B.Raajaraajan, Erode V. JCIT, Salem

ITA 1371/CHNY/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95916 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2003-2004
• Appeal Filed On: 04-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: S SRIDHAR
• Keywords: Bonafide belief; Reasonable cause; Commercial expediency

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI ... , ! ', $ %& BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER ./ ITA NO.1371/MDS/2015 ( )( / ASSESSMENT YEAR : 2003-04 SHRI B. RAAJARAAJAN, 36/11, AVAAIYAR STREET, CST COLONY, VEERAPPAN CHATRAM, ERODE 638 004. PAN : ACPPR 5085 F V. THE JOINT COMMISSIONER OF INCOME TAX, CENTRAL RANGE, SALEM. (+,/ APPELLANT) (-.+,/ RESPONDENT) +, / 0 / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE -.+, / 0 / RESPONDENT BY : SHRI A.V. SREEKANTH, JCIT 1 / 2$ / DATE OF HEARING : 05.08.2015 34) / 2$ / DATE OF PRONOUNCEMENT : 21.08.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS), CHENNAI, DATED 2 I.T.A. NO.1371/MDS/15 30.01.2015, CONFIRMING THE PENALTY LEVIED BY THE AS SESSING OFFICER UNDER SECTION 271D OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. SHRI S. SRIDHAR, THE LD.COUNSEL FOR THE ASSESSEE , SUBMITTED THAT THERE WAS A DELAY OF 36 DAYS IN FILING THE APP EAL BEFORE THIS TRIBUNAL. ACCORDING TO THE LD. COUNSEL, THE ASSESS EE INCURRED A HUGE LOSS DURING THE FINANCIAL YEAR 2014-15 IN SHAR E TRADING BUSINESS. THEREFORE, HE COULD NOT AFFORD TO PAY FEE S FOR FILING APPEAL BEFORE THIS TRIBUNAL. THE LD.COUNSEL EXPLAINED THA T THE ASSESSEE WAS UNDER THE BONAFIDE BELIEF THAT THE APPEAL FEE W AS ` 10,000/- AND HE COULD NOT EVEN PAY THAT AMOUNT. AFTER CLARIFICA TION, THE ASSESSEE WAS ADVISED TO PAY ` 500/- AS APPEAL FEE FOR FILING APPEAL AGAINST THE PENALTY ORDER. EVEN THIS AMOUNT OF ` 500/- COULD NOT BE PAID BY THE ASSESSEE. WITH GREAT DIFFICULTY, THE ASSESSEE WAS ABLE TO GENERATE FUNDS AND THEREAFTER HE WAS ABLE TO FILE THE APPEAL . THEREFORE, THE LD.COUNSEL PRAYED THAT THE DELAY OF 36 DAYS MAY BE CONDONED. 3. WE HEARD SHRI A.V. SREEKANTH, THE LD. DEPARTMENT AL REPRESENTATIVE ALSO. THE LD. D.R. SUBMITTED THAT D URING THE ASSESSMENT YEAR 2008-09, THE ASSESSEE EARNED PROFIT OF ` 26,02,390/- AND THE TOTAL INCOME ASSESSED BY THE AS SESSING OFFICER WAS ` 28,02,390/-. THE CLAIM OF THE ASSESSEE IS THAT HE SUFFERED A LOSS DURING THE FINANCIAL YEAR 2014-15. THEREFORE, HE 3 I.T.A. NO.1371/MDS/15 COULD NOT PAY THE APPEAL FEE AT THE RELEVANT POINT OF TIME FOR FILING APPEAL BEFORE THIS TRIBUNAL. THIS CLAIM OF THE ASS ESSEE IS NOT CONTROVERTED BY THE DEPARTMENT. THEREFORE, THIS TR IBUNAL IS OF THE CONSIDERED OPINION THAT THE FINANCIAL DIFFICULTY FA CED BY THE ASSESSEE IN FILING THE APPEAL BEFORE THIS TRIBUNAL HAS TO BE CONSTRUED AS SUFFICIENT CAUSE FOR NOT FILING APPEAL BEFORE THIS TRIBUNAL. ACCORDINGLY, THE DELAY OF 36 DAYS IS CONDONED AND T HE APPEAL IS ADMITTED. 4. NOW COMING TO THE MERIT OF THE APPEAL, THE ASSES SING OFFICER FOUND THAT THE ASSESSEE RECEIVED ` 2,30,000/- FROM HIS FATHER SHRI G. BHARATHAN. THE ASSESSEE ALSO RECEIVED A SUM OF ` 1,60,000/- FROM HIS MOTHER SMT. B. PUSHPA. ANOTHER SUM OF ` 1,25,000/- WAS RECEIVED BY THE ASSESSEE FROM ONE SMT. D. VIJAYA, W HO IS HIS MOTHERS SISTER. ACCORDING TO THE LD. COUNSEL, DUE TO URGENT COMMERCIAL NECESSITY, THE ASSESSEE BORROWED FUNDS I N CASH AND DEPOSITED THE SAME ON THE VERY SAME DAY IN THE BANK ACCOUNT FOR CLEARING THE CHEQUE ISSUED BY THE ASSESSEE. REFERR ING TO THE COPIES OF THE BANK STATEMENTS, THE LD.COUNSEL SUBMI TTED THAT THE CASH RECEIVED BY THE ASSESSEE FROM HIS CLOSE RELATI VES WERE DEPOSITED IN THE BANK ACCOUNT AND THE SAME WAS CLEA RED IMMEDIATELY ON THE NEXT DAY FOR CLEARING THE CHEQUE . THEREFORE, 4 I.T.A. NO.1371/MDS/15 THERE WAS A REASONABLE CAUSE ON THE PART OF THE ASS ESSEE FOR RECEIVING THE AMOUNT EXCEEDING ` 20,000/- IN CASH. 5. ON THE CONTRARY, SHRI A.V. SREEKANTH, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT ADMITTED THE ASSESSE E HAS RECEIVED CASH EXCEEDING ` 20,000/- FROM THREE PERSONS. THERE WAS NO REASONABLE CAUSE WHICH FORCED THE ASSESSEE TO RECEI VE THE MONEY IN CASH. PLACING RELIANCE ON THE DECISION OF THIS BENCH OF THE TRIBUNAL IN THENAMAL CHHAJJER V. JCIT (2005) 96 ITD 210, THE LD. D.R. SUBMITTED THAT EVEN FOR GENUINE LOAN OR DEPOSI T, THE ASSESSEE HAS TO EXPLAIN WHY IT WAS OBTAINED IN CASH. IF THE EXPLANATION WAS REASONABLE OR ACCEPTABLE, THEN PENALTY MAY NOT BE L EVIED UNDER SECTION 271D OF THE ACT. IN THIS CASE, THERE WAS N O EXPLANATION EXCEPT TO SAY THAT THE ASSESSEE NEEDED MONEY URGENT LY FOR BUSINESS PURPOSE. THE LD. D.R. HAS ALSO PLACED HIS RELIANCE ON THE JUDGMENT OF MADRAS HIGH COURT IN P.BASKAR V. CIT (2 012) 340 ITR 560. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE RECEIVED MONEY FROM HIS OWN FATHER, MOTHER AND MOTHERS SISTER. THE ASSESSEE FILED COPIES OF THE BANK STAT EMENTS TO SHOW THAT THE AMOUNT WAS DEPOSITED IN THE BANK AND IT WA S CLEARED ON THE 5 I.T.A. NO.1371/MDS/15 VERY NEXT DAY FOR HONOURING THE CHEQUE ISSUED BY HI M. THIS TRIBUNAL FOUND THAT THE MADRAS HIGH COURT IN CIT V. SMT. M. YESODHA (2013) 351 ITR 265 HAD AN OCCASION TO CONSI DER AN IDENTICAL ISSUE. THE MADRAS HIGH COURT FOUND THAT A TRANSACTION BETWEEN CLOSE RELATIVES, I.E. ASSESSEE AND HIS DAUG HTER-IN-LAW AND FATHER-IN-LAW, WAS A REASONABLE TRANSACTION AND GEN UINE ONE DUE TO URGENT NECESSITY IN PAYING THE MONEY TO SELLER. IN THIS CASE ALSO, THE ASSESSEE ADMITTEDLY RECEIVED CASH FROM HIS FATH ER, MOTHER AND MOTHERS SISTER. IN VIEW OF THE CLOSE RELATIONSHIP BETWEEN THE ASSESSEE AND FROM WHOM THE MONEY WAS RECEIVED, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE JUDGMENT OF MADR AS HIGH COURT IN SMT. M. YESODHA (SUPRA) IS SQUARELY APPLICABLE TO T HE FACTS OF THE CASE. THE ASSESSEE HAS ALSO DEMONSTRATED THAT THE MONEY RECEIVED IN CASH WAS DEPOSITED IN THE BANK ACCOUNT FOR CLEARING THE CHEQUE ISSUED DUE TO COMMERCIAL EXPEDIENCY. THEREF ORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THERE WA S A REASONABLE CAUSE ON THE PART OF THE ASSESSEE IN RECEIVING THE MONEY IN CASH AS FOUND BY THE MADRAS HIGH COURT IN SMT. M. YESODHA ( SUPRA). 7. WE HAVE ALSO CAREFULLY GONE THROUGH THE JUDGMENT OF MADRAS HIGH COURT IN P. BASKAR (SUPRA). IN THE CASE BEFOR E THE HIGH COURT, IT IS NOT THE CASE OF THE ASSESSEE THAT THE MONEY W AS RECEIVED FROM 6 I.T.A. NO.1371/MDS/15 CLOSE RELATIVES. THE ASSESSEE HAS RECEIVED MONEY F ROM VARIOUS PERSONS. THEREFORE, THIS TRIBUNAL IS OF THE CONSID ERED OPINION THAT THE JUDGMENT OF MADRAS HIGH COURT IN P. BASKAR (SUP RA) MAY NOT BE APPLICABLE. SIMILARLY, THE DECISION OF THIS BENCH OF THE TRIBUNAL IN THENAMAL CHHAJJER (SUPRA) IS ALSO NOT APPLICABLE TO THE FACTS OF THE CASE, SINCE IT WAS NOT THE CASE OF RECEIVING MONEY FROM CLOSE RELATIVES. HENCE, BY FOLLOWING THE JUDGMENT OF MAD RAS HIGH COURT IN SMT. M. YESODHA (SUPRA), THE ORDERS OF THE LOWER AU THORITIES ARE SET ASIDE AND THE PENALTY IS DELETED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. ORDER PRONOUNCED ON 21 ST AUGUST, 2015 AT CHENNAI. SD/- SD/- ( ! ' ) ( ... ) (CHANDRA POOJARI) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 6 /DATED, THE 21 ST AUGUST, 2015. KRI. / -278 98)2 /COPY TO: 1. +, /APPELLANT 2. -.+, /RESPONDENT 3. 1 :2 () /CIT(A), CHENNAI-18 4. 1 :2 /CIT, CENTRAL II, CHENNAI 5. 8; -2 /DR 6. <( = /GF.