SUNIL H MASAND, MUMBAI V. JTCIT 21, MUMBAI

ITA 110/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 92841 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 06-05-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 06-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: S C AGRAWAL
• Keywords: Bonafide belief; Reasonable cause
• Section: 273B

Judgement Text

E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JM AND SHRI D. KARUNAKAR A RAO, AM ./ I.T.A. NO.110 & 111 /MUM/2011 ( / ASSESSMENT YEAR : 2006-07 SHRI SUNIL H. MASAND, 42, RAJNIGANDHA, GULMOHAR CROSS ROAD, NO. 11, J.V.P.D. SCHEME, MUMBAI -400 044. / VS. JT. COMMISSIONER OF INCOME TAX RANGE 21(2), MUMBAI. ./ PAN : AABPM 9185 F ( / APPELLANT ) .. ( / RESPONDENT ) A PPELLANT BY SHRI S.C. AGRAWAL RESPONDENT BY SHRI NEIL PHILIP (D.R) / DATE OF HEARING : 06-05-2015 / DATE OF PRONOUNCEMENT : 10-06-2015 [ !' / O R D E R PER VIJAY PAL RAO, J.M . : THESE TWO APPEALS BY THE ASSESSEE ARE DIRECTED AGAI NST THE ORDER DATED 26-11-2010 OF LD. CIT(A)- 32, MUMBAI PERTAINING TO A.Y. 2006-07 AND ARISING FROM THE PENALTY ORDER PASSED U/S 271D & 271E OF TH E INCOME TAX ACT, 1961. 2. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSE E HAS ACCEPTED CASH LOAN OF RS. 1,50,000/- FROM SON AND ALSO REPAID LOA N IN CASH OF RS. 2,80,240/- TO HIS MOTHER. ON QUERY FROM THE A.O., T HE ASSESSEE SUBMITTED THAT HE WAS NOT AWARE ABOUT THE PROVISIONS OF SECTI ON 269SS AND 269T OF THE ACT AND SINCE HE HAD ONLY A PART TIME ACCOUNTANT WA S NOT CONVERSANT WITH THE PROVISIONS, THE LOAN WAS ACCEPTED AND REPAID DU E TO IGNORANCE. THE A.O. HELD THAT THE REASONS GIVEN BY THE ASSESSEE ARE GEN ERAL IN NATURE AND DOES ITA 110 & 111/M/11 2 NOT BRING OUT A SPECIFIC AND REASONABLE CAUSE IN AC CEPTING AND REPAYMENT OF LOAN IN CASH. THUS, THE A.O. HELD THAT THE CASE OF THE ASSESSEE IS NOT COVERED UNDER THE EXEMPTIONS PROVIDED U/S 269SS AND 269T OF THE ACT. THE A.O. ACCORDINGLY LEVIED PENALTY IN RESPECT OF LOAN OF RS . 1,50,000/- U/S 271D AND RS. 2,80,240/- U/S 271E OF THE ACT. THE ASSESSEE CH ALLENGED THE ACTION OF THE A.O. BEFORE THE LD. CIT(A) AND REITERATED THE CONTE NTION AS RAISED BEFORE THE A.O. THE LD. CIT(A) DID NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AND ACCORDINGLY CONFIRMED THE LEVY OF PENALTY U/S 271D AND 271E OF THE ACT. 3. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE SUBM ITTED THAT THE ASSESSEE IS A LAYMAN AND WAS NOT AWARE ABOUT THE PROVISIONS OF SECTION 269SS AND 269T OF THE INCOME TAX ACT. THE TURNOVER OF THE ASS ESSEE DURING THE YEAR UNDER CONSIDERATION WAS LESS THAN RS. 40 LACS AND T HEREFORE THE ACCOUNTS OF THE ASESSEE WERE REQUIRED TO BE AUDITED. THE ASESSE E CAME TO KNOW ABOUT THE VIOLATION OF PROVISIONS OF SECTION 269SS AND 269T O F THE ACT ONLY WHEN THE TAX AUDITOR POINTED OUT TO HIM THE SAME. HE HAS FURTHER CONTENDED THAT THE TRANSACTION WAS WITHIN THE FAMILY AND DUE TO BUSINE SS EXIGENCIES THE ASSESSEE HAS ACCEPTED AND REPAID THE LOAN IN CASH. SINCE THE RE WAS A REASONABLE CAUSE AND THEREFORE THE CASE OF THE ASSESSEE COVERED UNDE R THE PROVISIONS OF SECTION 273B. IN