ITO, Nashik V. Shri Bhupendra Shantilal Shah, Nashik

ITA 1400/PUN/2013

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 7903 (ITAT-PUNE)
• Duration Of Justice: 6 year(s) 1 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-08-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 17-10-2017
• Assessment Year: 2002-2003
• Appeal Filed On: 03-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N ASHOK BABU
• Assessee Lawyers: V L JAIN
• Keywords: Additional evidence; Tax effect
• Section: 271D; 271E

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, PUNE . , , BEFORE SHRI D. KARUNAKARA RAO, AM AND SHRI VIKAS AWASTHY, JM . / ITA NOS.1400 TO 1405/PUN/2013 A. YS. : 2002-03, 2003-04, 2005-06, 2006-07 & 2008-09 ITO, CENTRAL-1, NASHIK. ....... / APPELLANT / V/S. BHUPENDRA SHANTILAL SHAH, 6720, BHAVIK BUNGLOW, TILAK WADI ROAD, NASHIK- 422001. PAN : ADBPS3062J / RESPONDENT REVENUE BY : SHRI N. ASHOK BABU ASSESSEE BY : SHRI V. L. JAIN / DATE OF HEARING : 13.08.2019 / DATE OF PRONOUNCEMENT : 13.08.2019 / ORDER PER D. KARUNAKARA RAO, AM: THERE ARE SIX APPEALS UNDER CONSIDERATION RELATING TO PENALTY U/S 271D & 271E OF THE ACT. ALL THE SIX APPALS FILED BY THE REVENUE ARE AGAINST THE SEPARATE ORDER OF THE CIT(A)-1, NASHIK COMMONLY DATED 09.04.2013 FOR THE ASSESSMENT YEARS 2002-03, 2003-04, 2005-06, 2006- 07 & 2008-09 RESPECTIVELY. ITA NOS.1400, 1401 & 1403 TO 1405/PUN/2013 A.YS. : 2002-03, 2005-06, 2006-07 & 2008-09 2. THE APPEALS OF THE REVENUE IN ITA NO.1400, 1401 & 1403 TO 1405/PUN/2013 ( FIVE APPEALS ) INVOLVE THE PENALTY U/S 271D AND 271E OF THE I.T. ACT LEVIED BY THE ASSESSING OFFICER AND CANCELLED BY THE CIT(A). 2 ITA NOS.1400 TO 1405/PUN/2013 3. THE LD. COUNSEL FOR THE ASSESSEE FILED A CHART SHOWING THE ASSESSMENT YEAR-WISE AMOUNT OF PENALTY LEVIED BY THE ASSESSING OFFICER AND THE SAME IS AS UNDER : - ITA NO. A.Y. PENALTY U/S 271D/271E 1400/PN/2013 2002-03 1,862,800 1401/PN/2013 2002-03 400,000 1403/PN/2013 2004-05 1,400,000 1404/PN/2013 2006-07 519,475 1405/PN/2013 2008-09 2,000,000 4. BEFORE US, AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE APPEALS OF THE REVENUE ARE LIABLE TO BE DISMISSED ON ACCOUNT OF LOW TAX EFFECT IN TERMS OF LATEST CBDT CIRCULAR NO.17/2019 [F.NO.279/MISC.142/2007-ITJ (PT)] DATED 08 TH AUGUST, 2019 READ WITH CIRCULAR NO.3 OF 2018 DATED 11.07.2018. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE REVENUE IN APPEALS RAISED GROUNDS ASSAILING THE FINDINGS OF CIT(A) IN DELETING THE ADDITIONS. THUS, THE TAX EFFECT ON THE SAID ADDITIONS IS LESS THAN RS.50 LAKHS. 5. THE LD. DR FOR THE REVENUE FAIRLY ADMITTED THAT IN THE PRESENT APPEALS BY THE REVENUE THE TAX EFFECT IS LESS THAN RS.50 LAKHS. 6. BOTH SIDES HEARD. THE REVENUE IS IN APPEALS AGAINST THE ORDER OF CIT(A) IN DELETING THE ADDITIONS. UNDISPUTEDLY, THE TAX EFFECT INVOLVED IN APPEALS IS LESS THAN THE MONETARY LIMIT PRESCRIBED BY THE RECENT CBDT CIRCULAR NO.17/2019 [F.NO.279/MISC.142/2007-ITJ (PT)] DATED 08 TH AUGUST, 2019 READ WITH CIRCULAR NO.3 OF 2018 DATED 11.07.2018 FOR FILING OF APPEALS BEFORE THE TRIBUNAL BY THE DEPARTMENT. THE CBDT VIDE CIRCULAR DATED 08-08-2019 (SUPRA) HAS AMENDED PARA 3 OF CIRCULAR NO.3 OF 2018 DATED 11-07-2018 THEREBY ENHANCING MONETARY LIMIT OF TAX EFFECT 3 ITA NOS.1400 TO 1405/PUN/2013 FROM RS.20 LAKHS TO RS.50 LAKHS FOR FILING OF APPEALS BY THE DEPARTMENT BEFORE THE TRIBUNAL. THUS, WITHOUT GOING INTO MERIT OF THE ISSUES RAISED IN THE APPEALS, IN VIEW OF THE CBDT CIRCULAR (SUPRA) THE PRESENT APPEALS OF THE REVENUE ARE DISMISSED ON ACCOUNT OF LOW TAX EFFECT . 7. BEFORE PARTING, WE CLARIFY HERE THAT THE REVENUE SHALL BE AT LIBERTY TO APPROACH THE TRIBUNAL FOR RESTORATION OF APPEALS, WITH THE REQUISITE MATERIAL TO SHOW THAT THE APPEALS ARE PROTECTED BY THE EXCEPTIONS PRESCRIBED IN PARA 10 OF THE CIRCULAR DATED 11-07-2018 AND ITS AMENDMENT DATED 20-08-2018. 8. IN THE RESULT, ALL THE FIVE APPEALS OF THE REVENUE IN ITA NO.1400, 1401 & 1403 TO 1405/PUN/2013 ARE DISMISSED. ITA NO.1402/PUN/2013 A.Y. 2003-04 9. NOW, WE SHALL TAKE UP THE SIXTH PENALTY APPEAL I.E. ITA NO.1402/PUN/2013 FOR THE ASSESSMENT YEAR 2003-04 FOR ADJUDICATION IN THE FOLLOWING PARAGRAPHS. 10. THE ISSUE RAISED IN GROUND NO.1 RELATES TO THE DELETION OF PENALTY OF RS.79,89,118/- IMPOSED BY THE ASSESSING OFFICER U/S 271E OF THE ACT. 11. BEFORE US, AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE RELIED ON THE ORDER OF THE CIT(A) AND SUBMITTED THAT THE ORDER OF THE CIT(A) CONSTITUTES A WELL REASONED ONE ON THIS ISSUE AND THE CIT(A) AS PER DISCUSSION GIVEN IN PARA 9 OF HIS ORDER RIGHTLY CANCELLED THE PENALTY AS LEVIED BY THE ASSESSING OFFICER. 4 ITA NOS.1400 TO 1405/PUN/2013 12. ON THE OTHER HAND, LD. DR FOR THE REVENUE RELIED ON THE ORDER OF THE ASSESSING OFFICER. 13. WE HEARD BOTH THE SIDES ON THIS LIMITED ISSUE OF PENALTY IMPOSED U/S 271E OF THE ACT. WE FIND THE CONTENTS OF PARA 9 OF THE ORDER OF THE CIT(A) ARE RELEVANT AND THE SAME ARE EXTRACTED AS UNDER :- 9. I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE AND THE RIVAL CONTENTIONS. ON PERUSAL OF THE SAME, IT HAS BEEN NOTICED THAT THE MAIN CONTENTIONS RAISED BY THE APPELLANT AGAINST THE PENALTY U/S.271E ARE ON TWO COUNTS. THE FIRST CONTENTION IS THAT THE APPELLANT HAS RECEIVED ADVANCES AGAINST PROPOSED SALE OF PLOTS AND THE SAME HAVE BEEN REPAID AND, HENCE, THE PROVISIONS OF SECTION 269T ARE NOT APPLICABLE, AS THE SAID PROVISIONS ARE APPLICABLE ONLY TO LOANS AND DEPOSITS AND NOT TO THE ADVANCES REPAID IN THE COURSE OF BUSINESS OF LAND DEVELOPER AND DEALER. THE A.O. HAS MENTIONED IN THE PENALTY ORDER THAT THIS CONTENTION ABOUT ADVANCE RECEIVED AND REPAID AGAINST