Bhupatbhai Jerambhai Mandani, Ahmedabad V. The Jt.CIT.,Bhavnagar Range-1, Bhavnagar

ITA 1309/AHD/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0234 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 26-07-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 07-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: B R POPAT
• Keywords: Reasonable cause

Judgement Text

I.T.A. NO . 1 309 /AHD/201 3 A SSESSMENT Y EAR: 200 8 - 09 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH, SMC , AHMEDABAD [CORAM: PRAMOD KUMAR AM] I.T.A. NO. 1 309 /A HD/ 20 1 3 ASSESSMENT Y EAR : 200 8 - 09 BHUPATBHAI JERAMBHAI MANDANI .... . ...... . ... . APPELLANT K.V. SHAL NO.1, GADHADA DIST. BHAVNAGAR 364 001. [ PAN: A RDPM 3451 F ] VS. JOINT COMMISSIONER OF IN COME TAX, BHAVNAGAR. ... ............ . RESPONDENT APPEARANCES BY: B.R. POPAT , FOR THE APPELLANT SATISH SOLANKI , FOR THE RESPONDENT D ATE OF CONCLUDING THE H EARING : 26 .0 7 .2016 DATE OF PRONOUNCING THE ORDER : 25 .10.2016 O R D E R 1. THIS APPEAL, FILED BY THE ASSESSEE , IS DIRECTED AGAINST THE ORDER DATED 2 ND APRIL, 2013 , PASSED BY THE LEARNED CIT ( A ), IN THE MATTER OF PENALTY UNDER SECTION 271D OF THE INCOME TAX ACT , 1961, FOR THE ASSESSMENT YEAR 2008 - 09. 2. GRIEVANCE RAISED BY THE ASSESSEE IS AS FOLLOWS : - T HE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) XX, AHMEDABAD HAS ERRED ON FACTS AND IN LAW IN: CONFIRMING THE PENALTY OF RS.9,67, 254/ - , WHICH W AS LEVIED BY THE JOINT COMMISSIONER OF INCOME TAX , BHAVNAGA R RANGE - 1, BHAVNAGAR UNDER SECTION 271D OF T HE ACT. CONSIDERING THE FACTS OF THE CASE AND THE PROVISIONS OF LAW, A S INTERPRETED BY VARIOUS COUR T S AND TRIBUNALS, HE OUGHT TO HAVE DELE TED THE SAME. I.T.A. NO . 1 309 /AHD/201 3 A SSESSMENT Y EAR: 200 8 - 09 PAGE 2 OF 3 3. BRIEFLY STATED, THE RELEVANT MATERIAL F ACTS ARE LIKE THIS. THE ASSESSEE IS A SALARIED PERSON. DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS RECEIVED CERTAIN CASH LOANS, IN VIO LATION OF SECTION 269SS, THOUGH DUE TO UNAVOIDABLE CIRCUMSTANCES. AS A MATTER OF FACT, IN THE RELEVANT ASSESSMENT ORDER ITSELF THE ASSESSING OFFICER HAS OBSERVED AS FOLLOWS : - 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE SUBMITTED THAT SHRI MANUBHAI KALYANBHAI, THE SON OF ASSESSEE'S SISTER WAS IN THE FINANCIAL CRISIS AT SURAT IN THE DIAMOND INDUSTRY. THEREFORE, IN ORDER TO BRING HIM OUT OF THE SAID FINANCIAL CRISIS, THE ASSESSEE MANAGED UNSECURED LOAN FROM FRIEN DS AND RELATIVES BY CASH O F RS.4, 84, 110/ - FROM SH RI KALYANBHAI BHIKHABHAI AND RS.4,83,144/ - FROM SHRI KANJIBHAI BHIKHABHA TOTALING TO RS.9,67,254/ - AND DEPOSITED THE SAID AMOUNT IN HIS ABOVE BANK ACCOUNT TO GIVE LOAN TO HIS SISTER'S SON SHRI MANUBHAI