SUPPORT OF HIS CONTENTION, HE HAS RELIED U PON THE FOLLOWING DECISIONS:- L. CIT VS. SUNIL KUMAR GOEL 315 ITR 163 ( P & H) 2. DR. B GPANDA VS. DCIT 2000 TAXMAN (II / TAXM AN 86) CAL. 3. ITO VS. SNIL M KASLIWAL 2003 (80 T T J) PUNE. 4. SKYLINE SILK MILLS VS. ACIT 101 TTJ 798 5. MOHAN KARKARE VS. CIT 52 ITD 236 6. SHIVANDAN KAUSHIK 74 ITJ 761 (CHANDIGARH) 7. TARLOCHAN SINGH 81 ITJ 1021 (AMRITSAR) 8. SHREE MAHAVIR INDUSTRIES 82 T T J (JODHPUR) ITA 110 & 111/M/11 3 9. BHAGWATI PRASAD BAJORIA HUF 263 ITR 487 ( GAUHAT I) 10. IN CIT VS. MANOJ LALWANI 260 ITR 590 (RAJ) ~ THUS, THE LD. COUNSEL HAS SUBMITTED THAT THE TRANSA CTIONS ARE WITHIN THE FAMILY AND DUE TO BUSINESS EXIGENCY, THE ASSESSEE H AS ESTABLISHED A REASONABLE CAUSE AS PER THE PROVISIONS OF SECTION 2 73B OF THE ACT. 4. ON THE OTHER HAND, THE LD. D.R. HAS SUBMITTED TH AT THE CASE OF THE ASSESSE DOES NOT FALL UNDER THE EXEMPTION AS PROVID ED U/S 269SS AND 269T OF THE ACT, THEREFORE, IT IS A CASE OF GROSS VIOLATION OF THE PROVISIONS AND CONSEQUENTLY THE PENALTY IS ATTRACTED. HE HAS RELI ED UPON THE ORDERS OF AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL PLACED ON RECORD. AS FAR AS THE VIOLATION OF THE PR OVISIONS OF SECTION 269SS AND 269T OF THE ACT, WE FIND THAT THE ASSESSEE HAS VIOLATED THE SAID PROVISIONS OF THE ACT AND THE CASE OF THE ASSESSEE DOES NOT FA LL UNDER THE EXEMPTIONS PROVIDED THERE UNDER. HOWEVER, THE ASSESSEE HAS CON TENDED THAT THE ACCEPTANCE OF CASH LOAN AND REPAYMENT OF CASH LOAN ARE WITHIN THE FAMILY MEMBERS IS DUE TO BUSINESS EXIGENCY AND FURTHER THE ASSESSEE WAS NOT AWARE ABOUT THE PROVISIONS OF SECTION 269SS AND 269T OF T HE ACT. THE ASSESSEE HAS PLEADED THAT HE WAS UNDER THE BONAFIDE BELIEF THAT SUCH ACT OF ACCEPTING AND REPAYMENT OF CASH LOAN WITH THE SON AND MOTHER OF T HE ASSESSEE DOES NOT VIOLATE ANY PROVISIONS OF THE ACT. THE ASSESSEE HAS PLEADED THAT THE EXPLANATION OF THE ASSESSEE FALLS UNDER THE PURVIEW OF REASONABLE CAUSE AS PER SECTION 273B AND, THEREFORE, EVEN IF THE ASSESSEE F AILED TO COMPLY WITH THE PROVISIONS OF THE ACT, IF THE ASSESSEE PROVED THAT THERE WAS A REASONABLE CAUSE FOR THE SAID FAILURE, NO PENALTY SHALL BE LEVIABLE. WE NOTE THAT THE CASE OF THE ASSESSEE HAS NOT BEEN EXAMINED BY THE AUTHORITIES B ELOW IN THE CONTEXT OF SECTION 273B AND ACCORDINGLY IN THE FACTS AND CIRCU MSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE, WE SET ASIDE THE MATTER TO THE RECORD OF THE A.O. FOR ITA 110 & 111/M/11 4 CONSIDERING THE EXPLANATION OF THE ASSESSEE IN THE CONTEXT OF SECTION 273 B OF THE ACT. 6. IN THE RESULT, APPEALS FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON 10 TH JUNE, 2015. !' # $% &! ' 10-06-2015 . ( ) SD/- SD/- (D. KARUNAKARA RAO) (VIJAY PAL RAO ) ACCOUNTANT MEMBER JUDICIAL MEMBER $ 4 MUMBAI ; &! DATED 10-06-2015 [ .5../ R.K R.KR.K R.K. , SR. PS ! '#$% &%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 6 () / THE CIT(A) 32, MUMBAI 4. 6 / CIT- -CITY -21 MUMBAI 5. 9:( 55;< , ;< , $ 4 / DR, ITAT, MUMBAI E BENCH 6. (>? @ / GUARD FILE. ' / BY ORDER, 9 5 //TRUE COPY// (/') * ( DY./ASSTT. REGISTRAR) , $ 4 / ITAT, MUMBAI