PROPOSED SALE OF PLOTS IS NOT SUPPORTED BY ANY DOCUMENT OR CONFIRMATION. ON THE OTHER HAND, THE APPELLANT HAS CLAIMED THAT THE FACT ABOUT RECEIPT OF ADVANCE AND REPAYMENT OF THE SAME AGAINST SALE OF PLOTS IS MENTIONED IN THE BOOKS OF ACCOUNT AND IN SUPPORT OF THIS CLAIM, THE APPELLANT HAS FILED COPIES OF LEDGER ACCOUNTS OF THE CUSTOMERS. IT IS UNDISPUTED FACT THAT THE APPELLANT IS ENGAGED IN THE BUSINESS OF LAND DEALER AND DEVELOPER SINCE LAST MANY YEARS. IT IS ALSO UNDISPUTED FEATURE OF THE SAID BUSINESS THAT THE PAYMENTS FOR PROPOSED PURCHASE AND DEVELOPMENT OF LAND IS GENERALLY MADE OUT OF ADVANCES RECEIVED FROM PROPOSED PURCHASERS OF PLOTS IN THE SAID LAND PROPOSED TO BE PURCHASED. THE LAND DEAL ENTERED INTO BY THE APPELLANT COULD NOT BE MATERIALIZED DUE TO DISPUTES AND PASSAGE OF SUBSTANTIAL TIME AND, HENCE, THE ADVANCES RECEIVED WERE REPAID BY THE APPELLANT. THE A.O. HAS ALSO NOT BROUGHT ON RECORD ANY CORROBORATIVE EVIDENCE IN SUPPORT OF HIS CONTENTION THAT THE APPELLANT HAS RECEIVED CASH LOAN AND REPAID THE SAME AND NOT RECEIVED AND REPAID ADVANCE AGAINST THE PROPOSED SALE OF PLOT. IN VIEW OF THE ABOVE FACTS AND DISCUSSION, I AM OF THE CONSIDERED VIEW THAT THE A.O. IS NOT JUSTIFIED IN IMPOSING PENALTY OF RS.79,89,118/- U/S.271E IN RESPECT OF THE AMOUNT RECEIVED AND REPAID AS ADVANCE AGAINST PROPOSED SALE OF PLOTS. THIS PROPOSITION OF LAW IS ALSO SUPPORTED BY THE DECISIONS IN THE CASES OF CIT VS. KAILASHCHANDRA DEEPAK KUMAR AND KARNATAKA GINNING & PRESSING FACTORY VS. JCIT (SUPRA), RELIED ON BY THE APPELLANT. THE SECOND CONTENTION RAISED BY THE APPELLANT IS THAT AS THE APPELLANT HAS OFFERED TO TAX THE ADVANCES RECEIVED TO THE EXTENT OF RS. 68.50 LACS AND AS THE A.O. HAS MADE, FURTHER, ADDITION OF RS. 10.50 LACS IN RESPECT OF OPENING BALANCE WHICH HAS BEEN CLAIMED OUT OF ADVANCES RECEIVED. THE APPELLANT CLAIMED THAT THE SAID AMOUNTS OF ALLEGED LOANS HAVE BEEN ALREADY TAXED AS INCOME AND, HENCE, PENALTY ON REPAYMENT OF THE SAID ALLEGED LOANS CANNOT BE JUSTIFIED. IT IS SETTLED LAW THAT IF THE ADDITION IS MADE IN RESPECT OF ANY AMOUNT RECEIVED AS CASH LOAN, THEN, PENALTY U/S.271E CANNOT BE IMPOSED ON REPAYMENT OF THE SAID LOAN FOR ALLEGED CONTRAVENTION OF SECTION 269T OF THE ACT. THE ABOVE CONTENTION OF THE APPELLANT IS FOUND TO BE CORRECT FROM THE APPELLATE ORDER IN THE QUANTUM APPEAL OF A.Y. 2003-04 DATED 09/02/2012. THE PENALTY IMPOSED BY THE A.O. IS ALSO NOT JUSTIFIED ON THE ABOVE COUNT. 5 ITA NOS.1400 TO 1405/PUN/2013 FURTHER, THE CONTENTIONS OF THE APPELLANT ON THE ABOVE COUNTS, EVEN IF CONSIDERED TO BE DEBATABLE, THEN ALSO, PENALTY U/S. 271E IS NOT LEVIABLE AS IT IS SETTLED LAW THAT PENALTY CANNOT BE IMPOSED ON DEBATABLE ISSUES/DEBATABLE FACTS AND IN ORDER TO IMPOSE THE PENALTY, THE ALLEGED DEFAULT IS TO BE PROVED WITH CORROBORATIVE EVIDENCE. IN VIEW OF THE ABOVE FACTS AND DISCUSSION, I AM OF THE CONSIDERED VIEW THAT THE A.O. IS NOT JUSTIFIED IN IMPOSING PENALTY OF RS.79,89,118/- U/S 271E OF THE ACT. THE IMPUGNED PENALTY ORDER DATED 29/09/2010 U/S 271E IMPOSING PENALTY OF RS.79,89,118/- IS, THEREFORE, CANCELLED. THE A.O. IS DIRECTED ACCORDINGLY. GROUND NOS.1 TO 6 ARE ALLOWED. 14. FROM THE ABOVE, IT IS EVIDENT THAT THE AMOUNTS RECEIVED BY ASSESSEE AND PAID BY THE ASSESSEE ARE MERE THE ADVANCES AND NOT THE LOANS OR DEPOSITS AS MENTIONED IN SECTION 269SS/269T OF THE ACT. THE ADVANCES ARE OUTSIDE THE SCOPE OF THESE PENALTY PROVISIONS. THE CIT(A) ALSO GAVE OTHER REASONS FOR GRANT OF RELIEF TO THE ASSESSEE. THE REASONS GIVEN BY THE CIT(A) HAS MERITS. THEREFORE, WE FIND THE ORDER OF THE CIT(A) IS FAIR AND REASONABLE ON THIS ISSUE AND IT DOES NOT CALL FOR ANY INTERFERENCE. THUS, THE GROUND NO.1 OF THE REVENUE IS DISMISSED . 15. REGARDING THE ISSUE RAISED IN GROUND NO.2 BY THE REVENUE I.E. DELAY IN FILING OF THE APPEAL BEFORE THE CIT(A), WE FIND THE ORDER OF THE CIT(A) WAS PASSED ON 29.09.2010 AND THE SAME WAS NOT SERVED TILL THE ASSESSEE APPLIED ON 26.04.2012 FOR CERTIFIED COPY OF PENALTY ORDER. CONSIDERING THE SAME, WE ARE OF THE OPINION, THE CIT(A) RIGHTLY ADMITTED THE APPEAL OF THE ASSESSEE AND CONDONED THE DELAY. THEREFORE, THE CIT(A) HAS RIGHTLY CONDONED THE DELAY. WE AFFIRM. ACCORDINGLY, THE GROUND NO.2 OF THE REVENUE IS DISMISSED . 16. REGARDING THE ISSUE RAISED IN GROUNDS NO.3 AND 4 RELATING TO INVOKING OF THE PROVISIONS OF RULE 46A OF THE I.T. RULES, WE FIND THE DOCUMENTS ENTERTAINED BY THE CIT(A) ARE MERELY THE GIST OF THE BANK OF 6 ITA NOS.1400 TO 1405/PUN/2013 ACCOUNT OF THE ASSESSEE EXTRACTED FROM THE BOOKS ALREADY EXAMINED BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. THEREFORE, THERE IS NO CASE OF ADMITTING OF ADDITIONAL EVIDENCES BY THE CIT(A) AT THE BACK OF THE ASSESSING OFFICER. ACCORDINGLY, THE ORDER OF THE CIT(A) IS FAIR AND REASONABLE ON THIS ISSUE AND IT DOES NOT CALL FOR ANY INTERFERENCE. THUS, GROUNDS NO.3 AND 4 OF THE REVENUE ARE DISMISSED . 17. GROUNDS NO.5 TO 8 BEING GENERAL IN NATURE AND THE SAME ARE DISMISSED AS SUCH. 18. IN THE RESULT, THE APPEAL OF THE REVENUE IN ITA NO.1402/PUN/2013 FOR THE ASSESSMENT YEAR 2003-04 IS DISMISSED. 19. TO SUM UP, ALL THE SIX APPEALS OF THE REVENUE ARE DISMISSED AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH DAY OF AUGUST, 2019. SD/- SD/- ( /VIKAS AWASTHY) ( . /D. KARUNAKARA RAO) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / PUNE; / DATED : 13 TH AUGUST, 2019. SUJEET / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT. 2. / THE RESPONDENT. 3. THE CIT(A)-1, NASHIK. 4. THE CIT (CENTRAL), NAGPUR. 5. , , , / DR, ITAT, A BENCH, PUNE. 6. / GUARD FILE. / BY ORDER, // TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE.