DARSHANA DEVI ,PANIPAT V. JCIT, PANIPAT RANGE , PANIPAT

ITA 1309/DEL/2018

AI Insights

The case involves penalties levied against Darshana Devi for accepting cash loans and repaying part of them in cash, which were alleged violations of sections 269SS and 269T of the Income Tax Act, 1961. The penalties were imposed following a CBI investigation that uncovered cash transactions related to a property sale. The Tribunal considered the appellant's arguments that the cash transactions were necessitated by the urgent need to comply with CBI demands under distressing circumstances, and that the loans were from agriculturists who preferred anonymity due to fear of CBI actions. The Tribunal found merit in these arguments, leading to the quashing of the penalties.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 40081 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR DHANESTA
• Assessee Lawyers: RAKESH JAIN
• Keywords: Set aside; Reasonable cause
• Section: 274; 271D; 271E

Judgement Text

" Page 1 of 7 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’: NEW DELHI BEFORESHRI YOGESH KUMAR US, JUDICIAL MEMBER AND SHRI AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER ITA No.1308 & 1309/Del/2018, A.Y. 2012-13 Darshana Devi 38/20, 8 Marla, Tatal Road, Panipat Haryana PAN: BMWPD4902M JCIT, Panipat Range, Panipat (Appellant) (Respondent) Appellantby Sh. Rakesh Jain, Advocate Respondent by Sh. Rajesh Kumar Dhanesta, Sr. DR Date of Hearing 27/01/2025 Date of Pronouncement 31/01/2025 ORDER PER AVDHESH KUMAR MISHRA, AM Since the facts of these cases relevant for deciding these appeals are common; therefore, these cases were heard together and are being disposed of by a common order. 2. The appeal ITA No. 1308/Del/2018 is in respect of penalty levied under section 271D of the Income Tax Act, 1961 (hereinafter, the ‘Act’) whereas the appeal ITA No.1309/Del/2018 is in respect of penalty ITA No.1308 & 1309/Del/2018 Page 2 of 7 levied under section 271E of the Act. These penalty cases are in challenge, by the assessee, before us. 3. The relevant facts giving rise to these appeals are that the assessee had entered into an agreement to sale of a plot to Mr. Ashwani Kumar, a Government Employee. The Central Bureau of Investigation (hereinafter, the ‘CBI’) had searched the residential and office premises of Mr. Ashwani Kumar, wherein they found one agreement to sale for acquiring a plot in the name of Mrs. Meenakshi Mansotra, wife of Mr. Ashwani Kumar. As per this agreement to sale, Mr.Ashwani Kumar had paid Rs.30,00,000/- on-money in cash to the assessee. Consequent to the search operations, the CBI team covered the assessee’s premises also. The assessee, in the statement, admitted the receipt of on-money of Rs.30,00,000/- in cash from Mr. Ashwani Kumar. Thereafter, the CBI asked the assessee to handover the said crime money of Rs.30,00,000/- to the CBI. The appellant/assessee, who was in possession of Rs.13,00,000/- on 03.09.2013 (the date on which the CBI covered her premises), handed over the same to the CBI team. For handing over the remaining cash of Rs.17,00,000/-, she requested for more time. To which, the CBI team agreed. It was stated that the CBI team allowed her three days to do so. Meanwhile, she borrowed Rs.17,00,000/- from following persons: ITA No.1308 & 1309/Del/2018 Page 3 of 7 Mr. Amit Kaushik Rs.4,00,000/- Mr. Naveen Kaushik Rs. 3,50,000/- Mr. Satbir Kaushik Rs.2,40,000/- Mr. Jagdish Rs.4,00,000/- Mr. Ramphal Rs.3,10,000/- Total Rs.17,00,000/- 3.1 The CBI team came again on 07.09.2013. She handed over the cash of Rs.17,00,000/- to the CBI on 07.09.2013. The above mentioned five persons have been stated to be agriculturists. The cases of these five persons were also stated having scrutinized and additions were made in three cases only; namely, Mr. Amit Kaushik, Mr. Jagdish and Mr. Ramphal. However, these persons got relief from the ITAT. It was also stated that the Assessing Officer (hereinafter, the ‘AO’) of Mr. Naveen Kaushik and Mr. Satbir Kaushik did not make any addition on this score. The Joint Commissioner of Income Tax, Panipat Range (hereinafter, the ‘JCIT’), being not convinced with the reasonable cause/ circumstances/facts mentioned above, levied penalty for accepting cash loans aggregating to Rs.17,00,000/- in violation of the provisions of section 269SS of the Act. 3.2 Later on, the cash loan Rs.3,50,000/- taken from Mr. Naveen Kaushik was returned back in cash in violation to the provision of Section 269T of the Act. Therefore, the JCIT, Range Panipat levied penalty of Rs.3,50,000/- under section 271E of the Act. ITA No.1308 & 1309/Del/2018 Page 4 of 7 3.3 Aggrieved, the assessee filed appeals but failed to succeed. 4. Before us, the Ld. Authorized Representative (hereinafter, the ‘AR’) submitted that the assessee had a reasonable cause for accepting the cash loan and repaying part of them in cash. The gist of reasoning of the Ld. AR is as under: i. The appellant/assessee, a middle class, is uneducated and is not well acquainted with the provisions of the Act.Further, the assessee was disturbed and not in a good state of mind due to CBI operations. ii) She had not had much time to arrange Rs.17,00,000/- within 3 days for handing over the same to the CBI as the CBI officials, on 03.09.2013, threatened her to arrestin case of failure of handing over of the sum of Rs.17,00,000/- within the three days. She was not sure to get loans taken through cheque/drafts encashed within three days’ time provided by the CBI. iii) The persons who advanced money to her were agriculturist and that was why they had given cash loans, in anonymity, in the fear of CBI actions on them also. ITA No.1308 & 1309/Del/2018 Page 5 of 7 iv) After the ITAT order as mentioned above, the said loans advanced by those persons treated as unexplained, were found genuine. v) Out of loans of Rs.17,00,000/-, she had returned only the loan of Rs.3,50,000/- to Shri Naveen Kaushik on his insistence. 4.1 The Ld. AR also placed reliance on various judicial pronouncements as mentioned in the penalty orders. 5. On the contrary, the Ld. Sr. DR, highlighting the facts mentioned in the penalty orders and appeal orders, argued vehemently and prayed for dismissal of these appeals. 6. We have heard both the parties and have perused the material available on records. We find merit in the arguments of the Ld. AR that there is a reasonable cause for not only accepting cash loans of Rs.17,00,000/- immediately after the CBI actions on the assessee in the fear of the arrest but also the repayment of part of the loan on insistence of the person who advanced the said loan to the assessee in the dire need as mentioned above. 7. In view of the above observations and facts of the cases, we are of the firm opinion that there are reasonable causes for not levying ITA No.1308 & 1309/Del/2018 Page 6 of 7 penalties under section 271D and 271E r.w.s. 274 of the Act. Accordingly, we set aside the impugned orders and quash the penalties levied by the JCIT, Range Panipat. 8. In the result, both appeals of the assessee are allowed. Order pronounced in the open Court on 31st January, 2025 Sd/- Sd/- (YOGESH KUMAR US) (AVDHESH KUMAR MISHRA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 31/01/2025 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. PCIT/CIT 4. CIT(Appeals) 5. Sr. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "