Shri Lal Singh Chouhan, Jhabua V. The JCIT ,Range, Jhabua

ITA 104/Ind/2020

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 9950 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 17-02-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S N AGRAWAL
• Keywords: Document seized; Documents seized; Set aside
• Section: 143(3); 271D; 271E; 64

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH, INDORE BEFORE SHRI MANISH BORAD,ACCOUNTANT MEMBER AND MS. MADHUMITA ROY, JUDICIAL MEMBER VIRTUAL HEARING ITA NO.104/IND/2020 ASSESSMENT YEAR:2009-10 SHRI LAL SINGH CHOUHAN 1, GAYATRI GALI JHABUA (M.P.) / VS. JCIT RATLAM (APPELLANT) (R E VENUE ) P.A. NO. ADMPC49181 APPELLANT BY SHRI S.N. AGRAWAL, CA REVENUE BY SHRI HARSHIT BARI, SR. DR DATE OF HEARING: 21.06.2021 DATE OF PRONOUNCEMENT: 27.07.2021 / O R D E R PER MANISH BORAD, A.M: THE ABOVE CAPTIONED APPEAL FILED AT THE INSTANCE O F THE ASSESSEE FOR ASSESSMENT YEAR 2009-10 IS DIRECTED AGAINST TH E ORDERS OF LD. COMMISSIONER OF INCOME TAX(APPEALS) (IN SHORT LD. CIT], UJJAIN DATED 22.01.2020 WHICH ARE ARISING OUT OF THE ORDER U/S 143(3) R.W.S. 147 OF THE ACT DATED 20.01.2017 FRAMED BY JC IT, RATLAM. SHRI LAL SINGH CHOUHAN ITANO.104/IND/2020 2 THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL : [1] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD CIT (A) ERRED IN CONFIRMING THE LEVY OF PENA LTY UNDER SECTION 271E OF THE INCOME-TAX ACT, 1961 EVEN WHEN THE PENA LTY ORDER AS PASSED UNDER SECTION 271E OF THE INCOME-TAX ACT, 19 61 WAS WITHOUT JURISDICTION AND BARRED BY LIMITATION OF TIME. [2] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD CIT (A) ERRED IN CONFIRMING THE LEVY OF PENA LTY UNDER SECTION 271E OF THE INCOME-TAX ACT, 1961 EVEN WHEN NO PROPE R SATISFACTION WAS RECORDED BY THE ASSESSING OFFICER. [3] THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE AND IN LAW, THE LD CIT (A) ERRED IN CONFIRMING THE LEVY OF PENA LTY UNDER SECTION 271E OF THE INCOME-TAX ACT, 1961 OF RS.4,00,000/- W ITHOUT PROPERLY APPRECIATING THE FACTS OF THE CASE AND SUBMISSION M ADE BEFORE HIM MORE SO WHEN NO SUCH AMOUNT OF LOAN WAS FOUND CREDI TED IN THE BOOKS OF ACCOUNTS OF THE APPELLANT WHICH WAS REPAID IN CA SH. 2. BRIEF FACTS AS CULLED OUT FROM THE RECORDS ARE T HAT A SEARCH WAS CONDUCTED IN THE CASE OF PERSON NAMELY SHRI RAMESH CHAND UPADHYA AND CERTAIN DOCUMENTS WERE IMPOUNDED WHICH ALSO INCLUDED SOME DOCUMENTS ALLEGEDLY SHOWING TRANSACTI ONS OF CASH LOAN GIVEN AND TAKEN WITH THE ASSESSEE. ASSESSMENT OF MR. RAMESH CHAND UPADHYA WAS COMPLETED U/S 143(3) R.W.S. 147 O F THE ACT FOR A.YS. 2008-09 & 2009-10. THIS INFORMATION OF CASH L OAN TRANSACTIONS WERE FORWARDED TO THE LD. AO OF THE AS SESSEE SHOWING SHRI LAL SINGH CHOUHAN ITANO.104/IND/2020 3 THAT THERE AS REPAYMENT OF LOAN RS.5,50,000/- IN CA SH WHICH WAS IN CONTRAVENTION TO THE PROVISION OF SECTION 269T OF T HE ACT. PENALTY PROPOSAL WAS RECEIVED BY LD. AO, JHABUA. ACCORDINGL Y, NOTICE ISSUED FOR LEVY OF PENALTY U/S 271E OF THE ACT. STATEMENT OF THE ASSESSEE WAS TAKEN WHEREIN HE CATEGORICALLY DENIED TO HAVE T AKEN ANY CASH LOAN FROM MR. RAMESH CHAND UPADHYA. DURING THE PENA LTY PROCEEDINGS AGAIN IT WAS SUBMITTED THAT NO LOAN TRA NSACTION HAVE BEEN TAKEN OR REPAID BY THE ASSESSEE DURING A.YS. 2 007-08 & 2009- 10 WITH MR. RAMESH CHAND UPADHYA. LD. AO WAS NOT CO NVINCED. THOUGH THE INFORMATION WAS RECEIVED FOR REPAYMENT O F CASH LOAN AT RS.5,50,000/- BUT LD. AO LEVIED THE PENALTY U/S 271 E OF THE ACT AT RS.4,00,000/- 3. AGGRIEVED ASSESSEE PREFERRED AN APPEAL BEFORE TH E LD. CIT(A) BUT COULD NOT GET RELIEF. IT WAS CONTENDED BEFORE THE L D. CIT(A) THAT IN VIEW OF THE SETTLED JUDICIAL PRECEDENCE NO PENALTY WAS LEVIABLE AS NO ASSESSMENT PROCEEDINGS WERE PENDING IN THE CASE OF ASSESSEE AND SO THERE WAS NO SATISFACTION RECORDED BY THE LD. AO TO INITIATE PENALTY. IT WAS ALSO SUBMITTED THAT PENALTY LEVIED FOR A.YS. 2007-08 & 2009-10 U/S 271D OF THE ACT AND FOR A.Y.2008-09 U /S 271E WERE SHRI LAL SINGH CHOUHAN ITANO.104/IND/2020 4 OF THE ACT DELETED BY LD. CIT(A) ACCEPTING THE ASSE SSEES CONTENTION THAT NO CASH LOAN WAS TAKEN/REPAID. HOWEVER, IN THE INSTANT CASE LD. CIT(A) WAS NOT CONVINCED AND HE CONFIRMED THE P ENALTY LEVIED U/S 271E OF THE ACT OBSERVING AS FOLLOWS: 5. I HAVE GONE THROUGH THE FACTS OF THE CASE LEADI NG TO LEVYING OF PENALTY. IN THE WRITTEN ARGUMENT IT HAS BEEN RE-ITERATED THAT T HERE WAS NO LOAN TRANSACTION AND THEREFORE THE QUESTION OF LEVY OF P ENALTY DOES NOT ARISE. THE APPELLANT ALSO REFERRED TO THE ORDER PASSED BY MY P REDECESSOR DATED 22.08.2019 WHERE PENALTY LEVIED U/S 271D HAS BEEN D ELETED. 6. I HAVE PERUSED THE ORDER OF MY PREDECESSOR REFER RED SUPRA AND I AM NOT IN AGREEMENT WITH THE FINDING GIVEN THEREIN. IT IS SEE N THAT MY PREDECESSOR DELETED THE PENALTY BY NOTING THAT THE AO FAILED TO BRING ANY MATERIAL IN SUPPORT OF THE LOAN TRANSACTION. THIS FINDING OF MY PREDECESSOR IS AGAINST THE FACTS. IT IS SEEN FROM THE PENALTY ORDER PASSED BY JCIT RATLAM RANGE THAT THE BASIS OF LEVY OD PENALTY IS NOTING ON THE SEIZED DO CUMENTS, WHICH WAS SEIZED FROM RAMESH CHANDRA UPADHYA. THE NOTICE CONTAINS DA TE WISE REPAYMENT OF LOAN. THEREFORE THERE WAS BASIS FOR LEVY OF PENALTY U/S 271E. 7. IN THE LIGHT OF AFORESAID FACTS I AM OF THE CONS IDERED OPINION THAT THERE WAS ADEQUATE BASIS FOR LEVY OF PENALTY IN THE FORM OF N OTING ON THE SEIZED DOCUMENTS AND THEREFORE PENALTY LEVIED U/S 271E AT RS.4,00,000/- IS CONFIRMED. 4. NOW THE ASSESSEE IS IN APPEAL BEFORE THIS TRIBUN AL. LD. COUNSEL FOR THE ASSESSEE VEHEMENTLY ARGUED REFERRING TO THE DETAILED WRITTEN SYNOPSIS AS WELL AS PAPER BOOK FILED ON 15.06.2012 RUNNING FROM 1 TO 70 PAGES. TWO FOLD CONTENTIONS WERE MADE; FIRSTL Y, THAT THERE IS SHRI LAL SINGH CHOUHAN ITANO.104/IND/2020 5 NO EVIDENCE SUGGESTING THAT ASSESSEE HAS TAKEN ANY LOAN FROM MR. RAMESH CHAND UPADHYA SO THERE REMAINS NO POSSIBILIT Y OF REPAYMENT OF ALLEGED CASH LOAN, NO CROSS EXAMINATIO N WAS DONE BETWEEN THE ASSESSEE AND MR. RAMESH CHAND UPADHYA A ND REVENUE AUTHORITIES IN ASSESSEES OWN CASE DELETED THE PENALTY LEVIED U/S 271D OF THE ACT WHICH CLEARLY PROVES THA T NO CASH LOAN WAS TAKEN. SECONDLY, IT WAS CONTENDED THAT ON LEGAL ITY ALSO THE ASSESSEE DESERVES TO SUCCEED AS THERE WAS NO PENDIN G ASSESSMENT IN THE CASE OF ASSESSEE AND IN VIEW OF THE DECISION OF COORDINATE BENCH CHANDIGARH IN THE CASE OF BALDEV SINGH VS. ACIT (2018) 93 TAXMAN.COM 212 IMPUGNED PENALTY DESERVES TO BE DELETED. RELIANCE WAS ALSO PLACED ON THE FOLLOWING DECISION MENTIONED IN THE SYNOPSIS:- I. CIT VS MANOHAR LAL THAKRAL AS REPORTED IN [2018] 93 TAXMANN.COM 156 (PUNJAB & HARYANA) II. CIT VS JAI LAXMI RICE MILLS AMBALA CITY AS REPO RTED IN [2015] 64 TAXMANN.COM 75 (SC) III.ACIT VS M/S NARSI IRON & STEEL PVT. LTD. [APPEA L NO: I.T.A. NO. 2866/DEL/2013](DELHI TRIB.) IV. PRITHVI SINGH POONIA VS JCIT [APPEAL NO: ITA NO . 3108/AHD/2015] (AHMEDABAD TRIB.) V. DCIT VS M/S KARAN EMPIRE PVT. LTD. [APPEAL NO: I TA NO. 409/CHD/2011] (CHANDIGARH - TRIB.) SHRI LAL SINGH CHOUHAN ITANO.104/IND/2020 6 VI. SMT. S.B. PATIL VS JCIT [APPEAL NO: ITA NO. 105 3 & 1054 (BNG.)/2014 (BANGALORE TRIB.) 5. PER CONTRA LD. DEPARTMENTAL REPRESENTATIVE (DR) VEHEMENTLY ARGUED SUPPORTING THE ORDERS OF BOTH LOWER AUTHORIT IES BUT COULD NOT CONTROVERT THIS FACT THAT THERE IS NO EVIDENCE ON RECORD COULD SHOW THAT ASSESSMENT PROCEEDINGS FOR A.Y. 2009-10 W ERE CARRIED OUT IN THE CASE OF ASSESSEE. 6. WE HAVE HEARD RIVAL CONTENTIONS AND PERUSED THE RECORDS PLACED BEFORE US. SOLE ISSUE RAISED IN THIS APPEAL BY THE ASSESSEE IS CHALLENGING THE FINDING OF LD. CIT(A) CONFIRMING TH E LEVY OF PENALTY U/S 271E OF THE ACT AT RS.4,00,000/- FOR THE ALLEGE D CONTRAVENTION OF THE PROVISION OF SECTION 269T OF THE ACT FOR REPAYM ENT OF LOAN IN CASH EXCEEDING THE PERMISSIBLE LIMIT. 7. WE NOTE THAT PURSUANT TO SEARCH IN THE CASE OF A NOTHER PERSON NAMELY SHRI RAMESH CHAND UPADHYA CERTAIN DOCUMENTS WERE IMPOUNDED. ASSESSMENT PROCEEDINGS U/S 143(3) R.W.S. 147 OF THE ACT WAS COMPLETED IN THE CASE OF RAMESH CHAND UPADHYA. INFORMATION WAS PASSED ON IN THE FORM OF PENALTY PROPOSAL TO IT O, JHABUA ON 09.06.2016 FOR LEVYING PENALTY U/S 271E OF THE ACT ON THE CASH LOAN SHRI LAL SINGH CHOUHAN ITANO.104/IND/2020 7 REPAYMENT OF RS.5,50,000/- BY CASH. THOUGH IT WAS C ONTENDED THAT NEITHER ANY LOAN WAS TAKEN NOR ANY CASH LOAN WAS RE PAID IN CONTRAVENTION OF PROVISION OF U/S 269T OF THE ACT, ASSESSEE FAILED TO FIND ANY FAVOUR FROM BOTH THE LOWER AUTHORITIES. 8. WE FURTHER NOTE THAT THE STATEMENT OF THE ASSESS EE WAS RECORDED ON OATH ON 01.02.2016 U/S 131(1) OF THE ACT WHEREIN REPEATEDLY ASSESSEE DENIED THE CHARGE OF HAVING TAKEN OR REPAI D ANY CASH LOAN FROM RAMESH CHAND UPADHYA. FURTHER PENALTY U/S 271D OF THE ACT WAS LEVIED ON THE ASSESSEE FOR A.YS. 2007-08 & 2009 -10 AND ALSO U/S 271E FOR A.Y. 2008-09 AND LD. CIT(A) DECIDED IN FAV OUR OF THE ASSESSEE DELETING ALL THESE PENALTIES ACCEPTING THE CONTENTIONS OF ASSESSEE THAT NO CASH LOAN WAS RECEIVED/REPAID FROM RAMESH CHAND UPADHYA. 9. WE FURTHER NOTE THAT THERE IS NO EVIDENCE ON REC ORD TO SUGGEST THAT ANY ASSESSMENT PROCEEDINGS WERE CARRIED OUT BY THE LD. AO IN THE CASE OF ASSESSEE. EVEN LD. DR WAS FAIR ENOUGH TO AC CEPT THIS FACT. IT IS A SETTLED JUDICIAL PRECEDENCE THAT FOR INITIATIN G PENALTY PROCEEDINGS LD. AO HAS TO FIRST RECORD A PROPER SATISFACTION IN THE ASSESSMENT ORDER BY ANALYZING THE FACTS. SO FOR LEVY OF PENALT Y U/S 271E OF THE SHRI LAL SINGH CHOUHAN ITANO.104/IND/2020 8 ACT IN THE CASE OF ASSESSEE LD. AO HAS TO CLEAR THE HURDLE BY RECORDING A SATISFACTION IN THE ASSESSMENT ORDER WH ICH IN THIS CASE IS ABSENT. 10. IN THE INSTANT CASE IT IS AN UNDISPUTED FACT TH AT THE ASSESSMENT PROCEEDINGS WERE NOT PENDING BEFORE LD. AO FOR A.Y. 2009-10 STILL THE PENALTY HAS BEEN LEVIED U/S 271E OF THE ACT. 11. COORDINATE BENCH CHANDIGARH IN THE CASE OF BALDEV SINGH VS. ACIT (SUPRA) HAS DEALT WITH VERY SAME ISSUE AND HAS DEC IDED IN FAVOUR OF THE ASSESSEE OBSERVING AS FOLLOWS: 15. CHAPTER-XXI OF THE INCOME TAX ACT DEALS WITH P ENALTY IMPOSABLE/LEVIABLE. PENALTY UNDER VARIOUS SECTIONS ARE IMPOSABLE BY THE REVENUE AUTHORITIES, WHERE THEY ARE SATISFIED T HAT PARTICULAR DEFAULT DEFINED UNDER THE RESPECTIVE SECTION/S HAS BEEN COMMITTED BY THE ASSESSEE. THE LANGUAGE OF SECTION IS CLEAR THAT THE PENALTY CAN BE IMPOSED ONLY IF THERE IS VIOLATION OF ONE OR MORE O F THE CIRCUMSTANCES MENTIONED IN THE SECTION. THE LEVY OF PENALTY FOR F AILURE TO PERFORM STATUTORY OBLIGATION PRESCRIBED UNDER THE ACT IS A MATTER OF DISCRETION OF THE AUTHORITIES TO BE EXERCISED JUDICIALLY AND O N CONSIDERATION OF RELEVANT CIRCUMSTANCES AND THE LAW LAID DOWN BY THE APEX COURT ON THE ISSUE OF LEVY OF PENALTY. IMPOSITION OF PENALTY IN THE GIVEN SET OF CIRCUMSTANCES IS NOT MANDATORY BUT DISCRETIONARY AN D IN ORDER TO EXERCISE ITS POWER ON LEVY OF PENALTY UNDER THE RES PECTIVE SECTION/S, PRIMARY CONDITIONS IS THAT THE PROCEEDINGS IN RESPE CT OF THE SAID ASSESSEE FOR THE CAPTIONED ASSESSMENT YEAR SHOULD B E PENDING BEFORE THE ASSESSING OFFICER TO COME TO THE CONCLUSION THA T THE GIVEN SET OF SHRI LAL SINGH CHOUHAN ITANO.104/IND/2020 9 FACTS AND CIRCUMSTANCES MERITS THE INITIATION OF PE NALTY PROCEEDINGS IN THE CASE. IN THE FACTS OF THE PRESENT CASE BEFORE U S, NO PROCEEDINGS WERE INITIATED FOR THE FINANCIAL YEAR 2004-05 I.E. ASSESSMENT YEAR 2005-06, WHICH IS THE YEAR TO WHICH THE AFORESAID T RANSACTION OF ACCEPTING AND PAYMENT OF THE CASH LOAN RELATES. THE SHOW-CAUSE NOTICE WAS ISSUED TO THE ASSESSEE BY THE ASSESSING OFFICER, HOWEVER, IN THE PROCEEDINGS RELATING TO ASSESSMENT YEAR 2007 -08 AND EVEN PENALTY PROCEEDINGS WERE INITIATED UNDER SECTIONS 2 71D AND 271E OF THE ACT WHILE COMPLETING ASSESSMENT ORDER RELATING TO ASSESSMENT YEAR 2007-08. WE FIND NO MERIT IN THE SAID INITIATI ON OF PENALTY PROCEEDINGS UNDER SECTIONS 271D AND 271E OF THE ACT RELATING TO ASSESSMENT YEAR 2005-06, WHILE COMPLETING ASSESSMEN T PROCEEDINGS RELATING TO ASSESSMENT YEAR 2007-08. 12. FURTHER HON'BLE SUPREME COURT IN THE CASE OF CIT VS. JAI LAXMI RICE MILLS AMBALA (SUPRA) HAS HELD THAT FOR INITIATING THE PROCESS OF LEVYING PENALTY U/S 271E OF THE ACT RECORDING OF SA TISFACTION IN THE ASSESSMENT ORDER BY THE LD. AO IS MANDATORY ELSE NO SUCH PENALTY COULD BE LEVIED. 13. WE, THEREFORE, IN THE GIVEN FACTS AND CIRCUMSTA NCES OF THE CASE AND RESPECTFULLY FOLLOWING THE DECISIONS REFERRED H EREINABOVE, ARE OF THE CONSIDERED VIEW THAT LD. AO ERRED IN LEVYING PE NALTY U/S 271E OF THE ACT IN THE CASE OF ASSESSEE AS FIRSTLY REVENUE FAILED TO PROVE WHETHER ASSESSEE ACTUALLY RECEIVED ANY CASH LOAN OR REPAID ANY CASH LOAN FROM R.C. UPADHYA AND SECONDLY LD. AO WAS NOT HAVING ANY SHRI LAL SINGH CHOUHAN ITANO.104/IND/2020 10 JURISDICTION TO LEVY THE PENALTY AS NO ASSESSMENT P ROCEEDINGS WERE PENDING IN THE CASE OF ASSESSEE AND THUS NO SATISFA CTION WAS RECORDED BY THE LD. AO TO INITIATE THE PENALTY. TH US, FINDING OF LD. CIT(A) IS SET ASIDE AND LD. AO IS DIRECTED TO DELET E THE PENALTY OF RS.4,40,000/- LEVIED U/S 271E OF THE ACT. GROUNDS R AISED BY THE ASSESSEE ARE ALLOWED. 14. IN RESULT, APPEAL FILED BY THE ASSESSEE IN ITA NO.104/IND/2020 IS ALLOWED. ORDER WAS PRONOUNCED AS PER RULE 34 OF THE I.T.A.T. RULES 1963 ON 27.07.2021. SD/- (MADHUMITA ROY) SD/- (MANISH BORAD) JUDICIAL MEMBER A CCOUNTANT MEMBER INDORE; DATED : 27/07/2021 PATEL/PS COPY TO: ASSESSEE/AO/PR. CIT/ CIT (A)/ITAT (DR)/GUA RD FILE. BY ORDER ASSISTANT REGISTRAR, INDORE