SMT. MEERA DEVI KUMAWAT, JAIPUR V. JCIT, RANGE-4, , JAIPUR

ITA 1201/JPR/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 3299 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 17-10-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAHUL SANGHI
• Keywords: Gift; Source of fund; Question of law; Reasonable cause; Tax effect; Ignorance of law; Set aside
• Section: 273B; 271D; 271E; 13; 27

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENC HES A JAIPUR JH LAANHI XKSLKBZ] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA- @ ITA NO. 1201/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR :2009-10 SMT. MEERA DEVI KUMAWAT, JMC-72, VIJAYBARI, PATH NO. 7, SIKAR ROAD, JAIPUR CUKE VS. JOINT COMMISSIONER OF INCOME TAX, RANGE-4, JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO. AGZPK1841L VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SH. RAHUL SANGHI (CA) JKTLO DH VKSJ LS @ REVENUE BY : SMT. MONISHA CHOUDHARY (JCIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 09/09/2021 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 21/10/2021 VKNS'K@ ORDER PER: VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-2, JAIPUR DATED 28.06.2019 PERTAINING TO A.Y 2009-10 WHEREIN THE ASSESSEE HAS CHALLENGED THE CONFIRMATION OF LEVY OF PENALTY U/S 271D OF THE ACT. 2. AT THE OUTSET, IT IS NOTED THAT THERE IS A DELAY IN FILING THE PRESENT APPEAL. AFTER HEARING BOTH THE PARTIES AND CONSIDE RING THE MATERIAL PLACED ON RECORD, THE DELAY SO HAPPENED IN FILING THE PRES ENT APPEAL IS HEREBY CONDONED AND THE APPEAL IS ADMITTED FOR ADJUDICATIO N. ITA NO. 1201/JP/2019 SMT. MEERA DEVI KUMAWAT, JAIPUR VS. JCIT, JAIPUR 2 3. DURING THE COURSE OF HEARING, THE LD. AR SUBMIT TED THAT THE APPELLANT IS AN ILLITERATE INDIVIDUAL HAVING INCOME FROM RENTING OF MARRIAGE GARDEN SITUATED AT VIJAY BARI, SIKAR ROAD, JAIPUR. THE CASE OF HER HUSBAND SH. BABU LAL KUMAWAT FOR THE AY 2009-10 HAD COME UP FOR INQUIRY BEFORE ITO (INV), JAIPUR. IN THE INQUIRY BEFORE ITO (INV), JAIPUR, IT HAS BEEN SUBMITTED BY SHRI BABU LAL KUMAWAT THAT HE HAS GIVE N LOAN OF RS. 9,00,000/- TO HIS WIFE. THEREAFTER, ITO (INV), JAIPUR REPORTED THE MATTER TO JCIT, RANGE 4, JAIPUR AND A NOTICE U/S 27 4 R.W.S. 271D OF INCOME TAX ACT, 1961 WAS SERVED ON THE ASSESSEE BY JCIT, RANGE 4, JAIPUR ON 15.03.2016. THE ASSESSEE WAS ASKED TO SHO W CAUSE AS TO WHY PENALTY U/S 271D SHOULD NOT BE LEVIED. IN RESPONSE TO THE SHOW- CAUSE NOTICE, THE ASSESSEE HAS SUBMITTED THAT SHE HAS REC EIVED RS. 6,00,000/- FROM HER HUSBAND BY WAY OF DEMAND DRAFT FOR PAYMENT TOWARDS PURCHASE OF PLOT NO. 356 AND REMAINING RS. 3,00,000/- WAS RE CEIVED IN CASH AS THE ASSESSEE IS WIFE OF SH. BABU LAL KUMAWAT AND CASH O F SH. BABU LAL KUMAWAT REMAINS IN CUSTODY OF THE ASSESSEE AND CANN OT BE TREATED AS LOAN. THE ASSESSEE HAS ALSO SUBMITTED THAT THE CASH OF HUSBAND AND WIFE CANNOT BE SEPARATED AS IT IS IN JOINT CUSTODY THERE FORE CANNOT BE TAKEN AS LOAN. THE ASSESSEE HAS ALSO SUBMITTED THAT IN THE C ASE OF HUSBAND AND WIFE, REPAYMENT IS NOT MANDATORY AND THERE IS NO IN TEREST BURDEN THEREFORE IT IS NOT JUSTIFIABLE TO IMPOSE PENALTY U /S 271D. IT WAS SUBMITTED THAT NOT APPRECIATING THE SUBMISSIONS MADE BY THE A SSESSEE, THE JCIT, RANGE 4, JAIPUR HAS RAISED A DEMAND OF RS. 3,00,0 00/- BY LEVYING PENALTY U/S 271D OF THE INCOME TAX ACT, 1961. 4. AGGRIEVED BY THE SAID ORDER, THE ASSESSEE HAS FI LED AN APPEAL BEFORE THE LD CIT(A), JAIPUR. THE ASSESSEE HAS SUBMITTED ALL THE FACTS BEFORE THE LD CIT(A) AND ALSO QUOTED CASE LAW OF SHRI SUNIL K UMAR SOOD V/S JCIT (ITAT DELHI) BUT THE LD CIT (A) HAS NOT CONSIDERED THE FACTS AND QUOTED ITA NO. 1201/JP/2019 SMT. MEERA DEVI KUMAWAT, JAIPUR VS. JCIT, JAIPUR 3 CASE LAW OF THE ASSESSEE AND REJECTED THE APPEAL OF THE ASSESSEE. AGAINST THE SAID ORDER AND FINDINGS OF THE LD CIT(A ), THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 5. IT WAS SUBMITTED BY THE LD A/R THAT PROVISION O F SEC 269SS DO NOT BAR GENUINE CASH TRANSACTIONS OF LOAN, BUT ONLY BAR THO SE TRANSACTIONS WHICH ARE ENTERED WITH THE INTENTION OF EVADE TAXES. THES E PROVISIONS ARE MADE TO COUNTERACT EVASION OF TAX BUT NOT TO BAR CASH TR ANSACTIONS BETWEEN CLOSE RELATIONS. IT WAS SUBMITTED THAT THE INSTANT CASE IS NOT THE CASE WHERE UNACCOUNTED CASH WAS FOUND IN THE COURSE OF S EARCH AND SEIZURE OPERATIONS. THE ASSESSEE WAS HELPED BY HER HUSBAND FOR ACQUIRING PROPERTY WHICH ONE WAS FOR THE RESIDENCE OF FAMILY MEMBERS. IN OUR CASE THE ASSESSEE HAS NOT EVADED ANY TAX BUT ONLY PURCHA SE A PROPERTY WITH THE HELP OF HER HUSBAND FOR RESIDENCE OF HER FAMILY MEMBERS. 6. IT WAS SUBMITTED THAT SECTION 269SS IS APPLICABL E TO THE DEPOSIT OR LOAN. THERE IS A RELATIONSHIP OF DEBTOR AND CREDITO R BETWEEN THE PARTY GIVING MONEY AND THE PARTY RECEIVING MONEY IN EVERY DEPOSIT OR LOAN. IN CASE OF DEPOSIT, THE DELIVERY OF MONEY IS USUALLY A T THE INSTANCE OF THE GIVER AND IT IS FOR THE BENEFIT OF THE PERSON WHO D EPOSITS THE MONEY AND THE BENEFIT NORMALLY BEING THE EARNING OF INTEREST FROM PARTY WHO CUSTOMARILY ACCEPT DEPOSIT. IN CASE OF LOAN IT IS T HE BORROWER AT WHOSE INSTANCE AND FOR WHOSE NEEDS THE MONEY IS ADVANCED. THE BORROWING IS PRIMARILY FOR THE BENEFIT OF A BORROWER ALTHOUGH TH E PERSON WHO LENDS THE MONEY MAY ALSO STAND TO GAIN THEREBY EARNING INTERE ST ON THE MONEY LENT. IN OUR CASE THERE IS NO RELATIONSHIP OF DEBTOR AND CREDITOR BETWEEN HUSBAND AND WIFE AND THERE IS ALSO NO INTEREST PART IN THE AMOUNT. THE ASSESSEE HAS ONLY USED THE MONEY RECEIVED FROM HER HUSBAND IN PURCHASE OF PROPERTY USED FOR RESIDENCE PURPOSE OF ALL OF HE R FAMILY MEMBERS. THERE ITA NO. 1201/JP/2019 SMT. MEERA DEVI KUMAWAT, JAIPUR VS. JCIT, JAIPUR 4 IS NO BENEFICIAL INTEREST OF ONLY ONE PERSON. IT W AS PROSPERITY OF FAMILY AND TRANSACTION DID NOT INVOLVE ANY INTEREST ELEMEN T, AND THERE WAS NO PROMISE TO RETURN AMOUNT WITH OR WITHOUT INTEREST. HENCE, THE PROVISIONS OF SECTION 269SS WOULD NOT APPLY AND IT CAN SAFELY BE HELD THAT THERE WAS A REASONABLE CAUSE WITHIN THE MEANING OF SECTION 27 3B OF THE INCOME TAX ACT, 1961. ACCORDINGLY, NO PENALTY SHOULD BE LEVIED FOR VIOLATION OF THE PROVISIONS OF SECTION 269SS OF THE ACT. IT WAS FURT HER SUBMITTED THAT THE TRANSACTION IN QUESTION WAS A GENUINE TRANSACTION A ND THERE WAS NO SCOPE FOR SUSPICION. IT WAS ALSO SUBMITTED THAT THE ASSES SEE HAS ENTERTAINED A BONA FIDE BELIEF THAT SHE HAD RECEIVED CONTRIBUTION FROM HER FAMILY MEMBER AND, THEREFORE, THERE WAS NO VIOLATION OF TH E PROVISIONS OF SECTION 269SS OF THE ACT. 7. IT WAS SUBMITTED THAT THE HONBLE RAJASTHAN HIGH COURT IN THE CASE OF CIT VS RAJ KUMAR SHARMA (2007) 294 ITR 131 (RAJ) HAS HELD AS UNDER: 7. SECTION 271D OF THE INCOME-TAX ACT PROVIDES FOR PENALTY FOR FAILURE TO COMPLY WITH THE PROVISIONS OF SECTION 26 9SS OF THE INCOME-TAX ACT. ACCORDING TO THIS PROVISION, IF A P ERSON, INTER ALIA, ACCEPTS ANY LOAN IN CONTRAVENTION OF THE PROVISIONS OF SECTION 269SS OF THE INCOME-TAX ACT, HE SHALL BE LIABLE TO PAY, BY WAY OF PENALTY, A SUM EQUAL TO THE AMOUNT OF LOAN OR DEPOS IT SO TAKEN OR ACCEPTED. SECTION 273B IS AN OVERRIDING PROVISION. ACCORDING TO THE SAID PROVISION, NO PENALTY SHALL BE IMPOSABLE ON A PERSON OR ASSESSEE FOR ANY FAILURE, INTER ALIA, REFERRED TO S ECTION 271D IF HE PROVES THAT THERE WAS REASONABLE CAUSE FOR THE SAID FAILURE. 8. THE TRIBUNAL IN ITS ORDER HAS FOUND THAT THE GEN UINENESS OF THE DEPOSITS MADE BY THE ASSESSEE'S BROTHER PANKAJ SHAR MA WAS NOT IN ITA NO. 1201/JP/2019 SMT. MEERA DEVI KUMAWAT, JAIPUR VS. JCIT, JAIPUR 5 DOUBT BY THE ASSESSING OFFICER. THE TRIBUNAL NOTICE D THE EXPLANATION GIVEN BY THE ASSESSEE THAT THE DEPOSITS WERE OBTAIN ED BY HIM TO SATISFY THE IMMEDIATE BUSINESS REQUIREMENT BUT FOUN D THAT THIS HAS NOT BEEN ESTABLISHED. HOWEVER, THE TRIBUNAL WAS THU S OF THE VIEW THAT THERE WAS A REASONABLE CAUSE TO ACCEPT THE DEP OSIT OTHERWISE THROUGH BANK DRAFT OR THROUGH CHEQUE BECAUSE THE AS SESSEE BONA FIDE BELIEVED THAT THE CASH TRANSACTIONS BELOW RS. 20,000 WAS PERMISSIBLE. 9. IT IS TRUE THAT THE IGNORANCE OF LAW IS NO EXCUS E, BUT THE QUESTION HERE IS WHETHER THE ASSESSEE WAS ABLE TO ESTABLISH REASONABLE CAUSE UNDER SECTION 273B JUSTIFYING THAT NO PENALTY SHOUL D BE IMPOSED IN CONTRAVENTION OF SECTION 271D OF THE INCOME-TAX ACT . NONE OF THE TRANSACTIONS EXCEEDS, AS NOTICED ABOVE, RS. 20,000. THE TRIBUNAL ACCEPTED THAT THE ASSESSEE BONA FIDE BELIEVED THAT THE CASH TRANSACTIONS BELOW RS. 20,000/- WAS PERMISSIBLE AN D THE CAUSE SHOWN BY THE ASSESSEE CONSTITUTED REASONABLE CAUSE. THE FINDING OF THE TRIBUNAL CANNOT BE SAID TO BE GROSSLY PERVERSE OR UNSUSTAINABLE IN LAW. IN OUR CONSIDERED VIEW, THE APPEAL DOES NOT GIVE RISE TO ANY SUBSTANTIAL QUESTION OF LAW. IT IS DISMISSED IN LIM INE 8. IT WAS SUBMITTED THAT THE HON'BLE PUNJAB AND HAR YANA HIGH COURT IN THE CASE OF CIT V. SUNIL KUMAR GOEL [2009] 315 ITR 163 HAS HELD AS UNDER: 'A FAMILY TRANSACTION, BETWEEN TWO INDEPENDENT ASSE SSEES, BASED ON AN ACT OF CASUALNESS, ESPECIALLY IN A CASE WHERE THE DISCLOSURE THEREOF WAS CONTAINED IN THE COMPILATION OF ACCOUNT S, AND WHICH HAD NO TAX EFFECT, ESTABLISHED 'REASONABLE CAUSE' U NDER SECTION ITA NO. 1201/JP/2019 SMT. MEERA DEVI KUMAWAT, JAIPUR VS. JCIT, JAIPUR 6 273B OF THE ACT. SINCE THE ASSESSEE HAD SATISFACTOR ILY ESTABLISHED 'REASONABLE CAUSE' UNDER SECTION 273B OF THE ACT, H E MUST BE DEEMED TO HAVE ESTABLISHED SUFFICIENT CAUSE FOR NOT INVOKING THE PENAL PROVISIONS OF SECTIONS 271D AND 271E OF THE A CT AGAINST HIM. THE DELETION OF PENALTY BY THE TRIBUNAL WAS VALID.' 9. IT WAS SUBMITTED THAT ITAT JAIPUR BENCHES IN THE CASE OF M/S PARAS BUILDHOME P. LTD (ITA NO. 803/JP/2016) HAS HELD AS UNDER: THEREFORE, CONSIDERING THE VARIOUS CASE LAWS ON TH IS ISSUE, NO PENALTY SHOULD BE IMPOSED ON THE ASSESSEE FOR CONTR AVENTION OF SECTION 271D OF THE ACT. THE ABOVE VIEW ALSO GET S UPPORTS FROM THE VARIOUS CASE LAWS RELIED BY THE LD AR OF THE ASSESS EE INCLUDING DECISION OF HON'BLE RAJASTHAN HIGH COURT IN THE CAS E OF CIT VS. RAJ KUMAR SHARMA (2007) 294 ITR 131 (RAJ) AND DECISION OF ITAT, JAIPUR BENCH IN THE CASE OF SMT. KUSUM DHAMANI VS A DDL. CIT IN ITA NO. 847/JP/2011. THEREFORE, BY CONSIDERING THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, I DELETE THE PENALTY SUSTAINED BY THE LD. CIT(A).' 10. IT WAS SUBMITTED THAT ITAT JAIPUR BENCHES IN TH E CASE OF SMT KUSUM DHAMANI (ITA NO. 847/JP/2011) HAS HELD THAT: WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED TH E RELEVANT MATERIAL AVAILABLE ON RECORD. FROM THE RECORD THERE IS NO SHRED OF DOUBT ABOUT THE GENUINENESS OF THE TRANSACTIONS AND THEIR DISCLOSURE IN THE BOOKS OF ACCOUNT AND RETURNS OF BOTH THE ASS ESSEE WHO HAPPEN TO BE HUSBAND AND WIFE, CARRYING ON THE BUSINESS AS SISTER CONCERNS. SECTION 271D READ WITH SECTION 269SS WAS INTRODUCED BY THE ITA NO. 1201/JP/2019 SMT. MEERA DEVI KUMAWAT, JAIPUR VS. JCIT, JAIPUR 7 LEGISLATURE TO DISCOURAGE THE MENACE OF BLACK MONEY . SINCE THESE TRANSACTIONS ARE GENUINE, THIS ELEMENT OF BLACK MON EY IS TOTALLY RULED OUT. THE ASSESSEE HAS GIVEN AN EXPLANATION IN OUR V IEW IS NOT UNREASONABLE AND IS BASED ON BUSINESS EXIGENCIES AL SO FOR PAYMENTS TO LABORERS AND LENDERS. UNDER THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE TRANSACTIONS BEING GENUINE AND THE AS SESSEE HAVING OFFERED REASONABLE EXPLANATION JUSTIFYING THESE CAS H TRANSACTIONS, THE IMPUGNED PENALTY U/S 271D IS NOT LEVIABLE. OUR VIEW IS FORTIFIED BY THE JUDGEMENT OF HONBLE JURISDICTIONAL HIGH COURT IN TH E CASE OF CIT VS. RAJ KUMAR SHARMA (SUPRA) AND THE JUDGEMENT OF HONBL E PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. SAINI MED ICAL STORE (SUPRA) WHICH IS FOLLOWED BY HONBLE P & H HIGH COURT IN THE CASE OF CIT VS. SUNIL KUMAR GOEL (SUPRA). THUS IN VIEW 10 OF THE FA CTS AND CIRCUMSTANCES OF THE CASE AND THE DECISIONS RELIED ON ABOVE, THE PENALTY IS DELETED. 