KALYANBHAI AT SURAT. THE CONTEN TION OF THE ASSESSEE WITH REGARD TO SOURCE OF RS.9,67 , 254/ - IS ACCEPTED . HOWEVER, SINCE THE SAID UNSECURED LOANS OF RS.9,67,254/ - WAS RECEIVED BY CASH, THE PROVISIONS OF SECTION 269SS OF THE ACT ARE VIOLATED. AS PER THE SAID PROVISIONS, NO PERSON SHALL TAK E OR ACCEPT FROM ANY OTHER PERSON ANY LOAN OR DEPOSIT OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT. ALSO, AS PE R THE PROVISIONS OF SECTION 271 D, IF A PERSON TAKES OR ACCEPTS ANY LOAN OR DEPOSIT IN CONTRAVENTION OF THE PROVISIONS O F SECTION 269SS SHALL BE LIABLE TO PAY, BY WAY OF PENALTY, A SUM EQUAL TO THE AMOUNT OF LOAN OR DEPOSIT TAKEN OR ACCEPTED. IN THE GIVEN CASE, THE ASSESSEE HAS TAKEN LOANS OF RS.9,67 , 254/ - BY CASH IN CONTRAVENTION OF THE PROVISIONS OF SECTION 269SS OF THE ACT, HE SHALL BE LIABLE TO PAY PENALTY U/S. 271D OF THE ACT TO THE EXTENT OF LOAN OF RS.9,67,254/ - . 4. IT WAS IN THIS BACKDROP THAT THE PENALTY UNDER SECTION 271D OF THE ACT W AS INITIATED AGAINST THE ASSESSEE . IN THE PENALTY PROCEEDINGS, HOWEVER, JOINT COMMISSIONER OF INCOME TAX IMPOSING THE PENALTY REJECTED THE REASONABLE CAUSE ON THE GROUND THAT AS A REGULAR ASSESSEE , HE OUGHT TO KNOW THE LAW. THE PENALTY OF RS.9,67,254/ - WAS ACCORDINGLY IMPOSED. AGGRIEVED, ASSESSEE CARRIED THE MATTER IN APPEAL BEF ORE THE LEARNED CIT(A) BUT WITHOUT ANY SUCCESS. LEANED CIT ( A ) INTER ALIA OBSERVED THAT TO FACILITATE SOMEONE, BY VIOLATING THE PROVISIONS OF THE ACT CANNOT BE SAID AS REASONABLE CAUSE . THE ASSESSEE IS AGGRIEVED AND IS IN FURTHER APPEAL BEFORE ME. I.T.A. NO . 1 309 /AHD/201 3 A SSESSMENT Y EAR: 200 8 - 09 PAGE 3 OF 3 5. H AVING HEARD THE RIVAL CONTENTIONS AND HAVING PERUSED THE MATERIAL ON RECORD, I FIND THAT IT IS NOT EVEN IN DISPUTE THAT THE ASSESSEE HAD A REASONABLE CAUSE F OR ACCEPTING CASH DEPOSITS INASMUCH AS THE ASSESSEE WAS IN DEEP FINANCIAL CRISIS AND THESE LOANS WE RE GIVEN TO BAIL HIM OUT OF THESE PROBLEMS. IN A SITUATION IN WHICH ASSESSEE IS TRAVERSING THROUGH SUCH A DIFFICULT PATH, THE LOANS ARE RAISED FROM RELATIVES AT DISTANT PLACES, ACCEPTING LOANS IN CASH IS THE COMPULSION OF THE ASSESSEE . IN THIS VIEW OF TH E MATTER AND RESPECTFULLY FOLLOWING A DIVISION BENCH ORDER OF THIS T RIBUNAL IN THE CASE OF SHREENA T HJI CORP ORATION VS. ACIT (58 TTJ 611), I DEEM IT FIT AND PROPER TO DELETE THE IMPUGNED PENALTY. THE ASSESSEE GETS THE RELIEF ACCORDINGLY. 6. IN THE RESULT, THE APPEAL IS ALLOWED. P RONOUNCED IN THE OPEN COURT TODAY ON 25 TH DAY OF OCTOBER , 2016. SD/ - PRAMOD KUMAR (ACCOUNTANT MEMBER) DATED: THE 25 TH DAY OF OCTOB ER , 2016. PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) CIT (4) CIT(A) (5) DR (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD