DCIT CEN CIR 7(3), MUMBAI V. MAHAVIR PREMISES P.LTD, MUMBAI

ITA 125/MUM/2017

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 4060 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-10-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: I
• Assessment Year: 2009-2010
• Appeal Filed On: 05-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAITANYA ANJARIA
• Keywords: Bonafide belief; Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM & SHRI RAM LAL NEGI , JM ITA NO. 125 / MUM/20 17 & ITA NO.126/MUM/2017 ( ASSESSMENT YEAR : 2009 - 10 ) ITA NO.143/MUM/2017 & ITA NO.144/MUM/2017 (ASSESSMENT YEAR: 2007 - 08 D CIT CEN CIR 7(3) R.NO.655, 6 TH FLOOR AAYAKAR BHAVAN M.K. ROAD, MUMBAI 400 020 VS. M/S. MAHAVIR PREMISES PVT. LTD., 216, SHAH AND NAHAR INDUSTRIAL ROAD OFF. DR. E. MOSES ROAD, WORLI, MUMBAI 400 018 PAN/GIR NO. AADCM5808Q ( APPELLANT ) .. ( RESPONDENT ) REVENUE BY SHRI CHAITANYA ANJARIA ASSESSEE BY SHRI VIJAY MEHTA DATE OF HEARING 12 / 09/ 201 8 DATE OF PRONOUNCEMENT 23 / 10 /201 8 / O R D E R PER R.C.SHARMA (A.M) : THESE ARE THE APPEALS FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A) - 4 9, MUMBAI DATED 31/10/2016 FOR A.Y.2007 - 08 & 2009 - 10 IN THE MATTER OF IMPOSITION OF PENALTY U/S.271D & 271E OF THE INCOME TAX ACT, 1961. 2. AT THE OUTSET, LEARNED AR PLACED ON RECORD THE ORDER OF THE T RIBUNAL DATED 31/05/2018 IN GROUP CONCERN OF THE ASSESS EE, WHEREIN THE TRIBUNAL AFTER CONSIDERING THE DECISION OF BOMBAY HIGH COURT HAS DELETED THE SIMILAR PENALTY AFTER OBSERVING AS UNDER: - ITA NO. 125/MUM/2017 AND OTHER APPEALS M/S. MAHAVIR PREMISES PVT. LTD., 2 5. WE HAVE CONSIDERED RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE HAVE DELIBER ATED ON THE JUDICIAL PRONOUNCEMENTS REFERRED BY LOWER AUTHORITIES IN THEIR RESPECTIVE ORDERS AS WELL AS CITED BY LEARNED AR AND DR DURING THE COURSE OF HEARING BEFORE US IN THE CONTEXT OF FACTUAL MATRIX OF THE CASE. WE HAD ALSO CAREFULLY GONE THROUGH THE O RDERS OF THE TRIBUNAL IN THE GROUP CASES OF THE ASSESSEE WHICH WAS UPHELD BY THE HONBLE JURISDICTIONAL HIGH COURT AS STATED ABOVE. 6. FROM THE RECORD WE FOUND THAT AO HAS LEVIED PENALTY U/S.271D FOR ACCEPTING LOAN BY WAY OF JOURNAL ENTRIES. THE ASSESSIN G OFFICER HAD PLACED RELIANCE ON THE JUDGMENT OF THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT V. TRIUMPH INTERNATIONAL FINANCE (I) LTD. (345 ITR 270) RENDERED ON 12.06.2012. IT IS NOT DISPUTED THAT IN THIS JUDGMENT IT WAS HELD THAT THERE WAS VI OLATION OF THE PROVISIONS OF S. 269T OF THE ACT IN A CASE WHERE THE LOAN WAS REPAID BY WAY OF A JOURNAL ENTRY ENTAILING LEVY OF PENALTY U/S. 271E OF THE ACT. HOWEVER, AT THE SAME TIME IT WAS ALSO HELD THAT LEVY OF PENALTY COULD BE AVOIDED ON SHOWING REASON ABLE CAUSE. IN THE PREMISES, LEVY OF PENALTY U/SS. 271D OF THE ACT IS NOT AUTOMATIC, BUT THE GENUINENESS OR OTHERWISE OF THE REASONS DUE TO WHICH REPAYMENT WAS MADE BY JOURNAL ENTRY HAS TO BE CONSIDERED JUDICIOUSLY. 7. IN THE ORDER REPORTED AS LODHA BUILD ERS (P) LTD. V. ACIT [2014] 163 TTJ 778 (MUM), A BUNCH OF APPEALS BELONGING TO LODHA GROUP (TO WHICH THE PRESENT ASSESSEE BELONGS) INVOLVING IDENTICAL ISSUE, WAS DISPOSED OF BY THE CO - ORDINATE BENCH IN WHICH LEVY OF SIMILAR PENALTIES WAS HELD TO BE NOT SU STAINABLE AS THERE WAS A REASONABLE CAUSE, COPIES OF WHICH HAVE BEEN PLACED ON RECORD. IN DECIDING THE DISPUTE IN FAVOUR OF THE ASSESSEE, THE HON'BLE TRIBUNAL HAD CONSIDERED AND APPLIED THE RATIO LAID DOWN BY THE HON'BLE JURISDICTIONAL HIGH COURT IN THE CA SE OF CIT V. TRIUMPH INTERNATIONAL FINANCE (I) LTD. (345 ITR 270). 8. THE AFORESAID ORDER OF THE HON'BLE TRIBUNAL WAS APPROVED BY THE HONBLE JURISDICTIONS! HIGH COURT IN THEIR JUDGMENT AND ORDER DATED 06.02.2018 IN THE CASE OF CIT V. AJINATH HI - TECH BUIL DERS PVT LTD. AND OTHERS, COPIES OF WHICH HAVE ALSO BEEN PLACED ON RECORD. IN THIS CASE, IT WAS ALSO HELD THAT PRIOR TO THE JUDGMENT IN CIT V. TRIUMPH INTERNATIONAL FINANCE (I) LTD. (345 ITR 270), THERE WERE SERIES OF ORDERS ON THIS POINT HOLDING THAT JOUR NAL ENTRY WOULD NOT FALL FOUL OF S. 269SS OF THE ACT. SINCE THE JUDGMENT IN CIT V. TRIUMPH INTERNATIONAL FINANCE (I) LTD. (345 ITR 270) WAS RENDERED ON 12.06.2012, IT WAS HELD, THAT THE ASSESSEE COULD HAVE HAD A BONAFIDE BELIEF PRIOR TO THAT DATE THAT THER E WAS NO VIOLATION OF S. 269SS OF THE ACT IN ACCEPTING LOAN BY JOURNAL ENTRY. ITA NO. 125/MUM/2017 AND OTHER APPEALS M/S. MAHAVIR PREMISES PVT. LTD., 3 9. WHILE DECIDING THE ISSUE, THE CIT(A) HAS ALSO FOLLOWED THE DECISION OF JURISDICTIONAL HIGH COURT IN CASE OF GROUP CONCERN OF THE CASE. THE FACTS AND CIRCUMSTANCES DURING THE YEAR UNDER CONSIDERATION ARE SAME, ACCORDINGLY, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) FOR DELETING THE PENALTY IMPOSED U/S.271D BY RELYING ON THE DECISION OF JURISDICTIONAL HIGH COURT IN GROUP CASE OF THE ASSESSEE. 10. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. 3. WE HAD CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS ORDER PASSED BY THE TRIBUNAL IN THE CASE OF GROUP CONCERNS, WHEREIN UNDER SIMILAR FACTS AND CIRCUMSTANCES PENALTY IMPOSED U/S.271D AND 271E WAS H ELD TO BE NOT L EV IABLE IN TERMS OF DECISION OF BOMBAY HIGH COURT IN CASE OF TRIUMPH INTERNATIONAL FINANCE (I) LTD (SUPRA). IT WAS OBSERVED THAT THERE WAS A REASONABLE CAUSE FOR S QUA RING ALL THE ACCOUNT S THROUGH GENERAL ENTRIES. AS THE FACTS AND CIRCUMSTANC ES IN THE APPEALS BEFORE US ARE PARIMATERIA WITH THE FACTS AND CIRCUMSTANCES DISCUSSED BY THE TRIBUNAL IN ITS ORDER DATED 31/05/2018, RESPECTFULLY FOLLOWING THE ORDER OF THE TRIBUNAL IN THE CASE OF GROUP CONCERN, WE DO NOT FIND ANY INFIRMITY IN THE ORDER O F CIT(A) FOR DELETING THE PENALTY IMPOSED U/S.271D AND 271E OF THE ACT. 4. IN THE RESULT ALL THE APPEALS OF THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23 / 10 /201 8 SD/ - ( RAM LAL NEGI ) SD/ - (R.C.SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 23 / 10 /201 8 KARUNA SR. PS ITA NO. 125/MUM/2017 AND OTHER APPEALS M/S. MAHAVIR PREMISES PVT. LTD., 4 COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, IT AT, MUMBAI 6. GUARD FILE. //TRUE COPY//