M/s. Kesar Enterprises Limited, Mumbai V. Addl. CIT, New Delhi

ITA 1015/DEL/2014

• Counselvise Citation: 101520114 RSA 2014
• Duration Of Justice: 1 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 01-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 20-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GAGAN SOOD
• Keywords: Opportunity of being heard; Reasonable cause
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO. - 1015 /DEL/201 4 (ASSESSMENT YEAR - 200 8 - 09 ) KESAR ENTERPRISES LIMITED, 6 TH FLOOR, ORIENTAL HOUSE, 7, JAMSHEDJI TATA ROAD, CHURCHGATE, MUMBAI - 400020 PAN - AABCK7328R ( APPELLANT) VS ADDL. CIT, RANGE - 6, NEW DELHI (RESPONDENT ) APPELLANT BY NONE RESPONDENT BY SH.GAGAN SOOD, SR.DR ORDER THIS IS AN APPEAL FILED BY THE ASSESSEE ASSAILING THE CORRECTNESS OF THE ORDER DATED 01.11.2013 OF CIT(A) - XII, NEW DELHI PERTAINING TO 2008 - 09 ASSESSMENT YEAR ON THE FOLLOWING GROUNDS: - 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LEARNED CIT(A) - XII, NEW DELHI (HEREINAFTER CALLED THE CIT FOR SHORT) ERRED IN HOLDING THAT THE ADDITIONAL COMMISSIONER OF INCOME TAX CIRCLE RANGE - 6, NEW DELHI WAS JUSTIFIED TO HOLD THAT THE APPELLANT HAD COMMITTED A VIOLATION OF THE PROVISIONS OF SECTION 269T OF THE INCOME TAX ACT, 1961 (HEREINAFTER CALLED THE ACT FOR SHORT). 2. THAT WITHOUT PREJUDICE TO THE GROUND OF APPEAL NO.1 ABOVE, ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, CIT(A) ERRED IN CONFIRMING THE PENALTY OF R S.8,25,000/ - LEVIED BY THE ACIT UNDER THE PROVISIONS OF THE SECTION 271E OF THE ACT BY IGNORING THE PROVISIONS OF SECTION 273B OF THE ACT. 3. THAT THE APPELLANT CRAVES LIBERTY TO ADD, ALTER, VARY OR AMEND ANY GROUNDS OF APPEAL. 2. AT THE TIME OF HEARING, AN ADJOURNMENT PETITION WAS MOVED ON BEHALF OF THE ASSESSEE HOWEVER, CONSIDERING THE MATERIAL AVAILABLE ON RECORD AND THE SUBMISSIONS OF THE LD. SR. DR, IT WAS REJECTED. THE RECORD SHOWS THAT THE AO PASSED AN ORDER U/S 271E R.W.S. 274 HOLDING THAT THE RE - PAYMENT OF THE DATE OF HEARING 01 .0 7 .2015 DATE OF PRONOUNCEMENT 14 .08.2015 I.T.A .NO. - 1015/ DEL/2014 PAGE 2 OF 3 FOLLOWING LOANS TO THE FOLLOWING PERSONS OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE/BANK DRAFT WAS IN CONTRAVENTION OF THE PROVISIONS OF 269T OF THE INCOME - TAX ACT, 1961: - 1. BUSHRA LIQUOR HOUSE, BONDED WAREHOUSE MAHARAJG ANJ RS.25,000/ - 2. HARESH ANEJA, MODEL TOWN STADIUM ROAD, BAREILLY RS.1,00,000/ - 3. UNITED ASSOCIATES, HARDOI RS.1,00,000/ - 4. DEEP WINES & AGENCIES RS.5,00,000/ - 5. NANDLAL JAISWAL RS.1,00,000 / - 2.1. ACCORDINGLY , AFTER ISSUANCE OF SHOW - CAUSE NOTICE TO THE ASSESSEE AND CONSIDERING THE REPLY OF THE ASSESSEE, PENALTY OF RS.8,25,000/ - WAS IMPOSED. THE EXPLANATION OF THE ASSESSEE THAT IT REPRESENTED SECURITY DEPOSIT TO THE EXCISE DEPARTMENT BY THE RESPECTIVE PARTIES O N BEHALF OF THE ASSESSEE COMPANY AND THAT THE AMOUNTS WERE ADJUSTED BY WAY OF JOURNAL ENTRIES AGAINST THE AMOUNT RECEIVABLE IN RESPECT OF SALES OF COUNTRY LIQUOR TO RESPECTIVE PARTIES WAS NOT ACCEPTED. SIMILARLY THE RELIANCE PLACED UPON THE JUDGEMENT OF T HE DELHI HIGH COURT IN THE CASE OF CIT VS NOIDA TOLL BRIDGE CO. LTD. 262 ITR 260 (DEL.) WAS ALSO NOT ACCEPTED BY THE AO . 3. AGGRIEVED BY THIS, THE ASSESSEE CAME IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY . THE SUBMISSIONS ADVANCED ON BEHALF OF THE ASSES SEE ARE FOUND ADDRESSED AT PAGES 3 & 4 OF THE IMPUGNED ORDER. A PERUSAL OF THE SAME SHOWS THAT APART FROM RELYING UPON THE DECISION OF THE DELHI HIGH COURT IN THE CASE OF CIT VS NOIDA TOLL BRIDGE CO. LTD. ( CITED SUPRA) , R ELIANCE WAS ALSO PLACED UPON THE D ECISION OF THE ALLAHABAD HIGH COURT IN THE CASE OF CHAUBEY OVERSEAS CORPORATION VS. CIT 303 ITR 9(ALL.). V ARIOUS SUBMISSIONS ON FACTS WERE ALSO ADVANCED BY THE ASSESSEE. H OWEVER, THE LD. CIT(A) AS WOULD BE EVIDENT FROM THE FOLLOWING FINDING DID NOT ADDRESS EITHER THE ARGUMENTS ADVANCED OR THE CASE LAW RELIED UPON BUT MERELY PROCEEDED TO CONCLUDE THAT THE PENALTY HAS BEEN CORRECTLY LEVIED AND DESERVES TO BE UPHELD. IN THE ABSENCE OF ANY INDEPENDENT DISCUSSION ON FACTS AND ARGUMENTS ADVANCED BY THE A SSESSEE, THE CORRECTNESS OF THE FINDING ARRIVED AT CANNOT BE CONSIDERED. THE RELEVANT FINDING IS REPRODUCED HEREUNDER: - 1.1. I HAVE CONSIDERED THE FACTS STATED BY THE ASSESSEE IN HIS SUBMISSION AND THE GROUNDS RAISED IN APPEAL. THE ASSESSING OFFICER HAS LEV IED PENALTY OF RS.8,25,000/ - U/S 271E R.W.S. 274 OF THE ACT HOLDING THAT THE ASSESSEE HAS MADE REPAYMENT OF SECURITY DEPOSIT TO THE SAID PERSONS (AS MENTIONED IN THE ORDER OF PENALTY/ASSESSMENT) IN CONTRAVENTION OF PROVISIONS OF I.T.A .NO. - 1015/ DEL/2014 PAGE 3 OF 3 SECTION 269T ATTRACTING THE LEVY OF PENALTY U/S 271E. IN MY CONSIDERED VIEW THE PENALTY HAS BEEN CORRECTLY LEVIED. THE CASE LAWS RELIED UPON BY THE APPELLANT PERTAINING TO THE ISSUE ON SECTION 269SS AND NOT ON 269T HENCE DISTINGUISHABLE. IN VIEW OF THIS, THE PENALTY DESERVES TO BE CONFIRMED. GROUNDS RAISED IN APPEAL ARE DISMISSED. 3.1. A PERUSAL OF THE ABOVE FINDING SHOWS THAT NO EFFORT HAS BEEN MADE BY THE LD. FIRST APPELLATE AUTHORITY TO CONSIDER HOW THE RATIO OF THE DECISIONS RELIED UPON ON FACTS ARE DISTINGUISHABLE. SIMILARLY THE ARGUMENTS THAT THE SAID PERSONS WERE CREDITORS OF THE ASSESSEE AND NO T DEBTORS AND REASONABLE CAUSE CANVASSED BY THE ASSESSEE HAS NOT BEEN ADDRESSED. IN FACT WITHOUT CARING TO EVEN CONSIDER THE SUBMISSIONS OF THE ASSESSEE, THE LD. CIT(A ) HAS JUST CONCLUDED THAT THE AO IS JUSTIFIED IN LEVYING THE PENALTY. THE SAID ORDER CANNOT BE SAID TO BE A SPEAKING ORDER AS THE DISCUSSION AS TO WHY THE AO WAS CORRECT IN LE VYING THE PENALTY , C ONSIDERING THE SUBMISSIONS OF THE ASSESSEE IS NOT BROUGHT OUT ON RECORD BY THE LD.CIT(A) . IN VIEW OF TH IS SPECIFIC FACT, THE ADJOURNMENT MOVED BY THE ASSESSEE WAS REJECTED AND IT WAS CONSIDERED APPROPRIATE TO RESTORE THE ISSUE BACK TO T H E FILE O F THE CIT(A) WITH THE DIRECTION TO PASS A SPEAKING ORDER IN ACCORDANCE W ITH LAW AS REGULATED BY THE STATUTORY MANDATE WHICH IS SET OUT IN SECTION 250(6) OF THE INCOME TAX ACT, 1961. NEEDLESS TO SAY THAT A REASONABLE OPPORTUNITY OF BEING HEARD SHALL BE AFFORDED TO THE ASSESSEE. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 1 4 T H OF AUGUST, 2015. S D / - (DIVA SINGH) JUDICIAL MEMBER DATED: 1 4 /08 /2015 * AMIT KUMAR * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI