Sant Baba Sunder Singh Ji Canadian Charitable Trust (Regd), Barnala V. JCIT, Sangrur

ITA 158/CHANDI/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 9917 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 10-03-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 12-02-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S K MITTAL
• Keywords: Charitable institution; Reasonable cause
• Section: 273B

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, CHANDIGARH BEFORE SHRI H.L. KARWA, HONBLE VICE PRESIDENT AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.158/CHD/2014 ASSESSMENT YEAR:2008-09 SANT BABA SUNDER SINGH VS. JCIT JI CANADIAN CHARITABLE TRUST SANGRUR RANGE VILLAGE TALLEWAL SANGRUR BARNALA PAN NO. AAETS3522P (APPELLANT) (RESPONDENT) APPELLANT BY : SH. RAJIV SALDI RESPONDENT BY : SH. S.K. MITTAL DATE OF HEARING : 08/04/2016 DATE OF PRONOUNCEMENT :14/06/2016 ORDER PER ANNAPURNA GUPTA A.M. THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A), PATIALA DATED 26.12.2013. THE ASSESSEE HAS TAKEN TH E FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LD. CIT(A) HAVE ERRED IN UPHOLDING THE IMP OSITION OF PENALTY OF RS. 12,49,494/- WHICH IS ARBITRARY, UNJUSTIFIED, BAD IN LAW AND AGAINST THE FACTS. 2. THAT THE LD. CIT(A) HAVE ERRED IN LAW AS WELL AS ON FACTS IN HOLDING THAT PROVISIONS OF 269TT AND 271E ARE ATTRACTED IN RESPE CT OF TEMPORARY ACCOMMODATION FROM ONE CHARITABLE INSTITUTION TO OT HER I.E. FROM MOHATTMIM SETTLER OF THE TRUST AND CONSEQUENTLY SUSTAINING TH E PENALTY U/S 271E. 3. THAT THE LD. CIT (A) IGNORED THE FACT THAT INCOME O F THE TRUST IS EXEMPT AS WELL AS MOHATTMIM OF GURUDWARA SAHIB SANT BABA SUND ER SINGH JI CANADIAN VILLAGE TALLEWAL IS NOT TAXABLE. HENCE NO PENALTY W AS LEVIABLE. 4. THAT IN ANY CASE, THE LD. COMMISSIONER OF INCOME TA X (APPEALS) HAS FAILED TO APPRECIATE THE REASONABLE CAUSE PLEADED BEFORE H IM IN THE CORRECT PERSPECTIVE AND AS SUCH THE ORDER PASSED BY HIM IS ARBITRARY AND UNJUSTIFIED. 5. THAT THE LD. CIT (A) HAVE ERRED IN NOT PROPERLY APP RECIATING THE CASE LAW RELIED UPON BY THE APPELLANT. 6. THAT THE ORDER OF THE LD. COMMISSIONER OF INCOME TA X IS ERRONEOUS, ARBITRARY, OPPOSED TO LAW AND FACTS OF THE CASE AND IS, THUS, UNTENABLE. 2 2. BRIEF FACTS RELATING TO THE CASE ARE THAT THE AS SESSEE IS A TRUST RUNNING A SCHOOL AND A B.ED COLLEGE. DURING THE COURSE OF ASS ESSMENT PROCEEDINGS, IT WAS NOTICED THAT THE ASSESSEE HAD REPAID INTEREST FREE LOAN AMOUNTING TO RS. 12,49,494/- TAKEN FROM THE MAHATTMIN GURUDWARA SAHI B SANT BABA SUNDER SINGH JI CANADIAN IN CASH VIOLATING THE PROVISIONS OF SEC TION 269T OF THE INCOME TAX ACT, 1961. THE ASSESSEE SUBMITTED THAT THE IMPUGNED SUM WAS NOT A LOAN BUT AN ACCOMMODATING ADVANCE FROM THE MOHATTMIN GURUDWARA SAHIB SANT BABA SUNDER SINGH JI CANADIAN VILLAGE TALLEWAL. LD. AO R EJECTED THE ASSESSEES CONTENTION STATING THAT DURING ASSESSMENT PROCEEDIN G THE ASSESSEE HIMSELF HAD ADMITTED THAT IT HAD TAKEN LOANS FROM THE MOHATTMIM AND MOREOVER NO REASONABLE CAUSE HAD BEEN ADVANCED FOR REPAYING THE LOANS IN CASH. HE THEREFORE LEVIED PENALTY U/S 271E AMOUNTING TO RS. 12,49,494/-. 3. BEFORE THE HONBLE CIT(A) THE ASSESSEE REPEATED THE CONTENTIONS MADE BEFORE THE A.O. AND FURTHER RELIED UPON THE DECISIO N OF THE DELHI HIGH COURT IN THE CASE OF CIT VS. RAJ KUMAR REPORTED IN (2009) 31 8 ITR 462. LD. CIT(A) REJECTED THE CONTENTION OF THE ASSESSEE AND UPHELD THE LEVY OF PENALTY U/S 269T BY HOLDING AT PARA 4.4 OF ASSESSMENT ORDER AS FOLLOWS: - I HAVE CONSIDERED THE SUBMISSION MADE. THE ISSUE IN THE PRESENT APPEAL IS LIMITED TO REPAYMENT OF CERTAIN AMOUNT IN CASH TO THE TRUST . THERE APPEARS NO REASONABLE CAUSE FOR REPAYMENT OF THE AMOUNT IN CAS H TO THE TRUST. IT IS FURTHER NOTED THAT FROM THE REPORT OF THE A.O. THAT DURING THE ASSESSMENT PROCEEDING, THE APPELLANT ADMITTED THE ADVANCE TO BE IN THE NAT URE OF LOAN. THEREFORE I AGREE WITH THE A.O. THAT REPAYMENT MADE IN THE GARB OF ACCOMMODATING ADVANCES CAN NOT ABSOLVE THE APPELLANT OF THE LIABI LITY ENVISAGED U/S 269T WITHOUT A VALID REASONABLE CAUSE. THE CONTENTION OF THE APPELLANT IN THIS REGARD IS NOT ACCEPTABLE. THEREFORE, THE PENALTY LEVIED BY TH E A.O. IS UPHELD. 4. BEFORE US LD. AR REITERATED THE ARGUMENTS RAISED BELOW, THAT AMOUNT REPAID IN CASH WAS NOT IN THE NATURE OF LOAN IN THE FIRST PLACE, BUT WAS AN ACCOMMODATING ADVANCE. THEREFORE REPAYMENT OF THE S AME IN CASH DID NOT VIOLATE THE PROVISION OF SECTION 269T, SINCE THE SA ME APPLIED ONLY TO REPAYMENT MADE IN CASH OF LOANS TAKEN. FURTHER LD. AR PLEADED THAT THERE WAS REASONABLE CAUSE, SINCE THE ASSESSEE WAS EXEMPT FROM PAYING TA XES, BEING A CHARITABLE INSTITUTE AND SO ALSO THE GURUDWARA WHOSE MAHATTMIN HAD GIVEN THE ADVANCE. THEREFORE BY VIRTUE OF SECTION 273B, NO PENALTY IN ANY CASE WAS LEVIABLE. THE LD. AR RELIED UPON THE JUDGMENT OF THE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. SUNIL KUMAR GOEL (2009) 315 ITR 163, IN SU PPORT OF ITS CONTENTION. 5. LD. DR ON THE OTHER HAND RELIED ON THE ORDER OF THE LD. CIT(A). 6. WE HAVE CONSIDERED THE ARGUMENTS OF BOTH THE PAR TIES AND PERUSED THE DOCUMENTS PLACED BEFORE US AS ALSO THE ORDERS OF TH E AUTHORITIES BELOW. 3 7. THE ONLY ISSUE IN THE PRESENT CASE IS THE LEVY O F PENALTY U/S 271E. SECTION 271E LEVIES PENALTY IF A LOAN OR DEPOSIT HA S BEEN REPAID OTHERWISE THAN BY ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT AS SPECIFIED IN SECTION 269T OF THE ACT. THUS SECTION 271E CONTEMPLATES THE EXISTENCE OF TWO CONDITION. 1- TAKING OF A LOAN 2- REPAYMENT THEREOF OTHERWISE THAN BY ACCOUNT PAYEE C HEQUE OR DRAFT. 8. IN THE PRESENT CASE WE FIND THAT ADMITTEDLY DURI NG ASSESSMENT PROCEEDINGS THE ASSESSEE FILED COPIES OF ACCOUNTS O F THE IMPUGNED SUMS TAKEN STATING THEM AS LOANS ACCOUNT. THE SAME ARE REPRO DUCED IN THE ASSESSMENT ORDER AT PARA NO. 11. THUS DURING ASSESSMENT PROCEE DINGS THE ASSESSEE ITSELF STATED THAT THE IMPUGNED SUMS WERE IN THE NATURE OF LOAN. DURING PENALTY PROCEEDINGS THE ASSESSEE HAS CHARACTERIZED THE SAME AS ACCOMMODATING ADVANCES AND WE FIND THAT NEITHER HAS THE SAME BEE N SUBSTANTIATED BEFORE THE LOWER AUTHORITIES NOR BEFORE US. THE ASSESSEE W E FIND HAS SIMPLY MADE A BALD STATEMENT WITHOUT EVIDENCING AS TO HOW THE NATURE O F THE SAME IS ACCOMMODATING ADVANCE. THE ASSESSEE COULD HAVE BR OUGHT OUT THE COMPELLING CIRCUMSTANCES IN WHICH THE CASH ADVANCES WERE SUPPOSEDLY MADE BY THE MOHATTMIN TO ACCOMMODATE THE ASSESSEE. BUT N OTHING OF THE SORT WAS BROUGHT EITHER BEFORE THE LOWER AUTHORITIES OR BEFO RE US. THEREFORE WE HOLD THAT THE ASSESSEE HAVING ACCEPTED THE NATURE OF THE MONE Y RECEIVED AS BEING LOAN, HE CANNOT NOW CHANGE HIS STAND WITHOUT ANY CORROBOR ATING EVIDENCE. THE IMPUGNED SUM RECEIVED BY THE ASSESSEE THEREFORE IS IN THE NATURE OF LOAN. UNDENIABLY THE ASSESSEE HAS REPAID THE SAME IS CASH VIOLATING THE PROVISION OF SECTION 269T AND THEREFORE PENALTY U/S 271E OUGHT T O BE LEVIED. BUT HAVING COME UP WITH THE ARGUMENT OF REASONABLE CAUSE THE S AME NEEDS TO BE EXAMINED IN THE LIGHT OF SECTION 273B. SECTION 273B STATES THAT WHERE ASSESSEE HAS A REASONABLE CAUSE FOR THE FAILURE COMMITTED, N O PENALTY SHALL BE LEVIED. 9. IN THE PRESENT CASE THE REASONABLE CAUSE OF THE ASSESSEE FOR MAKING THE PAYMENT IN CASH, IS THAT IT IS NOT LIABLE TO PAY TA XES NOR IS THE GURUDWARA WHOSE MOHATTMIN GAVE THE LOAN. THIS IN OUR CONSIDERED OPI NION IS NEITHER HERE NOR THERE, NOR DOES IT JUSTIFY THE COMMITTING OF THE DE FAULT. WE THEREFORE CONCUR WITH THE FINDINGS OF THE LD CIT(A) THAT THERE IS NO REAS ONABLE CAUSE FOR THE DEFAULT COMMITTED. THE DECISION RELIED UPON BY THE LD. AR I N THE CASE OF SUNIL KUMAR GOEL(SUPRA) WE FIND DOES NOT SUPPORT THE CASE OF TH E ASSESSEE SINCE THE SAME IS DISTINGUISHABLE ON FACTS. IN THE CASE OF SUNIL KUMA R GOEL (SUPRA) IT HAS BEEN 4 NOTED BY THE HONBLE HIGH THAT THE CASH TRANSACTION MADE BY THE ASSESSEE WAS DUE TO BUSINESS EXIGENCY WHICH WAS AN UNDISPUTED FA CT AND THEREFORE IT WAS HELD THAT THERE EXISTED REASONABLE CAUSE FOR VIOLAT ING THE PROVISION OF SECTION 269T THEREBY DELETING THE PENALTY LEVIED U/S 271E. IN THE PRESENT CASE AS WE HAVE NOTED ABOVE, THE ASSESSEE HAS FAILED TO DEMONS TRATE ANY REASONABLE CAUSE FOR COMMITTING THE DEFAULT. 10. IN VIEW OF THE ABOVE WE THEREFORE HOLD THAT THE ASSESSEE HAS VIOLATED THE PROVISION OF SECTION 269T OF THE ACT BY REPAYING LO AN IN CASH AND PENALTY OF RS. 12,49,494/- HAS BEEN RIGHTLY LEVIED. 11. THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 14/06/2016. SD/- SD/- (H.L. KARWA) (ANNAPURNA GUPTA) VICE PRESIDENT ACCOUNTANT MEMBER DATED : 14/06/2016 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR