LATURE 6 ASSESSEE HAD RECEIVED SUM OF RS.74,28,580/- IN CASH FROM H IS CLOSE RELATIVES I.E. HIS WIFE, SONS AND ALSO FAMILY CONCERNS I.E. PARTN ERSHIP FIRM IN WHICH, THE ASSESSEE AND HIS FAMILY MEMBERS WERE PAR TNERS. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE AMOUNTS RE CEIVED WERE IN CONTRAVENTION TO THE PROVISIONS OF SECTION 269SS OF THE ACT AND WERE ALSO WITHOUT REASONABLE CAUSE AND HENCE, PENALTY OF RS.74 ,28,580/- WAS LEVIED UNDER SECTION 271D OF THE ACT. 13. THE CIT(A) NOTED THAT WHILE COMPLETING ASSESSMENT IN R ESPECT OF UNSECURED LOANS OF RS.1.10 CRORES, THE ASSESSING OFFICER HA D MADE ADDITION OF RS.35,71,420/- IN RESPECT OF LOAN FROM SUYOG UR JA PVT. LTD. RECEIVED BY BANK CHEQUE. HOWEVER, THE REMAINING LOANS OF RS.74,28,580/- WERE ACCEPTED AS EXPLAINED. THE ASSESSING OFFICER DID NOT INITIATE ANY PENALTY PROCEEDINGS UNDER SECTION 274 R. W.S. 271D OF THE ACT IN THE ASSESSMENT ORDER. THE ADDL.CIT, RANGE-3, NANDED IN THE PENALTY ORDER HAD STATED THAT IT WAS NOT NECESSAR Y TO RECORD SATISFACTION ABOUT LEVY OF PENALTY UNDER SECTION 271D OF TH E ACT IN THE ASSESSMENT ORDER ITSELF AND THE ASSESSING OFFICER HAD REC ORDED HIS SATISFACTION FOR INITIATION OF PENALTY PROCEEDINGS IN HIS LETTER DATED 09.04.2012. AS PER THE ADDL.CIT, NANDED, THE AMOUNTS ADVA NCED BY THE SONS AND OTHER FAMILY MEMBERS TO THE ASSESSEE FOR THE PURPOSE OF PURCHASE OF AGRICULTURAL LAND IN HIS OWN NAME WERE NOT AN ADVANCE BUT THE SAME WERE UNSECURED LOAN. THE ADDL.CIT ALSO NO TED THAT THE ASSESSEE HAD PURCHASED VARIOUS PIECES OF LAND DURING THE YEAR AND HAD REPEATED THE TRANSACTIONS, WHICH MAKES IT CLEAR THAT THE ASSESSEE HAD CONDUCTED BUSINESS ACTIVITY. IN THE ABSENCE OF ANY REASONABLE CAUSE FOR ACCEPTING THE CASH LOANS IN CONTRAVENTION OF PR OVISIONS OF SECTION 269SS OF THE ACT, THE ADDL.CIT LEVIED PENALTY UNDER SECTION 271D OF THE ACT. FURTHER, THE ASSESSEE DURING THE YEAR UNDER APPEAL ITA NOS.1339 AND 1340/PN/2013 CO NOS.83 AND 84/PN/2014 SHRI GURUSHANTAPPA N. LATURE 7 HAD REPAID AMOUNT OF RS.17,05,000/- IN CASH TO HIS RELATIVES , THE SAME WAS HELD TO BE IN VIOLATION OF THE PROVISIONS OF SECTIO N 269T OF THE ACT AND PENALTY OF RS.17,05,000/- WAS LEVIED UNDER SE CTION 271E OF THE ACT. 14. BEFORE THE CIT(A), THE ASSESSEE MADE SUBMISSIONS WHICH ARE REPRODUCED UNDER PARA 5 AT PAGES 5 TO 7 OF THE APPELLA TE ORDER. THE ASSESSEE ALSO RAISED THE LEGAL / TECHNICAL OBJECTIONS AGA INST RECORDING OF SATISFACTION FOR INITIATING THE PENALTY PROCEEDINGS UNDER SECTION 271D OF THE ACT IN THE ASSESSMENT ORDER. THE CIT(A) VID E PARA 8 OBSERVED AS UNDER:- 8. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND RIVAL CONTENTIONS. ON PERUSAL OF THE SUBMISSION OF THE LD.AR OF THE APPELLANT BEFORE THE ADDL.CIT, RANGE-3, NANDED AND BEFORE THE UNDERSIGNED, IT HAS BEEN NOTICED THAT THE APPELLAN T HAS CLAIMED THAT PROVISIONS OF SECTION 269SS ARE NOT APP LICABLE IN THE CASE OF THE APPELLANT FOR THE FOLLOWING REASONS (1) THE PROVISIONS OF SECTION 269SS ARE APPLICABLE IN R ESPECT OF LOANS AND DEPOSITS RECEIVED, WHEREAS IN THE CASE UNDER APPEAL THE AMOUNT ADVANCED IS TOWARDS MONITORY HELP TO A CLO SE RELATIVE I.E. THE APPELLANT. THE CONTENTION IS SUPPORTED BY THE DECISION IN THE CASE OF MUTHOOT M. GEORGE BROTHERS VS. ACIT (1993) 47 TTJ 434 (COCHIN) WHEREIN IT HAS BEEN HELD THAT TRANSFER OF FUNDS FROM ONE SISTER CONCERN TO ANOTHER CONCERN WILL NOT ASSUM E THE CHARACTER OF LOAN ESPECIALLY WHEN THE DECISIONS TO TA KE OUT FUNDS AND UTILIZE THE FUNDS IS TAKEN BY SAME GROUP OF INDIVIDUA LS. (2) THE CLOSE RELATIVES CANNOT BE REGARDED AS 'ANY OTH ER PERSON' REFERRED TO IN SECTION 269SS OF THE ACT. THE SAID EX PRESSION 'ANY OTHER PERSON' DENOTES A PERSON NOT CLOSELY CONNECTED TO THE ASSESSEE. THIS PROPOSITION IS SUPPORTED BY THE DECIS ION IN THE CASE OF CANARA HOUSING DEVELOPMENT COMPANY VS. ADDL.CI T (2009) 30 DTR 232 (BANGALORE TRIB.). (3) THE PAYMENTS RECEIVED AND REPAYMENT MADE PURSUAN T TO CURRENT ACCOUNT MAINTAINED BETWEEN THE PARTIES COULD NOT BE CONSIDERED AS IN VIOLATION OF SECTION 269SS AND 269 T. THIS PROPOSITION OF LAW IS SUPPORTED BY THE DECISION IN T HE CASE OF CIT VS. IDHAYAM PUBLICATIONS LTD. (2006) 285 ITR 221 (MADRAS). (4) THE SAID AMOUNTS RECEIVED FROM CLOSE RELATIVES HA VE BEEN ACCEPTED TO BE GENUINE TRANSACTIONS IN THE ASSESSMEN T MADE U/S 143(3) OF THE ACT AND THE BREACH, IF ANY, IS ONLY A TECH NICAL BREACH WHICH DOES NOT ATTRACT PENALTY U/S 271D. THIS PROPO SITION OF LAW IS SUPPORTED BY THE DECISION IN THE CASE OF OMEC EN GINEERS VS CIT (2008) 217 CTR 144, 294 ITR 599 (JHARKHAND). ITA NOS.1339 AND 1340/PN/2013 CO NOS.83 AND 84/PN/2014 SHRI GURUSHANTAPPA N. LATURE 8 (5) ALL THE PARTIES INVOLVED IN THE TRANSACTION ARE T AX PAYERS AND HAVE REFLECTED THE AMOUNTS ADVANCED AND AMOUNTS RECEIVED IN THEIR BOOKS OF ACCOUNTS 'AND RETURNS OF INCOME F ILED AND HENCE THE TRANSACTIONS HAVE NOT BEEN AIMED AT CAMOUFLAGING ANY UNACCOUNTED MONEY AND THERE IS NO REBUTTAL TO THE AS SERTION OF THE ASSESSEE THAT SUCH TRANSACTIONS HAVE BEEN ACCEP TED U/S 143(3) AFTER SCRUTINY. 15. THE CIT(A), THEN PLACED RELIANCE ON THE RATIO LAID DOWN BY PUNE BENCH OF THE TRIBUNAL IN BHOJWANI BROTHERS AND CONSULTANC Y SERVICES (P) LTD. VS. JCIT IN ITA NO.1009/PN/2002, ORDER DATED 30.04 .2003 AND HELD VIDE PARA 8.4 AS UNDER:- 8.4 IN VIEW OF THE ABOVE FACTS AND DISCUSSION AND I N VIEW OF THE RATIO LAID DOWN BY THE VARIOUS DECISIONS REFERRED T O ABOVE, I AM OF THE CONSIDERED VIEW THAT THE APPELLANT WAS UNDER BON AFIDE BELIEF THAT THE TRANSACTIONS WITH RELATIVES AND SISTER CONC ERNS ARE NOT COVERED BY PROVISIONS OF SECTION 269SS AND THE ABOV E BONAFIDE BELIEF IS REASONABLE CAUSE AS ENVISAGED BY PROVISION S OF SECTION 273B OF THE ACT AND HENCE THE A.O. IS NOT JUSTIFIED I N LEVYING PENALTY OF RS.74,28,580/- U/S 271D OF THE ACT. THE PE NALTY OF RS.74,28,580/- LEVIED U/S 271D OF THE ACT IS CANCELLED. T HE A.O. IS DIRECTED ACCORDINGLY. 16. THE REVENUE IS IN APPEAL AGAINST THE ORDER OF CIT(A). THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE REFE RRED TO THE OBSERVATIONS OF THE ASSESSING OFFICER AND POINTED OUT THAT THERE WAS NO REASON WHY THE AMOUNT WAS RECEIVED IN CASH. 17. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSE SSEE POINTED OUT THAT AMOUNTS WERE RECEIVED FROM THE RELATIVES AND FA MILY CONCERNS UNDER BONAFIDE BELIEF THAT CASH TRANSACTIONS WERE ACCEPTA BLE AND THE AMOUNT WAS UTILIZED FOR PURCHASE OF AGRICULTURAL LAND. BECAU SE OF THE CIRCUMSTANCES WHERE THE ASSESSEE HAD REASONABLE CAUSE IN ACCEPTING THE SAID ADVANCES, THERE WAS NO MERIT IN LEVY OF PENALTY UNDER SECTION 271D OF THE ACT. SIMILARLY, THE CASH LOANS WERE REPAID IN CASH UNDER BONAFIDE BELIEF AND THERE WAS NO MERIT IN LEVY OF PENALTY UND ER SECTION 271E OF THE ACT. ITA NOS.1339 AND 1340/PN/2013 CO NOS.83 AND 84/PN/2014 SHRI GURUSHANTAPPA N. LATURE 9 18. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE REVENUE IS IN APPEAL AGAINST THE ISSUE OF DELETION OF PE NALTY LEVIED UNDER SECTION 271D OF THE ACT FOR VIOLATION OF PROVISIONS OF SECTION 269SS OF THE ACT AND ALSO FOR DELETION OF PENALTY LEVIED UND ER SECTION 271E OF THE ACT FOR REPAYMENT OF LOANS IN CASH I.E. VIOLATING THE PROVISIONS OF SECTION 269T OF THE ACT. 19. UNDER THE PROVISIONS OF SECTION 269SS OF THE ACT, IT IS PROVIDED THAT NO PERSON AFTER 30.06.1984 SHALL ACCEPT FROM ANY OTH ER PERSON ANY LOAN OR DEPOSIT OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE DRAFT, WHERE THE AMOUNT OF SUCH LOAN OR D EPOSIT OR AGGREGATE OF SUCH LOAN OR DEPOSIT EXCEEDS RS.20,000/-. T HE PROVISO ENLISTS THE EXCEPTIONS TO SECTION 269SS OF THE ACT. IN CASE A PERSON VIOLATES THE PROVISIONS OF SECTION 269SS OF THE ACT I.E. ACCE PTS CASH LOAN / DEPOSIT EXCEEDING RS.20,000/-, THEN HE IS LIABLE TO LE VY OF PENALTY UNDER SECTION 271D OF THE ACT, WHICH SHALL BE EQUA L TO THE AMOUNT OF LOAN OR DEPOSIT SO TAKEN OR ACCEPTED. HOWEVE R, UNDER THE PROVISIONS OF SECTION 273B OF THE ACT, IT IS PROVIDED THAT P ENALTY IS NOT TO BE IMPOSED IN CERTAIN CASES NOTWITHSTANDING ANYTHING C ONTAINED IN THE PROVISIONS OF THE RELEVANT SECTION MENTIONED THEREIN. THE SECTION 271D OF THE ACT IS INCLUDED AS ONE OF THE SECTION TO WHIC H THE PROVISIONS O SECTION 273B OF THE ACT COULD BE APPLIED. IT IS PROVIDED UNDER THE SAID SECTION THAT WHERE THE PERSON PROVES THAT THERE WAS REASONABLE CAUSE FOR THE FAILURE IN THE AFORESAID SECTIONS, THEN NO PENALTY SHALL BE IMPOSABLE ON SUCH PERSON OR THE ASSESSE E. THE CASE HAS TO BE PUT UP BY THE PERSON OR THE ASSESSEE AS T O EXISTENCE OF REASONABLE CAUSE OF WHICH, THERE WAS FAILURE ON THE PART OF THE PERSON OR THE ASSESSEE RESULTING IN CONTRAVENTION OF THE RELEVAN T PROVISIONS OF THE ACT. ITA NOS.1339 AND 1340/PN/2013 CO NOS.83 AND 84/PN/2014 SHRI GURUSHANTAPPA N. LATURE 10 20. NOW COMING TO THE FACTS OF THE PRESENT CASE, THE AS SESSEE DURING THE YEAR UNDER CONSIDERATION HAD PURCHASED CERTAIN ASS ETS AND THE SAME WAS PARTLY SOURCED OUT OF MONEY RECEIVED FROM HIS FAMILY MEMBERS AND THE CONCERNS IN WHICH HE OR HIS FAMILY MEMBE RS WERE PARTNERS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO PRODUCE THE CONFIRMATION FROM THE SAID PERS ONS. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAD RAISED UNSECUR ED LOANS TO THE EXTENT OF RS.1.10 CRORES, OUT OF WHICH, A SUM OF R S.35,71,420/- WAS RECEIVED FROM SUYOG URJA PVT. LTD. THROUGH BANK CH EQUE AND AS THE ASSESSEE FAILED TO FURNISH THE COMPLETE INFORMATION IN RE SPECT OF THE SAID ADVANCES, THE SAME WAS TREATED AS INCOME OF TH E ASSESSEE BY THE ASSESSING OFFICER WHILE COMPLETING ASSESSMENT UNDER SEC TION 143(3) OF THE ACT. IN RESPECT OF BALANCE CASH LOANS TOTA LING RS.74,28,580/-, NO ADDITION WAS MADE BY THE ASSESSING OFFIC ER. HOWEVER, THE ADDL.CIT INITIATED THE PENALTY PROCEEDING UNDE R SECTION 271D OF THE ACT FOR VIOLATION OF PROVISIONS OF SECTION 269SS OF THE ACT. 21. THE ASSESSEE HAD DURING THE YEAR UNDER CONSIDERATIO N, PURCHASED AN AGRICULTURAL LAND AND FOR THE PURPOSE OF T HE SAID INVESTMENT, CERTAIN LOANS WERE RECEIVED FROM HIS SONS, WIFE AND THE CONCERNS IN WHICH THE ASSESSEE OR HIS FAMILY MEMBERS WE RE PARTNERS. THE CLAIM OF THE ASSESSEE WAS THAT THE MONEY RECEIVED FR OM HIS SONS I.E. SHRI SOMNATH, SHIVSHANKAR, VIVEK AND ARVIND WERE CONTR IBUTIONS FOR THE PURCHASE OF THE AGRICULTURAL LAND WHICH ADMITTEDLY, WAS PURCHASED IN THE NAME OF ASSESSEE ONLY. HOWEVER, BEING THE SONS OF ASSESSEE, THEY HAD RIGHT TO INHERIT THE SAID PROPERTY. F URTHER, AMOUNTS WERE RECEIVED FROM THE DIFFERENT CONCERNS BY WAY OF ADVANCES. ANOTHER ASPECT TO BE NOTED IS THAT THE ASS ESSING OFFICER WHILE COMPLETING THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT, HAD ITA NOS.1339 AND 1340/PN/2013 CO NOS.83 AND 84/PN/2014 SHRI GURUSHANTAPPA N. LATURE 11 REQUISITIONED THE ASSESSEE TO FURNISH THE SOURCES OF INVES TMENT IN THE AGRICULTURAL LAND PURCHASED BY THE ASSESSEE AND THE EXPLANATION OF T HE ASSESSEE WAS THAT, IT HAD RAISED LOANS FROM ITS FAMILY ME MBERS AND CONCERNS. THE SAME WAS ACCEPTED IN TOTO AND NO ADDITIO N WAS MADE BY THE ASSESSING OFFICER, IN THIS REGARD. IN THE TOTALITY O F THE ABOVE FACTS AND CIRCUMSTANCES, WHERE THE ASSESSEE WAS MAKING THE INVESTMENT IN AGRICULTURAL ASSET, THE RAISING OF THE LOANS FRO M THE FAMILY MEMBERS AND FAMILY CONCERNS AND ITS UTILIZATION FOR TH E SPECIFIC PURPOSE OF INVESTMENT IN AGRICULTURAL ASSETS, IN OUR VIEW, DO ES NOT VIOLATE THE PROVISIONS OF SECTION 269SS OF THE ACT, WHERE T HE ASSESSEE HAD RAISED ADVANCES FOR THE SOLE PURPOSE OF INVESTMENT IN AGRICULTURAL LAND. THE SAID ADVANCES RAISED FROM ITS FAMILY MEMBERS AND FAMILY CONCERNS THOUGH RECEIVED IN CASH, ARE NOT IN VIOLATION OF THE PROVISIONS OF SECTION 269SS OF THE ACT, WHICH WAS BROUGHT ON STATU TE IN ORDER TO CURB BLACK MONEY. WHERE THE TRANSACTION WAS BETWEEN A PERSON AND ITS FAMILY MEMBER AND / OR FAMILY CONCERNS, THEN IT CANNOT BE SAID THAT THE SAID TRANSACTION WAS IN VIOLATION OF THE PROVISIONS OF SECTION 269SS OF THE ACT. WHERE, THERE IS TRANSFER OF FUNDS FROM O NE PERSON OF THE FAMILY TO THE OTHER PERSON OF THE FAMILY OR BETWEEN THE FAMILY MEMBERS, IT WOULD NOT ASSUME THE CHARACTER OF LOAN, ESPEC IALLY WHERE THE DECISION HAD BEEN TAKEN BY THE FAMILY MEMBERS FOR TH E PURPOSE OF INVESTMENT IN LAND. SIMILAR VIEW HAS BEEN TAKEN BY COCHIN B ENCH OF THE TRIBUNAL IN MUTHOOT M. GEORGE BROTHERS VS. ACIT (199 3) 47 TTJ 434 (COCHIN). 22. ANOTHER ASPECT OF THE ISSUE IS THAT THE PROVISIONS OF SECTION 269SS OF THE ACT ARE ATTRACTED WHERE A PERSON TAKES OR ACCEPTS FROM ANY OTHER PERSON ANY LOAN OR DEPOSIT OTHERWISE THAN AN ACCOUNT PAYEE CHEQUE OR BANK DRAFT EXCEEDING RS.20,000/-. HENCE THE S AID ITA NOS.1339 AND 1340/PN/2013 CO NOS.83 AND 84/PN/2014 SHRI GURUSHANTAPPA N. LATURE 12 PROVISIONS OF THE ACT ARE ATTRACTED WHERE THE TRANSACT ION IS BETWEEN A PERSON AND ANY OTHER PERSON. FAMILY MEMBERS OF THE AS SESSEE, WHO ARE CLOSELY CONNECTED CANNOT BE SAID TO BE ANY OTHER PERSON IN ORDER TO ATTRACT THE PROVISIONS OF SECTION 269SS OF THE ACT. THE HONBLE PUNJAB & HARYANA HIGH COURT IN CIT VS. SUNIL KUMAR GOEL (2009) 315 ITR 163 (P&H) WHILE DECIDING THE REASONABLE CAUSE VIS--VIS CONT RAVENTION OF THE PROVISIONS OF SECTION 269SS AND 269T OF THE ACT, HA D HELD THAT FAMILY TRANSACTION BETWEEN TWO INDEPENDENT ASSESSEES BASED ON AN ACT OF CASUALNESS, ESPECIALLY IN A CASE WHERE THE DISCLOSURE TH EREOF WAS CONTAINED IN THE COMPILATION OF ACCOUNTS AND WHICH HAS NO TAX EFFECT, ESTABLISHES REASONABLE CAUSE UNDER SECTION 273B OF THE A CT FOR NOT INVOKING THE PENAL PROVISIONS OF SECTION 271D AND 271E OF T HE ACT. SIMILAR RATIO HAS BEEN LAID DOWN BY THE MUMBAI BENCH OF THE TRIBUNAL IN UNIQUE CONSTRUCTIONS VS. CIT (1995) 52 TTJ (BOM) 96. 23. FURTHER, AS POINTED OUT IN THE PARAS HEREINABOVE, THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT UNDER SECTION 143(3 ) OF THE ACT HAS ACCEPTED THE TRANSACTION TO BE A GENUINE TRAN SACTION AND THE VIOLATION IF ANY, OF THE PROVISIONS OF SECTION 269SS OF THE ACT , HAVE A TECHNICAL BREACH, DOES NOT ATTRACT THE LEVY OF PENALTY UN DER SECTION 271D OF THE ACT. THE SAID PROPOSITION OF LAW HAS BEEN LAID DOWN BY THE HONBLE JHARKHAND HIGH COURT IN OMEC ENGINEERS VS C IT (2008) 294 ITR 599 (JHARKHAND). 24. ANOTHER ASPECT TO BE CONSIDERED IN THE CASE IS THE FINDING OF CIT(A) VIDE PARA 8 (5) IN WHICH, IT HAS BEEN STATED THAT ALL THE PARTIES INVOLVED IN THE TRANSACTION WERE TAX PAYERS AND HAD REFLE CTED THE AMOUNTS ADVANCED, THE AMOUNTS RECEIVED IN THEIR BOOKS O F ACCOUNT AND ALSO IN THE RETURN OF INCOME FILED. THE LEARNED DEPARTM ENTAL REPRESENTATIVE FOR THE REVENUE HAS FAILED TO REBUT THE S AID FINDING OF ITA NOS.1339 AND 1340/PN/2013 CO NOS.83 AND 84/PN/2014 SHRI GURUSHANTAPPA N. LATURE 13 THE CIT(A). THE HONBLE BOMBAY HIGH COURT IN CIT VS. TRIU MPH INTERNATIONAL FINANCE (I) LTD. (2012) 22 TAXMAN.COM 138 (BOM) HAS LAID DOWN THE PROPOSITION THAT IN THE ABSENCE OF FINDING TO THE EFFECT THAT REPAYMENT OF LOAN / DEPOSIT WAS NOT A BONAFIDE TRA NSACTION AND WAS MADE WITH A VIEW TO EVADE TAX, NO PENALTY UNDER SEC TION 271E COULD BE IMPOSED FOR CONTRAVENTION OF PROVISIONS OF SECTION 269T OF THE ACT. 25. IN THE TOTALITY OF THE ABOVE SAID FACTS AND CIRCUMSTAN CES WHERE, THE ASSESSEE WAS UNDER THE BONAFIDE BELIEF THAT THE TRAN SACTION WITH THE FAMILY MEMBERS AND FAMILY CONCERNS WAS NOT COVERED BY THE PROVISIONS OF SECTION 269SS OF THE ACT BEING A REASONABLE CAUSE AS ENVISAGED UNDER SECTION 273B OF THE ACT, DOES NOT ATTRA CT LEVY OF PENALTY UNDER SECTION 271D OF THE ACT. ACCORDINGLY, UPHO LDING THE ORDER OF CIT(A), WE DISMISS THE GROUNDS OF APPEAL RAISED BY THE REVENUE. 26. FURTHER, THE LEVY OF PENALTY UNDER SECTION 271E OF THE ACT ON THE REPAYMENT OF LOAN TO THE SAID FAMILY MEMBERS IN CASH OVER AND ABOVE RS.20,000/- IS IN LINE WITH THE REASONING HEREINABOVE, IS NOT ATTRACTED. WE UPHOLD THE ORDER OF CIT(A) IN THIS REGARD ALSO AND DISM ISS THE GROUNDS OF APPEAL RAISED BY THE REVENUE. 27. THE ASSESSEE HAS FILED THE CROSS OBJECTIONS ALLEGING T HAT THE ORDER LEVYING PENALTY UNDER SECTIONS 271D AND 271E OF TH E ACT ARE TIME BARRED. ANOTHER OBJECTION RAISED BY THE ASSESSEE IS THAT, WHERE THE ORDER OF PENALTY HAS BEEN PASSED BY THE ADDL.CIT, W HO IS AUTHORIZED TO LEVY PENALTY UNDER SECTION 271D AND 271E OF THE ACT, THE APPEAL MEMO SIGNED BY THE ASSESSING OFFICER IS WITHOUT JURISDICTION. IN VIEW OF OUR ORDER DELETING THE PENALTY LEV IED UNDER ITA NOS.1339 AND 1340/PN/2013 CO NOS.83 AND 84/PN/2014 SHRI GURUSHANTAPPA N. LATURE 14 SECTIONS 271D AND 271E OF THE ACT, WE ARE NOT ADDRESSIN G THE GROUNDS RAISED IN CROSS OBJECTIONS FILED BY THE ASSESSEE BEING OF A CADEMIC IN NATURE. THUS, THE CROSS OBJECTIONS FILED BY THE ASSESSEE ARE DISMISSED. 28. IN THE RESULT, BOTH APPEALS OF THE REVENUE AND CRO SS OBJECTIONS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS THE 22 ND DAY OF JANUARY, 2015. SD/- SD/- (R.K. PANDA) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER PUNE, DATED: 22 ND JANUARY, 2015. GCVSR COPY OF THE ORDER IS FORWARDED TO : - 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT(A), AURANGABAD; 4) THE CIT, AURANGABAD; 5) THE DR B BENCH, I.T.A.T., PUNE; 6) GUARD FILE. BY ORDER //TRUE COPY// ASSISTANT REGISTRAR I.T.A.T., PUNE