11. IT WAS SUBMITTED THAT ITAT DELHI BENCHES IN TH E CASE OF SHRI SUNIL KUMAR SOOD VS JCIT (ITA NO. 1831/DEL/2016) THAT SECTION 269SS NOT APPLIES TO LOAN TRANSACTION BETWEEN HUSBAND AND WIF E. FURTHER, ITAT KOLKATA BENCHES IN THE CASE OF TUHINARA BEGUM HOOGL Y VS JCIT RANGE 2, HOOGLY (ITA NO. 2256/KOL/2014) HAS HELD AS UNDER: THIS WAS NEITHER A LOAN NOR A DEPOSIT. AT THE SAME TIME, THE WORDS 'ANY OTHER PERSON' ARE OBVIOUSLY A REFERENCE TO THE DEPOSITOR AS PER THE INTENTION OF THE LEGISLATURE. THE COMMUNICATION /TRANSACTION BETWEEN THE HUSBAND AND WIFE ARE PROTECTED FROM THE LEGISLATION AS LONG AS THEY ARE NOT FOR COMMERCIAL USE. OTHERWISE, THERE WOULD BE A POWERFUL TENDENCY TO DISTURB THE PEACE OF FAMILIES TO PROMOTE ITA NO. 1201/JP/2019 SMT. MEERA DEVI KUMAWAT, JAIPUR VS. JCIT, JAIPUR 8 DOMESTIC BROILS, AND TO WEAKEN OR TO DESTROY THE FE ELING OF MUTUAL CONFIDENCE WHICH IS THE MOST ENDURING SOLACE OF MAR RIED LIFE. IN THE INSTANT CASE, THE WIFE GAVE MONEY TO HUSBAND FOR CONSTRUCTION OF A HOUSE WHICH WAS NATURALLY A JOINT VENTURE FOR THE PROPERTY OF THE FAMILY ONLY. THIS TRANSACTION WAS NOT FOR COMMERCIA L USE. THE AMOUNT DIRECTLY RECEIVED BY THE HUSBAND. I.E THE ASSESSEE WAS TO THE EXTENT OF RS. 17.000 ONLY AND THE BALANCE AMOUNT OF RS. 26 .000 WAS GIVEN BY PAYMENT DIRECTLY TO THE SUPPLIER OF THE MATERIAL REQUIRED FOR THE CONSTRUCTION OF THE HOUSE. THOUGH THE EXPENDITURE W AS APPARENTLY INCURRED BY THE HUSBAND BEING THE KARTA/HEAD OF THE FAMILY, IT COULD NOT BE SAID THAT THE WIFE COULD NOT HAVE ANY INTERE ST OF HER OWN IN THIS HOUSE BEING CONSTRUCTED. THE TRANSACTION WAS N EITHER LOAN NOR ANY GIFT AS NO 'INTEREST' ELEMENT WAS INVOLVED AND THERE WAS NO PROMISE TO RETURN THE AMOUNT WITH OR WITHOUT INTERE ST. IT WAS CLEAR THAT THE MONEY GIVEN BY THE WIFE WAS A JOINT VENTUR E OF THE FAMILY. TAKING INTO CONSIDERATION OVERALL FACTS AND CIRCUMS TANCES OF THE CASE, IT COULD BE SAID THAT THE AFORESAID PIECE OF LEGISL ATION WAS NOT APPLICABLE IN THE INSTANT CASE. BY TAKING THE LIBER AL VIEW AND APPLYING THE GOLDEN RULE OF INTERPRETATION, THE ASSESSEE HAD A REASONABLE CAUSE WITHIN THE MEANING OF SECTION 273B. THEREFORE , THE PENALTY SHOULD BE DELETED. 12. IT WAS FURTHER SUBMITTED THAT ITAT DELHI BENCHE S IN THE CASE OF SHRI NABIL JAVED VS ITO WARD 63(3) (ITA NO. 3797 & 3798/DEL/2018) HELD AS UNDER: SINCE IN THE PRESENT CASE ALSO THE ASSESSEE HAD TA KEN THE LOAN FROM HIS WIFE FOR THE PURCHASE OF HOUSE WHICH IS FOR THE BENEFIT OF THE WHOLE FAMILY, THEREFORE, FOLLOWING THE DECISION CIT ED [SUPRA], WE HOLD THAT PENALTY LEVIED U/S 271D OF THE ACT IN THE INST ANT CASE IS NOT ITA NO. 1201/JP/2019 SMT. MEERA DEVI KUMAWAT, JAIPUR VS. JCIT, JAIPUR 9 JUSTIFIED. WE, THEREFORE, SET ASIDE THE ORDER OF TH E LD. CIT(A) AND 14 DIRECT THE ASSESSING OFFICER TO CANCEL THE PENALTY SO LEVIED. GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 13. IT WAS SUBMITTED THAT ITAT AMRITSAR BENCHES IN THE CASE OF ITO V. TARLOCHAN SINGH [2003] 128 TAXMAN 20 (MAG) HELD AS UNDER: 'EVEN KEEPING IN VIEW THE CONTENTS OF THE DEPARTMEN TAL CIRCULAR NO. 387 [1985] 152 ITR (ST.) 1), IT WAS NEVER THE INTEN TION OF THE LEGISLATURE TO PUNISH A PARTY INVOLVED IN A GENUINE TRANSACTION. THEREFORE, BY TAKING A LIBERAL VIEW IN THE INSTANT CASE, THE ASSESSEE HAD A REASONABLE CAUSE WITHIN THE MEANING OF SECTIO N 273D. THUS, KEEPING IN VIEW THE ENTIRE FACTS OF THE INSTANT CAS E, AND ALSO KEEPING IN VIEW THE INTENTION OF THE LEGISLATURE IN ENACTING THE PROVISIONS OF SECTION 269SS, IT WAS TO BE HELD THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM RECEIVING THE MO NEY BY AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT. I N THE INSTANT CASE, THE ASSESSEE WAS OF THE OPINION THAT THE AMOU NT IN QUESTION DID NOT REQUIRE TO BE RECEIVED BY AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE DRAFT. THUS, THERE WAS A REASONABLE C AUSE AND NO PENALTY SHOULD HAVE BEEN LEVIED. FROM THE ABOVE, IT WOULD BE CLEAR THAT THE ASSESSEE HAD TAKEN PLEA THAT FIRSTLY THERE WAS NO VIOLATION OF THE PROVISIONS OF SECTION 269SS. SECONDLY, THERE WAS A REASONABLE CAUSE. THIRDLY, THE ASSESSEE WAS UNDER T HE BONA FIDE BELIEF THAT HE WAS NOT REQUIRED TO RECEIVE THE AMOU NT OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE DR AFT. AS AN ALTERNATIVE SUBMISSION, IT WAS CONTENDED THAT THE D EFAULT COULD BE CONSIDERED EITHER TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF LAW AND, THEREFORE, NO PENALTY UNDER SECTION 271D WAS L EVIABLE. IN VIEW OF THE ABOVE DISCUSSION, NO PENALTY UNDER SECTION 2 71D WAS ITA NO. 1201/JP/2019 SMT. MEERA DEVI KUMAWAT, JAIPUR VS. JCIT, JAIPUR 10 LEVIABLE. IT IS WELL-SETTLED THAT PENALTY PROVISION SHOULD BE INTERPRETED AS IT STANDS AND, IN CASE OF DOUBT, IN A MANNER FAVOURABLE TO THE TAXPAYER. IF THE COURT FINDS THAT THE LANGUAGE IS AMBIGUOUS OR CAPABLE OF MORE MEANING THAT THE ONE, THEN THE COURT HAS TO ADOPT THE PROVISION WHICH FAVOURS THE ASSESS EE, MORE PARTICULARLY WHERE THE PROVISIONS RELATE TO THE IMP OSITION OF PENALTY. IN VIEW OF THE ABOVE, THE PENALTY SUSTAINED BY THE COMMISSIONER (APPEALS) WAS CANCELLED.' 14. IT WAS SUBMITTED THAT IN LIGHT OF THE ABOVE DEC ISIONS OF HONBLE HIGH COURTS AND ITAT, IT IS CLEAR THAT SECTION 269SS DO NOT APPLY IN THE CASE OF TRANSACTION BETWEEN CLOSE RELATIONS. IN OUR CASE AL SO, AMOUNT IN QUESTION IS NOT A LOAN BUT A FINANCIAL HELP AS APPELLANT IS NOT REQUIRED TO PAY BACK THE AMOUNT. THE ASSESSEE HAS TAKEN THE SAID AMOUNT OF CASH TO PURCHASE THE PROPERTY WHICH IS USED FOR RESIDENCE OF FAMILY MEMBERS AND DOES NOT TAKE ANY LOAN FROM HUSBAND. SINCE THE AMOUNT HAS BE EN USED NOT FOR THE PURPOSE OF BUSINESS AND ONLY USED SUCH AMOUNT FOR T HE BENEFIT OF FAMILY MEMBERS, HENCE THE SAME DOES NOT COME IN THE AMBIT OF SEC 269SS OF THE INCOME TAX ACT. IT WAS ACCORDINGLY REQUESTED TO DELETE THE PENALTY AS THE TRANSACTION WAS NOT DONE FOR EVASION OF TAX. 15. PER CONTRA, THE LD. D/R SUBMITTED THAT THE CONT ENTION RAISED BY THE LEARNED COUNSEL THAT SECTION 269SS IS NOT APPLICABL E WHERE THE LOANS AND DEPOSIT TRANSACTIONS ARE BETWEEN HUSBAND AND WIFE C ANNOT BE ACCEPTED. A PERUSAL OF SECTION 269SS REVEALS THAT IT BARS ANY PERSON FROM TAKING OR ACCEPTING LOAN FROM ANY OTHER PERSON OTHERWISE TH AN BY ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT ON FULFILLMENT O F CERTAIN CONDITIONS. THE REFERENCE IN THIS SECTION IS TO A PERSON. SEC TION 2(31) DEFINES PERSON TO INCLUDE INDIVIDUAL, HUF, COMPANY, FIRM, ETC. IT THUS POINTS OUT THAT NO ITA NO. 1201/JP/2019 SMT. MEERA DEVI KUMAWAT, JAIPUR VS. JCIT, JAIPUR 11 PERSON CAN TAKE OR ACCEPT LOANS OR DEPOSITS SUBJECT TO THE PROVISIONS OF THIS SECTION FROM ANY OTHER PERSON OTHERWISE THAN B Y AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT. IN THE BODY OF THE SECTION, THERE IS NO STIPULATION WHICH RESTRICT ITS APPLICATION ONLY TO ENTITIES OUTSIDE THE GROUND AND FAMILY OF THE ASSESSEE. THE ASSESSEE IS A SEPARATE PERSON AND WHEN SHE TAKES OR ACCEPTS LOAN OR DEPOSITS FROM HER FAMILY MEMBERS, SUCH OTHER DISTINCT PERSON ALSO COMES INTO PICTURE. ONE PERSON IS GIVING LOAN AND THE ASSESSEE, ANOTHER PERSON, IS ACCEPTING LOAN. IT, THEREFORE, BOILS DOWN THAT TWO PERSONS ARE INVOLVED IN THE TRA NSACTION OF ACCEPTING LOAN. TO CONTEND THAT THE ASSESSEE AND HER HUSBAND ARE ONE AND THE SAME PERSON IS WHOLLY IN CONTRAVENTION OF THE PROVI SIONS OF THE ACT. 16. IT WAS FURTHER SUBMITTED THAT THE ASSESSEE HAS NOWHERE ABLE TO DEMONSTRATE THE URGENCY TO RECEIVE LOAN IN CASH. IT WAS SUBMITTED THAT THE ASSESSEE MUST PROVE BEYOND THE SHADOW OF THE DOUBT THAT THERE EXISTED A REASONABLE CAUSE FOR NOT COMPLYING WITH THE CONDITI ONS CONTAINED IN SECTION 269SS AND IN THE INSTANT CASE, NO PLAUSIBLE EXPLANATION WAS EVER FURNISHED NOR THE CIRCUMSTANCES UNDER WHICH THE CAS H WAS ACCEPTED WAS EXPLAINED. IT WAS ACCORDINGLY SUBMITTED THAT IT IS A CLEAR CASE THE CONTRAVENTION OF PROVISIONS OF SECTION 269SS OF THE ACT. THUS, PENALTY U/S 271D OF THE ACT HAS BEEN RIGHTLY LEVIED BY THE JCIT AND CONFIRMED BY THE LD. CIT(A). IT WAS ACCORDINGLY SUBMITTED THAT THE O RDER SO PASSED BY THE LD. CIT(A) DESERVE TO BE CONFIRMED AS SECTION 269SS NOWHERE PROVIDES EXEMPTION IN RESPECT OF CASH LOAN TAKEN FROM HUSBAN D AND THE APPEAL OF THE ASSESSEE BE DISMISSED. 17. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. WE FIND THAT IN THE INSTANT CA SE, THERE IS A TRANSACTION OF PURCHASE OF PLOT OF LAND AND CONSTRUCTION THEREO N. THE PLOT OF LAND HAS ITA NO. 1201/JP/2019 SMT. MEERA DEVI KUMAWAT, JAIPUR VS. JCIT, JAIPUR 12 BEEN REGISTERED IN THE NAME OF THE ASSESSEE AND SOU RCE OF SUCH INVESTMENT IS MONEY RECEIVED FROM HER HUSBAND. WE F IND THAT SUCH A PRACTICE OF REGISTERING THE PROPERTY IN NAME OF THE WIFE IS GUIDED BY VARIOUS FAMILY AND SOCIETAL FACTORS BESIDES ENCOURA GEMENT OF THE GOVERNMENT FOR SUCH TRANSACTIONS ENTERED INTO BY FE MALE MEMBERS IN THE FAMILY BY WAY OF REDUCED STAMP DUTY. IN THE PRESEN T CASE, WHERE THE FAMILY OF THE ASSESSEE IS GUIDED BY ITS INTERNAL FA MILY REQUIREMENT AND ALSO BY SUCH POLICY INCENTIVE BY THE GOVERNMENT AND AT T HE SAME TIME, POOLING IN THE FAMILY FUNDS ESPECIALLY WHERE THE ASSESSEE D OESNT HAVE ANY KNOWN SOURCES OF INCOME, THE EXPLANATION OF THE ASSESSEE DESERVE TO BE APPRECIATED AND THE APPROACH OF THE AUTHORITIES NEE DS TO BE FLEXIBLE FOR APPRECIATING THE REASONABILITY OF THE EXPLANATION S O SUBMITTED BY THE ASSESSEE. ON PERSUAL OF THE REGISTERED SALE DEED, WE FIND THAT THERE IS PAYMENT OF CONSIDERATION BY WAY OF DEMAND DRAFT FOR RS 6 LACS WHICH HAS BEEN PAID IN ADVANCE AND REMAINING AMOUNT OF RS 1 L ACS WHICH HAS BEEN PAID IN CASH AT THE TIME OF REGISTRY AND HANDING OV ER OF THE POSSESSION. IT HAS BEEN STATED AT THE BAR BY THE LD AR THAT THE AS SESSEE HAD NO OPTION BUT TO DISCHARGE THE REMAINING CONSIDERATION IN CAS H AT THE TIME OF REGISTRY AS SO INSISTED BY THE SELLER OF THE PROPERTY AND IN ABSENCE THEREOF, THE DEAL MIGHT HAVE NOT FRUCTIFIED. WE FIND THE EXPLANA TION SO FURNISHED AS REASONABLE AND PLAUSIBLE AND DONOT FIND ANY MALAFID E IN THE EXPLANATION SO SUBMITTED AS EVERYTHING IS FLOWING FROM THE REGISTE RED SALE DEED WHERE TRANSACTIONS HAVE BEEN DULY DOCUMENTED INCLUDING TH E PAYMENT THROUGH DEMAND DRAFT AND CASH WHICH IS FROM THE KNOWN SOURC ES OF FUNDS CONTRIBUTED BY THE ASSESSEES HUSBAND. FURTHER, TH E ASSESSEE HAS EXPLAINED THE PAYMENT OF CONSTRUCTION EXPENSES WHIC H ARE ALSO REQUIRED TO BE INCURRED IN CASH TOWARDS THE PURCHASE OF CONSTRU CTION MATERIAL AND PAYMENT TO LABOURERS. WE THEREFORE FIND THAT THE A SSESSEE HAS OFFERED REASONABLE EXPLANATION JUSTIFYING THE CASH TRANSACT IONS AND THUS, IN THE ITA NO. 1201/JP/2019 SMT. MEERA DEVI KUMAWAT, JAIPUR VS. JCIT, JAIPUR 13 ENTIRETY OF FACTS AND CIRCUMSTANCES OF THE CASE AND CONSIDERING VARIOUS DECISIONS CITED AT THE BAR WHICH ALSO SUPPORT THE C ASE OF THE ASSESSEE ESPECIALLY THE DECISION OF THE COORDINATE BENCH IN CASE OF TUHINARA BEGUM WHERE THERE WAS A REVERSE SITUATION WHERE THE WIFE GAVE MONEY TO HUSBAND FOR CONSTRUCTION OF HOUSE WHICH WAS HELD NO T EXIGIBLE FOR LEVY OF PENATY U/S 271D, WE ARE OF THE CONSIDERED VIEW THAT THE ASSESSEE DOESNT DESERVE TO BE PUNISHED BY WAY OF LEVY OF PENALTY U/ S 271D FOR RECEIVING MONEY FROM HER HUSBAND FOR PURCHASE OF FAMILY PROPE RTY AND HENCE, THE SAME IS DIRECTED TO BE DELETED. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 21/10/2021. SD/- SD/- LANHI XKSLKBZ FOE FLAG ;KNO ( SANDEEP GOSAIN ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 21/10/2021 * GANESH KR. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SMT. MEERA DEVI KUMAWAT, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- JCIT, RANGE-04, JAIPUR 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 1201/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR