M/s. Marathon Finlease Ltd., Delhi V. Addl. CIT, New Delhi

ITA 1437/DEL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 4086 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-01-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 16-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVIKANT GUPTA
• Keywords: Reasonable cause
• Section: 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI A BENCH, NEW DELHI BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER, AND SHRI KULDIP SINGH , JUDICIAL MEMBER ITA NO. 143 7 /DEL/201 6 [ASSESSMENT YEAR: 20 1 0 - 11 ] MARATHON FINLEASE LTD VS. THE ADDL .C.I.T 304, LAXMAN PALACE, 19, RANGE - 6 VEER SAVARKAR BLOCK, DELHI MADHUBAN ROAD SHAKARPUR, DELHI PAN : A AACM 5536 C [APPELLANT] [RESPONDENT] DATE OF HEARING : 0 2 . 0 1 .201 8 DATE OF PRONOUNCEMENT : 22 . 01 .201 8 ASSESSEE BY : NONE REVENUE BY : S HRI RAVI KANT GUPTA, SR. DR ORDER PER B.P. JAIN, ACCOUNTANT MEMBER, THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 08 . 12 .201 5 OF COMMISSI ONER OF INCOME TAX (APPEALS) - 19 , NEW DELHI AND RELATES TO ASSESSMENT YEAR 2010 - 11 . 2 2. THE F OLLOWING GROUNDS OF APPEAL HAVE BEEN RAISED BY THE ASSESSEE : 1 ) WHETHER THE LD. CIT (A) WAS JUSTIFIED BY HOLDING THAT THE LD. ADDITIONAL CIT RANGE 6 HAS RIGHTLY ASSUMING JURISDICTION AS A RESULT PENALTY U/S 271 E WAS INITIATED AND THERE WAS NO NEED FOR DIRECTION TO THE EFFECT BY THE A.O. DURING THE ASSESSMENT PROCEEDING. 2) WHETHER THE LD. CIT (A) WAS JUSTIFIED BY HOLDING THAT PROPER OPPORTUNITY WAS GIVEN BY THE ADDITIONAL CIT BEFORE IMPOSING THE PENALTY U/S 271 E. 3) WHETHER THE LD. CIT (A) WAS JUSTIFIED THAT EVEN IF THERE IS NO DISPUTE ON THE GENUINENESS OF THE TRANSACTION DURING THE ASSESSMENT PROCEEDING BY WHICH THE ENTIRE EXPLANATION WAS ACCEPTED EVEN THOUGH THE PENALTY ORDER IS JUSTIFIED. 4) WHETHER THE LD. CIT(A) WAS JUSTIFIED THAT ACCEPTANCE OF GENUINENESS AND REASONABLE CAUSE DURING THE ASSESSMENT PROCEEDING IS NOT A BAR FOR THE PENALTY PROCEEDI NG 3. NONE APPEARED ON BEHALF OF THE ASSESSEE. SO WE HEARD THE LD. DR AND PERUSED THE RELEVANT MATERIAL ON RECORD. 3 4. BRIEF RELEVANT FACTS OF THE CASE EMANATING FROM THE PENALTY ORDER ARE THAT D URING THE YEAR, THE ASSESSEE HAD REPAID UNSECURED LOAN TO THE PARTIES. REQUISITE DETAILS ALONG WITH CONFIRMATIONS FROM THE PARTIES REGARDING UNSECURED LOAN WERE FURN ISHED AND THE SAME WERE EXAMINED. ON VERIFICATION IT WAS FOUND THA T THE FOLLOWING PARTIES WERE REPAID THE UNSECURED LOAN IN CASH: SL. NO. NAME OF THE PART IES AMOUNT IN RS. 1. M/S TRUE MAN AUTO PVT. LTD 2,14,866/ - 2. SHRI M.M. SHARMA 48,000/ - 3. SHRI V.P. SINGH RS. 62,000/ - TOTAL 3,24,866/ - IN VIEW OF THE ABOVE, THE ASSESSEE COMPANY HAD RE - PAID THE AFORESAID AMOUNT OF UNSECURED LOAN OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT. SINCE, THE ASSESSEE COMPANY HAS REPAID THE UNSECURED LOAN IN C ONTRAVENTION OF SECTION 269T, THE AO OBSERVED THAT THE PROVISIONS OF SECT ION 27 IE WILL ATTRACT IN THIS CASE. 5 . THE ASSESSING OFF ICER FURTHER OBSERVED THAT THE ASSESSEE HAS REPAID UNSECURED LOANS OF RS. 3,24,866/ - TO THREE PERSONS IN VIOLATION OF SECTION 269T OF THE ACT FOR WHICH THE ASSESSEE DID NOT SUBMIT ANY REASONABLE CAUSE AND ACCORDINGLY, THE ASSESSING OFFICER LEVIED PENALTY 4 U /S 271E OF THE ACT AMOUNTING TO RS. 3,24,866/ - . THE LD. CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. 6 . WE HAVE HEARD THE ARGUMENTS OF THE LD. DR, PERUSED THE ORDERS OF THE A.O AND THE LD. CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSE E. IT WAS SUBMITTED BY THE ASSESSEE BEFORE THE AUTHORITIES BELOW THAT NO ADDITIONS HAVE BEEN MADE BY THE ASSESSING OFFICER WITH REGARD TO PETTY LOANS TAKEN FROM FRIENDS AND RELATIVES AND THERE IS NO C A SE OF THE ASSESSING OFFICER THAT THE ASSESSEE HAD ANY U NDISCLOSED INCOME. IT IS A MATTER OF FACT THAT THE ASSESSEE DOES NOT HA V E ANY UNDISCLOSED INCOME AND IN VIEW OF THE DECISION OF THE HON'BLE DELHI HIGH COURT IN THE CASE OF DIWAN ENTERPRISES VS. CIT REPORTED IN 246 ITR 571 [DEL] WHERE THE ASSESSING OFFICER LEVIED PENALTY U/S 271E OF THE ACT ON UNEXPLAINED AMOUNT HAVING BEEN RECEIVED IN CASH IN VIOLATION OF PROVISIONS OF SECTION 266(SS) OF THE ACT , T HE HON'BLE COURT HELD TH A T THE SAID AMOUNT IS NOT AN INCOME OF THE ASSESSEE AND THEREFORE, NO PENALTY CAN BE L EVIED. IN THE CASE OF CIT VS. SMT. YASHODA R EPORT E D IN [2013] 351 ITR 265 [MAD], THE HON'BLE MADRAS HIGH C OURT HAS HELD THAT THER E WAS SUDDEN NEED OF MONEY WHICH RESULTED IN FINANCIAL LOSS OF THE ASSESSEE AND THERE IS REASONABLE CAUSE FOR VIOLATION OF PRO VISIONS OF SECTION 269SS OF THE ACT. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, 5 SINCE THE CASE OF THE ASSESSING OFFICER HAS NOT MADE OUT A CASE THAT THE ASSESSEE HAS UNDISCLOSED INCOME AND IN VIEW OF THE DECISION OF THE HON'BLE COURTS MENTIONED HEREINABO VE, THE ASSESSING OFFICER IS NOT JUSTIFIED IN LEVYING PENALTY AND ACCORDINGLY, THE PENALTY SO LEVIED IS DIRECTED TO BE DELETED. GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 7 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO. 1437 /DEL/201 6 IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 2 2 . 01.2018 . SD/ - SD/ - [ KULDIP SINGH ] [B.P. JAIN] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 2 N D JANUARY, 2018 VL/ COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI