AKBAR MOHAMEDALI KAZI, NAVI MUMBAI V. JT CIT 22(3), MUMBAI

ITA 1406/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 2338 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 28-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M RAJAN
• Assessee Lawyers: B N RAO
• Keywords: Reasonable cause
• Section: 273B; 271D

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES A, MUMBAI BEFORE S/SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER & RAM LAL NEGI, JUDICIAL MEMBER ITA NO.1406/MUM/2017 ASSESSMENT YEAR : 2009-10 AKBAR MOHAMEDALI KAZI, SHOP NO.18/19, GROUND FLOOR, MAYURESH COSMOS PREMIUM CHS, SEC-11, PLOT NO.37, BELAPUR, NAVI MUMBAI PAN AFAPK0759D VS. JOINT CIT 22(3), MUMBAI (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI B N RAO RESPONDENT BY : SHRI M RAJAN DATE OF HEARING : 0 6 . 03 .201 9 DATE OF PRONOUNCEMENT : 07 . 0 3 . 201 9 O R D E R PER SHAMIM YAHYA, ACCOUNTANT MEMBER: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST ORDER OF LEARNED CIT(A)- 26, MUMBAI, DATED 09.01.2017 AND PERTAINS TO ASSESS MENT YEAR 2009-10. 2. THE GROUNDS OF APPEAL READ AS UNDER: ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE - 1. THE LD. COMMISSIONER OF INCOME TAX (APPEAL S) ERRED IN UPHOLDING THE PENALTY OF ` 4,00,000/- LEVIED UNDER SECTION 271D OF THE ACT BY THE ASSESSING OFFICER. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING O FFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, FOUND THAT THE ASSESSEE HAD RECEIVED LOANS IN CASH TOTALING TO RS. 4,00,000/- FROM M/S. GREENFIELD INF RA PVT LTD. SINCE THIS CONSTITUTED A VIOLATION OF THE PROVISIONS OF SECTION 269SS OF T HE INCOME TAX ACT, PENALTY WAS ITA NO.1406//MUM/2017 AKBAR MOHAMEDALI KAZI 2 LEVIED BY THE JOINT COMMISSIONER OF INCOME TAX VIDE HIS ORDER DATED 03/03/2014 AMOUNTING TO RS 4,00,000/- U/S. 271D OF THE ACT. TH E ASSESSEE'S PLEA THAT CASH LOAN WAS TAKEN ON DIFFERENT OCCASIONS IN SMALL AMOUNTS F ROM FRIENDS AND RELATIVES DUE TO BUSINESS EXIGENCIES, WAS REJECTED BY THE AUTHORITIE S BELOW. AGGRIEVED, ASSESSEE IS IN APPEAL BEFORE US. 4. WE HAVE HEARD BOTH THE COUNSEL AND PERUSED THE R ECORDS. LEARNED COUNSEL OF THE ASSESSEE, SUBMITTED THAT THE CONCERN FROM WH ICH LOAN WAS TAKEN IS A COMPANY IN WHICH ASSESSEE IS A DIRECTOR AND SHAREHO LDER. HE SUBMITTED THAT THE OTHER SHAREHOLDER IN THE COMPANY IS THE ASSESSEE'S WIFE. HE FURTHER, CLAIMED THAT ON DIFFERENT OCCASIONS TO MEET URGENT BUSINESS NEED S ASSESSEE TOOK CASH LOANS. LEARNED COUNSEL SUBMITTED THAT ASSESSEE WAS UNDER A BONA FIDE BELIEF THAT SUCH LOANS DO NOT ATTRACT THE RIGOURS OF PROVISIONS OF S ECTION 269SS. 5. PER CONTRA, LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 6. UPON CAREFUL CONSIDERATION WE FIND THAT ASSESSEE HAS TAKEN CASH LOAN IN SMALL AMOUNTS ON DIFFERENT OCCASIONS TO MEET THE URGENT B USINESS NEEDS. THE AMOUNT HAS BEEN TAKEN FROM THE COMPANY IN WHICH ASSESSEE IS A DIRECTOR AND SHAREHOLDER. IN THESE CIRCUMSTANCES SECTION 273B COMES TO THE RESCU E OF THE ASSESSEE. THE SAID SECTION PROVIDES THAT THE IMPUGNED PENALTY NEED NOT BE LEVIED IF THERE WAS REASONABLE CAUSE FOR THE TRANSGRESSION BY THE ASSES SEE. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, IN OUR CONSIDERED OPINIO N, THE REASONABLE CAUSE GIVEN BY THE ASSESSEE FOR TAKING THE SAID CASH LOAN DULY MAN DATE THAT LEVY OF PENALTY UNDER SECTION 271D IS NOT WARRANTED. IN THIS REGARD, W E ALSO PLACE RELIANCE UPON THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF HI NDUSTAN STEEL VS. STATE OF ORISSA 83 ITR 26 THAT PENALTY FOR TECHNICAL AND VENIAL BRE ACH MAY NOT BE LEVIED. ACCORDINGLY WE DELETE THE LEVY OF PENALTY IN THIS C ASE. ITA NO.1406//MUM/2017 AKBAR MOHAMEDALI KAZI 3 7. IN THE RESULT THIS APPEAL BY THE ASSESSEE STANDS ALLOWED ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 7 TH MARCH, 2019. SD/- SD/- (RAM LAL NEGI) (SHAMIM YAHYA) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED : 7 TH MARCH, 2019. SA COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE C I T(A), 4. THE C I T 5. THE DR, A BENCH BY ORDER //TRUE COPY// (ASSISTANT REGISTRAR/ SR. PS) INCOME TAX APPELLATE TRIBUNAL, MUMBAI