Ghanshyam Das Bihani, Kolkata V. JCIT, Range 34, Kolkata, Kolkata

ITA 1561/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1182 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Appeal Filed On: 01-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ARINDAM BHATTAHARJEE
• Assessee Lawyers: GOPAL AGARWAL
• Keywords: Search and seizure; Reasonable cause
• Section: 273B; 148

Judgement Text

1 ITA NO.1561/KOL/2016 GHANSHYAM DAS BIHARI, AY- 2011-12 , D , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: KOL KATA ( ) . . , . ' # $% % , '( ) [BEFORE SHRI A. T. VARKEY, JM & DR. A. L. SAINI, A M] I.T.A. NO. 1561/KOL/2016 ASSESSMENT YEAR: 2011-12 GHANSHYAM DAS BIHANI (PAN: AEAPB6118E) VS. JOINT COMMISSIONER OF INCOME-TAX RANGE-34, KOLKATA. APPELLANT RESPONDENT DATE OF HEARING 16.01.2018 DATE OF PRONOUNCEMENT 28.03.2018 FOR THE APPELLANT SHRI GOPAL AGARWAL, FCA FOR THE RESPONDENT SHRI ARINDAM BHATTAHARJEE, ADDL. CIT, DR ORDER PER SHRI A.T.VARKEY, JM THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT(A)-10, KOLKATA DATED 17.05.2016 CONFIRMING THE PENALTY PASSED U/S 271E OF THE INCOME TAX ACT, 1961 (ACT) FOR VIOLATION OF THE PROVISION OF SECTION 269 T OF THE ACT FOR A.Y.2011-12. 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE I S AN INDIVIDUAL CARRYING ON BUSINESS OF IRON AND STEEL. THE AO NOTES THAT A TAX EVASION PE TITION WAS RECEIVED BY THE DEPARTMENT AGAINST THE ASSESSEE DUE TO WHICH THE ASSESSMENT FO R THE RELEVANT ASSESSMENT YEAR WAS REOPENED. THE AO NOTED THAT ASSESSEE DID NOT FILE ANY RETURN BECAUSE HE DID NOT HAD ANY TAXABLE INCOME. HOWEVER, IN RESPECT TO THE NOTICE U/S. 148 OF THE ACT, ASSESSEE FILED E- RETURN OF INCOME ON 27.11.2012. THE AO NOTED THAT AS PER THE TAX EVASION PETITION THE ASSESSEE HAS TAKEN A LOAN OF RS.2,75,000/- FROM THE COMPLAINANT (MRS. RAMA MAHESWARI). THE AO NOTES THAT THE ASSESSEE LATTER CLAIMED THAT HE HAD REFUNDED THE SAID AMOUNT TO THE COMPLAINANT IN CASH. THE AO NOTED THAT THE ASSESSE E HAD REFLECTED THE LOAN IN THE BOOKS MAINTAINED BY M/S. G. D. ENTERPRISES, THE PROPRIETA RY CONCERN OF THE ASSESSEE. THE AO NOTED THAT THE ASSESSEE HAD REPAID THE AMOUNT IN TH REE INSTALLMENTS I.E. (I) ON 28.08.2010 RS.1,10,000/-, (II) ON 04.09.2010 RS.99,000/- AND ( III) ON 05.09.2010 RS.66,000/-, THUS A TOTAL AMOUNT OF RS.2.75 LACS HAVE BEEN PAID AND TA KING NOTE OF THE REPAYMENT OF THE 2 ITA NO.1561/KOL/2016 GHANSHYAM DAS BIHARI, AY- 2011-12 AMOUNT, THE CIVIL SUIT FILED BY THE CREDITOR SMT. RAMA MAHESWARI WAS CLOSED BY THE COURT OF CIVIL JUDGE, SENIOR DIVISION, 2 ND COURT, ALIPORE ON 01.02.2016. TAKING NOTE OF THE AFORESAID FACTS, THE AO ASSESSED THE TOTAL INCOME O F THE ASSESSEE AT RS.13,730/-, HOWEVER, TOOK UP THE MATTER WITH THE JCIT, RANGE-34 TO INITI ATE PENALTY PROCEEDINGS AGAINST THE ASSESSEE FOR VIOLATION OF SEC. 269T OF THE ACT. TH EREAFTER, WE NOTE THAT JCIT VIDE ORDER DATED 29.09.2014 IMPOSED 100% OF AMOUNT REPAID IN C ASH OF RS.2.75 LACS I.E. RS.2.75 LACS AS PENALTY U/S. 271E OF THE ACT. AGGRIEVED, THE ASS ESSEE PREFERRED APPEAL BEFORE THE LD. CIT(A), WHO WAS PLEASED TO CONFIRM THE SAME. AGGRI EVED, THE ASSESSEE IS BEFORE US. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. WE NOTE THAT ASSESSEE IS AN INDIVIDUAL WHO W AS TRADING IN IRON AND STEEL. THE ASSESSEE IN THE RELEVANT ASSESSMENT YEAR HAD NO TAXABLE INCO ME. THE ASSESSEE HAD TAKEN LOAN FROM MRS. RAMA MAHESWARI AN AMOUNT OF RS.2.75 LACS WHICH COULD NOT BE RETURNED TO THE SAID CREDITOR WITHIN THE TIME AS AGREED UPON BY THE PART IES BECAUSE THE ASSESSEE WAS SUFFERING FROM SERIOUS ILLNESS (NEURO RELATED DISEASE) AND BU SINESS LOSS. THE CREDITOR MRS. RAMA MAHESWARI MEANWHILE FILED A CIVIL SUIT FOR REALIZAT ION OF THE SAID AMOUNT OF LOAN AND SIMULTANEOUSLY FORWARDED A TAX EVASION PETITION AGA INST THE ASSESSEE BEFORE THE INCOME TAX DEPARTMENT. DURING THE PROCEEDINGS BEFORE THE COUR T OF CIVIL JUDGE WHILE DEFENDING THE CIVIL SUIT FILED BY THE PLAINTIFF MRS. RAMA MAHESWA RI, WE NOTE THAT THE ASSESSEE HAD WITHDRAWN FROM HIS BANK ACCOUNT RS.1.10 LACS ON 08. 10.2010 (PAGE 7 BANK STATEMENT OF ASSESSEE) AND HAD HANDED OVER THE SAID AMOUNT ON 28 .08.2010 TO THE CREDITOR; AND THEREAFTER BY ANOTHER TWO INSTALMENTS PAID THE REST OF THE AMO UNT. IT IS EVIDENT FROM PAGES 8 TO 9 OF THE PAPER BOOK WHICH IS THE ORDER OF THE COURT OF CIVIL JUDGE, SENIOR DIVISION, 2 ND COURT, ALIPORE, WHEREIN IT HAS BEEN STATED THAT MRS. RAM M AHESWARI HAS SETTLED THE DISPUTE AMICABLY OUTSIDE THE COURT WITH THE ASSESSEE. THE DEPARTMENT HAVING RECEIVED THE TAX EVASION COMPLAINT FROM MRS. RAMA MAHESWARI ACTED UP ON IT AND HAD ISSUED NOTICE U/S. 148 OF THE ACT FOR REOPENING THE ASSESSMENT AND TAKING NOTE OF THE FACT THAT THE AMOUNT IN QUESTION HAS BEEN REPAID BY THE ASSESSEE IN CASH HA S IMPOSED PENALTY U/S. 271E OF THE ACT. ACCORDING TO THE ASSESSEE, HE WAS SUFFERING FROM NE URO RELATED PROBLEMS AND WAS BED RIDDEN BECAUSE OF STROKE WHICH FACT IS EVIDENT FROM A PERUSAL OF MEDICAL DOCUMENTS OF ASSESSEE FILED BEFORE US; AND DURING THIS PERIOD TH E ASSESSEE HAD SUFFERED HUGE BUSINESS LOSS BECAUSE OF WHICH HE DID NOT HAD INCOME ASSESSABLE T O TAX. SINCE THERE WAS SHORTAGE OF FUND TO RUN THE BUSINESS HE HAD TAKEN A LOAN FROM MRS. R AMA MAHESWARI. SINCE THE LOAN COULD 3 ITA NO.1561/KOL/2016 GHANSHYAM DAS BIHARI, AY- 2011-12 NOT BE PAID WITHIN THE TIME STIPULATED, SHE FILED C IVIL SUIT FOR REALIZATION OF THE AMOUNT AS WELL AS FILED A TAX EVASION COMPLAINT BEFORE THE IN COME TAX DEPARTMENT TO PUT PRESSURE ON THE ASSESSEE. ACCORDING TO THE ASSESSEE, WHEN THE CIVIL SUIT WAS PENDING, THE ASSESSEE WANTED TO GIVE CHEQUE IN INSTALLMENTS TO SMT. RAMA MAHESWARI BUT SHE WAS NOT AGREEING TO THE SAME AND WANTED CASH INSTEAD OF CHEQUE BECAUSE SHE WAS AFRAID THAT CHEQUE WOULD BOUNCE TAKING NOTE OF THE ASSESSEES DIRE FINANCIAL POSITION. SINCE THERE WAS CIVIL CASE AGAINST THE ASSESSEE, THE ASSESSEE HAD NO OTHER ALT ERNATIVE BUT TO MAKE THE PAYMENT AS DICTATED BY THE CREDITOR SMT. RAMA MAHESWARI AND WA S FORCED TO PAY THE AMOUNT IN CASH TO HER. WE NOTE THAT THE ASSESSEE WAS IN DIRE FINANCI AL SITUATION BECAUSE OF HIS NEURO PROBLEMS AS WELL AS BECAUSE OF BUSINESS LOSS SUFFERED DUE TO NON-SUPERVISION OF THE BUSINESS. THE ASSESSEE WHEN FACED WITH THE CIVIL SUIT TO SETTLE T HE SAME, HE DID AS PER THE DIRECTION OF THE PLAINTIFF. THE PLAINTIFF SMT. MAHESWARI WAS NOT RE ADY TO ACCEPT THE CHEQUE FROM THE ASSESSEE TAKING NOTE OF THE BAD FINANCIAL POSITION OF THE ASSESSEE AND WANTED THE AMOUNT IN QUESTION IN CASH BECAUSE SHE FEARED THAT CHEQUE WOU LD BOUNCE. THEREFORE, THE ASSESSEE WAS FORCED TO WITHDRAW THE AMOUNT FROM HIS BANK ACCOUNT AND SQUARED UP THE DEBT WITH THAT OF THE CREDITOR. WE TAKING INTO CONSIDERATION THE FAC T THAT ASSESSEE WAS SUFFERING FROM SERIOUS NEURO DISORDER AND AT THE SAME TIME HIS PROPRIETORS HIP CONCERN WAS IN FINANCIAL CRISIS WHICH LED TO BUSINESS LOSS AND MEANWHILE HAD TO ANSWER TH E CIVIL SUIT FILED BY THE CREDITOR AND THE CREDITOR NOT ACCEPTING THE CHEQUE FEARING THAT CHEQ UE OF ASSESSEE WOULD NOT BE HONORED AND MAY GET BOUNCED, PER-FORCE HAD TO MAKE PAYMENT BY C ASH TO WRIGGLE OUT OF THE SUIT FILED AGAINST THE ASSESSEE. THE FACTS DISCLOSED ABOVE, G IVEN RISE TO REASONABLE CAUSE ENVISAGED U/S. 273B OF THE ACT. THEREFORE IN THE PECULIAR FAC TS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE VIEW THAT PENALTY FOR INFRACTION OF SEC. 269 T OF THE ACT WAS NOT WARRANTED. WE, THEREFORE, FOR REASONS DISCUSSED ABOVE ARE OF THE O PINION THAT PENALTY OUGHT NOT TO HAVE BEEN IMPOSED ON THE ASSESSEE IN THIS CASE, AND, THEREFOR E, WE DIRECT DELETION OF THE SAME. APPEAL OF ASSESSEE IS ALLOWED. 4. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED ORDER IS PRONOUNCED IN THE OPEN COURT ON 28TH MARCH , 2018 SD/- SD/- (DR. A. L. SAINI) (ABY. T. VARKEY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED :28TH MARCH, 2018 JD.(SR.P.S.) 4 ITA NO.1561/KOL/2016 GHANSHYAM DAS BIHARI, AY- 2011-12 COPY OF THE ORDER FORWARDED TO: 1 . APPELLANT SHRI GHANSHYAM DAS BIHANI, 11A, BALLYGU NGE CIRCULAR ROAD, KOLKATA-700 019. 2 RESPONDENT J.C.I.T, RANGE 34, KOLKATA. 3 . THE CIT(A), KOLKATA 4. 5. CIT , KOLKATA DR, KOLKATA BENCHES, KOLKATA / TRUE COPY, BY ORDER, ASSTT. REGISTRAR .