ACIT 1(2)(2), MUMBAI V. VINOD KUMAR ANAND, MUMBAI

ITA 1433/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 8799 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-11-2017
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2003-2004
• Appeal Filed On: 15-03-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: TRIKALAGYA TIWARI
• Keywords: Period of limitation; Question of law; Initiation of penalty proceedings; Reasonable cause
• Section: 260A

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, C MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.1433/MUM/2016 ASSESSMENT YEAR: 2003-04 ACIT-1(2)(2), R. NO.535, 5 TH FLOOR, AAYAKAR BHAVAN, M. K. ROAD, MUMBAI-400020 / VS. SHRI VINOD KUMAR ANAND, 1, MISTRY COURT, 208, DINSHAW VACHA ROAD, MUMBAI-400020 ( / REVENUE) ( !' # /ASSESSEE) PAN. NO. AAAPA9763A $ % # & / DATE OF HEARING : 01/11/2017 % # & / DATE OF ORDER: 01/11/2017 ! / REVENUE BY SHRI RAJAT MITTAL-DR !' # ! / ASSESSEE BY SHRI TRIKALAGYA TIWARI ITA NO. 1433/MUM/2016 VINOD KUMAR ANAND 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS IN APPEAL, CHALLENGING THE IMPUGNED ORDER DATED 10/12/2015 OF THE LD. FIRST APPELLATE A UTHORITY, MUMBAI, CANCELLING THE PENALTY LEVIED U/S 271D OF T HE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) WITHOUT APPREC IATING THE FACT THAT THE ASSESSEE OBTAINED LOAN OF RS.30 LAKH IN CASH IN CONTRAVENTION OF SECTION 269 SS OF THE ACT FOR WHIC H NO EXPLANATION/REASONABLE CAUSE WAS ADDUCED, THEREFORE , THE PENALTY WAS RIGHTLY LEVIED. 2. DURING HEARING, SHRI RAJAT MITTAL, LD. COUNSEL FOR THE ASSESSEE, CLAIMED THAT THE IMPUGNED ISSUE IS SQ UARELY COVERED BY THE DECISION OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS WORLD WIDE TOWNSHIP PROJECT LTD. (IT A NO.232 OF 2014) ORDER DATED 21/05/2014, THE HON'BLE RAJAST HAN HIGH COURT IN 291 ITR 244 (RAJ.), WHICH WAS AFFIRMED BY HON'BLE APEX COURT IN CIT VS HISARIA BROTHERS (CIVIL APPEAL NO.5254 OF 2008), ORDER DATED 22/08/2015. THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY THE LD. COUNSEL FOR THE ASSESSEE TH OUGH HE DEFENDED THE IMPUGNED ORDER. ITA NO. 1433/MUM/2016 VINOD KUMAR ANAND 3 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW O F THE ABOVE, WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION F ROM THE ORDER DATED 21/05/2014 FROM HON'BLE DELHI HIGH COUR T IN THE CASE OF CIT VS WORLD WIDE TOWNSHIP PROJECTS LTD. (I TA 232/2014) FOR READY REFERENCE:- 1. THIS IS AN APPEAL FILED BY THE REVENUE UNDER SE CTION 260A OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS T HE ACT). THE APPELLANT IMPUGNS THE ORDER DATED 31.10.2013 PASSED BY THE IN COME TAX APPELLATE TRIBUNAL (ITAT), WHEREBY THE ITAT HAD HELD THAT THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 271D OF THE ACT WAS UNSUSTAINABLE, AS IT WAS PASSED BEYOND THE PERIOD O F SIX MONTHS AS PRESCRIBED UNDER SECTION 275(1)(C) OF THE ACT. 2. THE LEARNED COUNSEL FOR THE REVENUE CONTENDS THA T THE ITAT ERRED IN HOLDING THAT SECTION 275(1)(C) OF THE ACT WAS APPLI CABLE IN THE PRESENT CASE. ACCORDING TO THE REVENUE, SECTION 275(1)(A) O F THE ACT WOULD BE APPLICABLE IN RESPECT OF THE PENALTY IMPOSED IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND NOT SECTION 275(1)(C) OF THE ACT. 3. BRIEFLY STATED THE FACTS ARE:- 3.1 THAT THE RESPONDENT/ASSESSEE FILED ITS RETURN O F INCOME FOR THE ASSESSMENT YEAR 2007-08 ON 30.10.2007. THE RETURN W AS TAKEN UP FOR SCRUTINY AND THE ASSESSING OFFICER FOUND THAT DURIN G THE YEAR IN QUESTION, THE ASSESSEE HAD SHOWN PURCHASES OF LAND WORTH RS.1 4.22 CRORES WHICH WAS REFLECTED AS CLOSING STOCK IN TRADE. THE ASSESS EE HAD ALSO REFLECTED A SUM OF RS.14,25,74,302/- AS SUNDRY CREDITORS. THE A SSESSEE EXPLAINED THAT THE SUNDRY CREDITOR REFLECTED IN ITS BOOKS WAS M/S PACL INDIA LTD., WHICH HAD PURCHASED LANDS ON BEHALF OF ASSESSEE FRO M SEVERAL LAND OWNERS. M/S PACL INDIA LTD. HAD MADE PAYMENTS THROU GH DEMAND DRAFTS TO VARIOUS LAND OWNERS FROM WHOM THE LAND WAS ACQUI RED ON BEHALF OF THE ASSESSEE. THE ASSESSING OFFICER CONCLUDED, THAT THE TRANSACTION AS DISCLOSED BY THE ASSESSEE AMOUNTED TO M/S PACL INDI A LTD. EXTENDING A LOAN TO THE ASSESSEE. THE ASSESSING OFFICER FURTHER CONCLUDED THAT THE SAID TRANSACTION FELL FOUL OF THE PROVISIONS OF SECTION 269SS/269T OF THE ACT, WHICH PROSCRIBED ANY PERSON FROM ACCEPTING ANY LOAN OR DEPOSIT EXCEEDING RS.20,000/- OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE. SINCE NO FUNDS HAD PASSED THROUGH THE BANK ACCOUNTS OF TH E ASSESSEE FOR ACQUISITION OF THE LANDS OR THE ALLEGED LOAN EXTEND ED BY M/S PACL INDIA LTD, THE ASSESSING OFFICER CONCLUDED THAT PENALTY P ROCEEDINGS UNDER SECTION 271D OF THE ACT WERE LIABLE TO BE INITIATED . ALTHOUGH, THE ASSESSING OFFICER, BY ITS ASSESSMENT ORDER DATED 30 .12.2009, ACCEPTED THE ITA NO. 1433/MUM/2016 VINOD KUMAR ANAND 4 INCOME AS RETURNED BY THE ASSESSEE HE ISSUED DIRECT IONS FOR INITIATING PENALTY PROCEEDINGS UNDER SECTION 271D OF THE ACT F OR ALLEGED VIOLATION OF THE PROVISIONS OF SECTION 269SS/269T OF THE ACT. 3.2 THE ASSESSMENT ORDER DATED 30.12.2009 WAS CARRI ED IN APPEAL BY THE ASSESSEE, INTER ALIA, ON THE GROUND THAT THE CONCLU SION OF THE ASSESSING OFFICER, THAT THE ASSESSEE HAD INFRINGED THE PROVIS IONS OF SECTION 269SS/269T OF THE ACT WAS ERRONEOUS, AS NO CASH PAY MENTS HAD BEEN MADE OR RECEIVED BY THE APPELLANT. THE ASSESSEE ALS O CHALLENGED INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) AND 271D OF THE ACT. THE CIT (APPEALS) REJECTED THE APPEAL FILED BY THE ASSE SSEE BY AN ORDER DATED 23.02.2012, WHEREBY IT HELD THAT SINCE NO PENALTY H AD BEEN LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271(1)(C) OR 271D O F THE ACT, THE APPEAL FILED BY THE ASSESSEE WAS PRE-MATURE AND COULD NOT BE ADJUDICATED. 3.3 THEREAFTER, THE ASSESSING OFFICER PASSED A PENA LTY ORDER DATED 10.03.2012 UNDER SECTION 271D OF THE ACT WHEREBY TH E ASSESSING OFFICER HELD THAT THE ASSESSEE HAD VIOLATED THE PROVISIONS OF SECTION 269SS OF THE ACT AS SUMS AGGREGATING RS.14,25,74,302/- WERE TRAN SFERRED TO THE LOAN ACCOUNT IN THE FORM OF BOOK ENTRIES, OTHERWISE THAN THROUGH AN ACCOUNT PAYEE CHEQUE OR A ACCOUNT PAYEE DRAFT. THIS ACCORDI NG TO THE ASSESSING OFFICER CONTRAVENED THE PROVISIONS OF SECTION 269SS OF THE ACT AND, ACCORDINGLY, A PENALTY OF RS.14,25,74,302/- WAS IMP OSED. 3.4 THIS ORDER WAS ALSO CARRIED IN APPEAL BEFORE TH E CIT (APPEALS). THE ASSESSEE IMPUGNED THE PENALTY ORDER ON THE GROUNDS THAT IT WAS BARRED BY LIMITATION AS WELL AS ON MERITS. THE CIT (APPEALS) REJECTED THE CONTENTIONS OF THE ASSESSEE THAT PENALTY ORDER WAS BEYOND THE PRESCRIBED PERIOD OF LIMITATION AND HELD THAT THE ORDER FELL W ITHIN THE PURVIEW OF SECTION 271(1)(A) AND NOT SECTION 275(1)(C) OF THE ACT. HOWEVER, ON MERITS THE CIT (APPEALS) REFERRED TO THE DECISION O F THIS COURT IN CIT V. NOIDA TOLL BRIDGE CO. LTD.: 262 ITR 260 AND NEGATED THE FINDING OF THE ASSESSING OFFICER THAT SECTION 269SS OF THE ACT WAS VIOLATED IN THE GIVEN CIRCUMSTANCES OF THE CASE. 3.5 THE AFOREMENTIONED ORDER OF CIT (APPEALS) DATED 28.01.2013 WAS CHALLENGED BY BOTH THE REVENUE AS WELL AS THE ASSES SEE. WHILST THE ASSESSEE WAS AGGRIEVED WITH THE CONCLUSION OF CIT ( APPEALS) THAT THE PENALTY ORDER WAS WITHIN TIME, THE REVENUE WAS AGGR IEVED BY THE FINDING THAT PROVISIONS OF SECTION 269SS OF THE ACT WERE NO T VIOLATED. THE ITAT ACCEPTED THE CONTENTION OF THE ASSESSEE THAT PENALT Y ORDER UNDER SECTION 271D OF THE ACT WAS BARRED BY TIME AS THE PROVISION S OF SECTION 271(1)(C) OF THE ACT WERE APPLICABLE IN THE GIVEN FACTS OF TH E CASE. IN VIEW OF THIS FINDING, THE ITAT CONCLUDED THAT THE APPEAL PREFERR ED BY THE REVENUE HAS BECOME INFRUCTUOUS. 4. THE LEARNED COUNSEL FOR THE REVENUE HAS CONTENDE D THAT THE ASSESSMENT ORDER FOR THE ASSESSMENT YEAR 2007-08 WAS PASSED ON 30.12.2009. THE ASSESSEES APPEAL, IMPUGNING THIS ORDER BEFORE CIT (APPEALS), WAS REJECTED ON 23.02.2012. ACCORDING TO THE REVENUE, A N ORDER IMPOSING PENALTY UNDER SECTION 271D OF THE ACT COULD BE PASS ED TILL 31.03.2013 (I.E. ONE YEAR AFTER THE END OF THE FINANCIAL YEAR 2011-12 DURING WHICH THE APPEAL ORDER WAS PASSED). IT WAS SUBMITTED THAT SIN CE THE PENALTY ORDER ITA NO. 1433/MUM/2016 VINOD KUMAR ANAND 5 UNDER SECTION 271D OF THE ACT WAS PASSED ON 10.03.2 012, THE SAME WAS WITHIN THE PERIOD PRESCRIBED UNDER SECTION 275(1)(A ) OF THE ACT. THE SAID CONTENTION IS PERMITTED ON THE BASIS THAT PROVISION S OF SECTION 275(1)(A) OF THE ACT ARE APPLICABLE. THIS WAS DISPUTED BY THE ASSESSEE. IT IS THE ASSESSEES CASE THAT IN THE GIVEN FACTS AND CIRCUMS TANCES, SECTION 275(1)(C) OF THE ACT IS APPLICABLE WHICH PROVIDES T HAT THE PENALTY ORDER HAS TO BE PASSED IN THE FINANCIAL YEAR IN WHICH THE PROCEEDINGS FOR IMPOSING THE PENALTY ARE INITIATED OR WITHIN SIX MO NTHS OF INITIATION OF SUCH PROCEEDINGS, WHICHEVER IS LATER. INITIATION OF PROCEEDINGS WAS REFERRED TO IN THE ASSESSMENT ORDER DATED 30.12.200 9. THUS, THE TIME PERIOD FOR IMPOSING PENALTY EXPIRED ON 31.03.2010. THE PENALTY ORDER REFERS TO A SHOW CAUSE NOTICE DATED 07.03.2011. THE RE IS SOME CONTROVERSY WHETHER THIS SHOW CAUSE NOTICE WAS IN F ACT, ISSUED. HOWEVER, WITHOUT GOING INTO THIS CONTROVERSY, IT IS APPARENT THAT IF SECTION 275(1)(C) OF THE ACT IS APPLICABLE THEN IN ANY VIEW THE PERIO D FOR PASSING THE PENALTY ORDER WOULD EXPIRE WITHIN SIX MONTHS OF THE SAID DATE. 5. CONCEDEDLY, IF SECTION 275(1)(C) OF THE ACT IS A PPLICABLE, THE PENALTY ORDER IS BEYOND THE PRESCRIBED PERIOD. IN THE PRESE NT CASE, THE PENALTY SOUGHT TO BE IMPOSED ON THE ASSESSEE IS FOR ALLEGED VIOLATION OF SECTION 269SS OF THE ACT. IT IS WELL SETTLED THAT A PENALTY UNDER THIS PROVISION IS INDEPENDENT OF THE ASSESSMENT. THE ACTION INVITING IMPOSITION OF PENALTY IS GRANTING OF LOANS ABOVE THE PRESCRIBED LIMIT OTH ERWISE THAN THROUGH BANKING CHANNELS AND AS SUCH INFRINGEMENT OF SECTIO N 269SS OF THE ACT IS NOT RELATED TO THE INCOME THAT MAY BE ASSESSED OR F INALLY ADJUDICATED. IN THIS VIEW SECTION 275(1)(A) OF THE ACT WOULD NOT BE APPLICABLE AND THE PROVISIONS OF SECTION 275(1)(C) WOULD BE ATTRACTED. THE RAJASTHAN HIGH COURT IN THE CASE OF COMMISSIONER OF INCOME-TAX V. HISSARIA BROS.: (2007) 291 ITR 244 (RAJ.) AFTER EXAMINING A CASE WH ICH WAS FACTUALLY SIMILAR TO THE PRESENT ONE, EXPRESSED SIMILAR VIEW AND HELD AS UNDER:- THE EXPRESSION OTHER RELEVANT THING USED IN SECTIO N 275(1)(A) AND CLAUSE (B) OF SUB-SECTION (1) OF SECTION 275 IS SIGNIFICAN TLY MISSING FROM CLAUSE (C) OF SECTION 275(1) TO MAKE OUT THIS DISTINCTION VERY CLEAR. WE ARE, THEREFORE, OF THE OPINION THAT SINCE PENALT Y PROCEEDINGS FOR DEFAULT IN NOT HAVING TRANSACTIONS THROUGH THE BANK AS REQUIRED UNDER SECTIONS 269SS AND 269T ARE NOT RELATED TO THE ASSE SSMENT PROCEEDING BUT ARE INDEPENDENT OF IT, THEREFORE, THE COMPLETION OF APPELLATE PROCEEDINGS ARISING OUT OF THE ASSESSMENT PROCEEDINGS OR THE OT HER PROCEEDINGS DURING WHICH THE PENALTY PROCEEDINGS UNDER SECTIONS 271D A ND 271E MAY HAVE BEEN INITIATED HAS NO RELEVANCE FOR SUSTAINING OR N OT SUSTAINING THE PENALTY PROCEEDINGS AND, THEREFORE, CLAUSE (A) OF SUB-SECTI ON (1) OF SECTION 275 CANNOT BE ATTRACTED TO SUCH PROCEEDINGS. IF THAT WE RE NOT SO CLAUSE (C) OF SECTION 275(1) WOULD BE REDUNDANT BECAUSE OTHERWISE AS A MATTER OF FACT EVERY PENALTY PROCEEDING IS USUALLY INITIATED WHEN DURING SOME PROCEEDINGS SUCH DEFAULT IS NOTICED, THOUGH THE FIN AL FACT FINDING IN THIS PROCEEDING MAY NOT HAVE ANY BEARING ON THE ISSUES R ELATING TO ESTABLISHING DEFAULT E.G. PENALTY FOR NOT DEDUCTING TAX AT SOURCE WHILE MAKING PAYMENT TO EMPLOYEES, OR CONTRACTOR, OR FOR THAT MATTER NOT MAKING PAYMENT THROUGH CHEQUE OR DEMAND DRAFT WHERE IT IS SO REQUIRED TO BE MADE. EITHER OF THE CONTINGENCIES DOES NOT AF FECT THE COMPUTATION OF ITA NO. 1433/MUM/2016 VINOD KUMAR ANAND 6 TAXABLE INCOME AND LEVY OF CORRECT TAX ON CHARGEABL E INCOME; IF CLAUSE (A) WAS TO BE INVOKED, NO NECESSITY OF CLAUSE (C) WOULD ARISE. 6. THE ITAT, FOLLOWING THE AFORESAID DECISION ALLOW ED THE APPEAL PREFERRED BY THE ASSESSEE. WE DO NOT FIND ANY INFIR MITY WITH THIS VIEW. 7. MORE IMPORTANTLY, WE ARE UNABLE TO APPRECIATE AS TO HOW IN THE GIVEN CIRCUMSTANCE OF THE CASE AN OFFENCE UNDER SECTION 2 69SS OF THE ACT IS MADE OUT. AT THIS STAGE, WE MAY REFER TO SECTION 26 9SS OF THE ACT. THE RELEVANT EXTRACT OF THE SAME READS AS UNDER:- 269SS. MODE OF TAKING OR ACCEPTING CERTAIN LOANS A ND DEPOSITS NO PERSON SHALL, AFTER THE 30TH DAY OF JUNE, 1984, TAKE OR ACCEPT FROM ANY OTHER PERSON (HEREAFTER IN THIS SECTION REFERRED TO AS THE DEPOSITOR), ANY LOAN OR DEPOSIT OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT IF, (A) THE AMOUNT OF SUCH LOAN OR DEPOSIT OR THE AGGRE GATE AMOUNT OF SUCH LOAN AND DEPOSIT; OR (B) ON THE DATE OF TAKING OR ACCEPTING SUCH LOAN O R DEPOSIT, ANY LOAN OR DEPOSIT TAKEN OR ACCEPTED EARLIER BY SUCH PERSON FR OM THE DEPOSITOR IS REMAINING UNPAID (WHETHER REPAYMENT HAS FALLEN DUE OR NOT), THE AMOUNT OR THE AGGREGATE AMOUNT REMAINING UNPAID; OR (C) THE AMOUNT OR THE AGGREGATE AMOUNT REFERRED TO IN CLAUSE (A) TOGETHER WITH THE AMOUNT OR THE AGGREGATE AMOUNT REFERRED TO IN CLAUSE (B), IS TWENTY THOUSAND RUPEES OR MORE: PROVIDED THAT THE PROVISIONS OF THIS SECTION SHALL NOT APPLY TO ANY LOAN OR DEPOSIT TAKEN OR ACCEPTED FROM, OR ANY LOAN OR DEPO SIT TAKEN OR ACCEPTED BY, (A) GOVERNMENT; (B) ANY BANKING COMPANY, POST OFFICE SAVINGS BANK O R COOPERATIVE BANK; (C) ANY CORPORATION ESTABLISHED BY A CENTRAL, STATE OR PROVINCIAL ACT; (D) ANY GOVERNMENT COMPANY AS DEFINED IN SECTION 61 7 OF THE COMPANIES ACT, 1956 (1 OF 1956); (E) SUCH OTHER INSTITUTION, ASSOCIATION OR BODY OR CLASS OF INSTITUTIONS, ASSOCIATIONS OR BODIES WHICH THE CENTRAL GOVERNMENT MAY, FOR REASONS TO BE RECORDED IN WRITING NOTIFY IN THIS BEHALF IN THE OFFICIAL GAZETTE: PROVIDED FURTHER THAT THE PROVISIONS OF THIS SECTIO N SHALL NOT APPLY TO ANY LOAN OR DEPOSIT WHERE THE PERSON FROM WHOM THE LOAN OR DEPOSIT IS TAKEN OR ACCEPTED AND THE PERSON BY WHOM THE LOAN OR DEPO SIT IS TAKEN OR ACCEPTED ARE BOTH HAVING AGRICULTURAL INCOME AND NE ITHER OF THEM HAS ANY INCOME CHARGEABLE TO TAX UNDER THIS ACT. EXPLANATION.FOR THE PURPOSES OF THIS SECTION, (I) BANKING COMPANY MEANS A COMPANY TO WHICH THE BANKING REGULATION ACT, 1949 (10 OF 1949), APPLIES AND INCL UDES ANY BANK OR BANKING INSTITUTION REFERRED TO IN SECTION 51 OF TH AT ACT; ITA NO. 1433/MUM/2016 VINOD KUMAR ANAND 7 (II) CO-OPERATIVE BANK SHALL HAVE THE MEANING ASS IGNED TO IT IN PART V OF THE BANKING REGULATION ACT, 1949 (10 OF 1949); (III) LOAN OR DEPOSIT MEANS LOAN OR DEPOSIT OF MO NEY. 8. A PLAIN READING OF THE AFORESAID SECTION INDICAT ES THAT (THE IMPORT OF THE ABOVE PROVISION IS LIMITED) IT APPLIES TO A TRA NSACTION WHERE A DEPOSIT OR A LOAN IS ACCEPTED BY AN ASSESSEE, OTHERWISE THA N BY AN ACCOUNT PAYEE CHEQUE OR AN ACCOUNT PAYEE DRAFT. THE AMBIT OF THE SECTION IS CLEARLY RESTRICTED TO TRANSACTION INVOLVING ACCEPTANCE OF M ONEY AND NOT INTENDED TO AFFECT CASES WHERE A DEBT OR A LIABILITY ARISES ON ACCOUNT OF BOOK ENTRIES. THE OBJECT OF THE SECTION IS TO PREVENT TR ANSACTIONS IN CURRENCY. THIS IS ALSO CLEARLY EXPLICIT FROM CLAUSE (III) OF THE EXPLANATION TO SECTION 269SS OF THE ACT WHICH DEFINES LOAN OR DEPOSIT TO M EAN LOAN OR DEPOSIT OF MONEY. THE LIABILITY RECORDED IN THE BOOKS OF A CCOUNTS BY WAY OF JOURNAL ENTRIES, I.E. CREDITING THE ACCOUNT OF A PA RTY TO WHOM MONIES ARE PAYABLE OR DEBITING THE ACCOUNT OF A PARTY FROM WHO M MONIES ARE RECEIVABLE IN THE BOOKS OF ACCOUNTS, IS CLEARLY OUT SIDE THE AMBIT OF THE PROVISION OF SECTION 269SS OF THE ACT, BECAUSE PASS ING SUCH ENTRIES DOES NOT INVOLVE ACCEPTANCE OF ANY LOAN OR DEPOSIT OF MO NEY. IN THE PRESENT CASE, ADMITTEDLY NO MONEY WAS TRANSACTED OTHER THAN THROUGH BANKING CHANNELS. M/S PACL INDIA LTD. MADE CERTAIN PAYMENTS THROUGH BANKING CHANNELS TO LAND OWNERS. THIS PAYMENT MADE ON BEHAL F OF THE ASSESSEE WAS RECORDED BY THE ASSESSEE IN ITS BOOKS BY CREDIT ING THE ACCOUNT OF M/S PACL INDIA LTD. IN VIEW OF THIS ADMITTED POSITION, NO INFRINGEMENT OF SECTION 269SS OF THE ACT IS MADE OUT. THIS COURT, I N THE CASE OF NOIDA TOLL BRIDGE CO. LTD. (SUPRA), CONSIDERED A SIMILAR CASE WHERE A COMPANY HAD PAID MONEY TO THE GOVERNMENT OF DELHI FOR ACQUI SITION OF A LAND ON BEHALF OF THE ASSESSEE THEREIN. THE ASSESSING OFFIC ER LEVIED A PENALTY UNDER SECTION 271D OF THE ACT FOR ALLEGED VIOLATION OF THE PROVISIONS OF SECTION 269SS OF THE ACT SINCE THE BOOKS OF THE ASS ESSEE REFLECTED THE LIABILITY ON ACCOUNT OF THE LANDS ACQUIRED ON ITS B EHALF. ON APPEAL, THE CIT (APPEALS) AFFIRMED THE PENALTY. THE ORDER OF THE CI T WAS SUCCESSFULLY IMPUGNED BY THE ASSESSEE BEFORE THE ITAT. ON APPEAL , THIS COURT HELD AS UNDER:- WHILE HOLDING THAT THE PROVISIONS OF SECTION 269SS OF THE ACT WERE NOT ATTRACTED, THE TRIBUNAL HAS NOTICED THAT: (I) IN TH E INSTANT CASE, THE TRANSACTION WAS BY AN ACCOUNT PAYEE CHEQUE, (II) NO PAYMENT ON ACCOUNT WAS MADE IN CASH EITHER BY THE ASSESSED OR ON ITS B EHALF, (III) NO LOAN WAS ACCEPTED BY THE ASSESSEE IN CASH, AND (IV) THE PAYM ENT OF RS. 4.85 CRORES MADE BY THE ASSESSEE THROUGH IL & FS, WHICH HOLDS M ORE THAN 30 PER CENT. OF THE PAID-UP CAPITAL OF THE ASSESSEE, BY JO URNAL ENTRY IN THE BOOKS OF ACCOUNT OF THE ASSESSED BY CREDITING THE ACCOUNT OF IL & FS. HAVING REGARD TO THE AFORENOTED FINDINGS, WHICH ARE ESSENTIALLY FINDINGS OF FACT, WE ARE IN COMPLETE AGREEMENT WITH THE TRIB UNAL THAT THE PROVISIONS OF SECTION 269SS WERE NOT ATTRACTED ON T HE FACTS OF THE CASE. ADMITTEDLY, NEITHER THE ASSESSEE NOR IL & FS HAD MA DE ANY PAYMENT IN CASH. THE ORDER OF THE TRIBUNAL DOES NOT GIVE RISE TO ANY QUESTION OF LAW, MUCH LESS A SUBSTANTIAL QUESTION OF LAW. WE ACCORDINGLY DECLINE TO ENTERTAIN THE APPEAL. DIS MISSED. ITA NO. 1433/MUM/2016 VINOD KUMAR ANAND 8 9. IN OUR VIEW, THE PRESENT APPEAL IS BEREFT OF ANY MERIT AND IS, ACCORDINGLY, DISMISSED. 2.2. IT IS NOTED THAT IN THE AFORESAID ORDER WITH RESPECT TO PENALTY U/S 271D HAS BEEN DEALT WITH, CONSIDERING T HE DECISION FROM HON'BLE RAJASTHAN HIGH COURT IN THE C ASE OF CIT VS HISARIA BROTHERS (2007) 291 ITR 244 (RAJ.), WHIC H WAS AFFIRMED BY HON'BLE APEX COURT IN CIVIL APPEAL NO.5 254 OF 2008 ORDER DATED 22/08/2016. NO CONTRARY FACTS WERE BROUGHT TO OUR NOTICE. IN THE PRESENT APPEAL ALSO, DURING S URVEY, U/S 133A, CARRIED OUT ON 05/03/2009, AT THE BUSINESS PR EMISES OF THE ASSESSEE WERE IMPOUNDED. FROM THE DOCUMENTS, I T WAS FOUND THAT THE ASSESSEE HAS TAKEN CASH LOAN OF RS.3 0 LAKH IN SEPTEMBER 2002, IN CONTRAVENTION OF SECTION 269SS O F THE ACT. SHOW CAUSE NOTICE WAS ISSUED TO THE ASSESSEE TO WHI CH, IT WAS CLAIMED THAT NO PROCEEDINGS FOR ASSESSMENT YEAR 200 3-04 ARE PENDING, THEREFORE, PENAL PROCEEDINGS, CANNOT BE IN ITIATED. THE ASSESSMENT PROCEEDINGS FOR ASSESSMENT YEAR 2003 -04 WERE COMPLETED U/S 143(1) OF THE ACT. THE HON'BLE RAJASTHAN HIGH COURT IN HISARIA BROTHERS HAS HELD THAT PENALT Y PROCEEDINGS U/S 271D OF THE ACT ARE NOT RELATED TO ASSESSMENT PROCEEDINGS AND PENALTY CAN BE INITIATED INDEPENDEN T OF ANY PROCEEDINGS. LIKEWISE HON'BLE DELHI HIGH COURT, CON SIDERING ITA NO. 1433/MUM/2016 VINOD KUMAR ANAND 9 RAJASTHAN HIGH COURT (WHICH WAS AFFIRMED BY HON'BLE APEX COURT) EXAMINED THE PROVISION OF SECTION 275(1)(C) AND SECTION 69SS OF THE ACT AND ALSO CONSIDERING THE CASE IN NO IDA TOLL BRIDGE CO. LTD. 262 ITR 260 HELD THAT THE LD. ASSES SING OFFICER LEVIED PENALTY U/S 271D FOR THE VIOLATION O F THE PROVISION OF SECTION 269SS OF THE ACT, THEREFORE, T HE APPEAL OF THE REVENUE WAS DISMISSED. RESPECTFULLY FOLLOWING T HE AFORESAID DECISIONS, WE REVERSE THE ORDER OF THE LD . COMMISSIONER OF INCOME TAX (APPEAL), RESULTANTLY TH E APPEAL OF THE REVENUE IS ALLOWED. FINALLY, THE APPEAL OF THE REVENUE IS ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF THE LD. REPRESENTATIVE FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 01/11/2017. SD/- SD/- ( RAJESH KUMAR ) (JOGINDER SINGH) '!# / ACCOUNTANT MEMBER $!# /JUDICIAL MEMBER $ MUMBAI; ( DATED : 01/11/2017 F{X~{T? P.S / /. .. %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. *+,- / THE APPELLANT (RESPECTIVE ASSESSEE) 2. ./,- / THE ASSESSEE. ITA NO. 1433/MUM/2016 VINOD KUMAR ANAND 10 3. 0 0 1# ( *+ ) / THE CIT, MUMBAI. 4. 0 0 1# / CIT(A)- , MUMBAI, 5. 34 .# , 0 *+& * 5 , $ / DR, ITAT, MUMBAI 6. 6! 7$ / GUARD FILE. ! / BY ORDER, /3+# .# //TRUE COPY// /! (DY./ASSTT. REGISTRAR) , $ / ITAT, MUMBAI