Sri Tarun Chandra, Kolkata V. J.C.I.T,Rg - 40,Kol., Kolkata

ITA 1819/KOL/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83017 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 7 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2014
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 10-12-2012
• Court: TRIBUNAL
• Department Lawyers: USMANI
• Keywords: Non-deduction of tax; Reasonable cause
• Section: 273B; 143(3); 246

Judgement Text

, A , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , . . . . ! ! ! ! /AND ' #!' ' #!' ' #!' ' #!' , ) [BEFORE SHRI P. K. BANSAL, AM & SHRI MAHAVIR SINGH, JM] !$ / I.T.A NO.1819/KOL/2012 #% &'/ ASSESSMENT YEAR: 2006-07 SHRI TARUN CHANDRA VS. JOINT COMMISSIONER OF I NCOME-TAX, (PAN: ACOPC5679H) RANGE-40, KOLKATA. ()* /APPELLANT ) (+,)*/ RESPONDENT ) DATE OF HEARING: 24.07.2014 DATE OF PRONOUNCEMENT: 01.08.2014 FOR THE APPELLANT: SHRI SUBHAS AGARWAL, ADVOCATE FOR THE RESPONDENT: SHRI S. H. USMANI, JCIT, SR. DR / ORDER PER SHRI MAHAVIR SINGH, JM : THIS APPEAL BY ASSESSEE IS ARISING OUT OF ORDER OF CIT(A)-XII, KOLKATA IN APPEAL NO. 16/XII/R-40/10-11 DATED 31.07.2012. ASSESSMENT WAS FRAMED BY ITO, WARD-42(4), KOLKATA U/S. 143(3) OF THE INCOME-TAX ACT, 1961 (HEREINAFTE R REFERRED TO AS THE ACT) FOR ASSESSMENT YEARS 2006-07 VIDE HIS ORDER DATED 12.12.2008. PEN ALTY WAS IMPOSED BY JCIT, RANGE-40, KOLKATA U/S. 271E OF THE ACT VIDE HIS ORDER DATED 0 8.03.2010. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) CONFIRMING THE LEVY OF PENALTY BY JCIT, RANGE-40, KOLKATA U/S. 271 E OF THE ACT FOR VIOLATION OF PROVISIONS OF SECTION 269T OF THE ACT I.E. REPAYMENT OF LOAN IN C ASH. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. THE FACTS ARE THAT 40 PERSONS HAVE GIVEN LOAN TO AS SESSEE AMOUNTING TO RS.20,000/- EACH IN EARLIER YEAR. IN THE RELEVANT FY 2005-06 RELEVANT T O AY 2006-07 THESE AMOUNTS WERE REPAID BY ASSESSEE IN CASH THAT MEANS EACH OF THE PERSONS RS. 20,000/- IN CASH WAS REPAID AND THE TOTAL AMOUNT REPAID WAS RS. 8 LACS. THESE ARE ADMITTED F ACTS. THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS INITIATED PENALTY PROCEEDING S U/S. 271E OF THE ACT FOR VIOLATION OF PROVISIONS OF SECTION 269T OF THE ACT. THE MATTER WAS REFERRED TO JCIT, RANGE-40, KOLKATA AND HE LEVIED THE PENALTY TO THE TUNE OF RS.8,00,000/- BEING THE AGGREGATE AMOUNT OF REPAYMENT OF LOAN MADE BY ASSESSEE TO 40 PERSONS I.E. TO EACH OF THE PERSONS THE REPAYMENT IS RS.20,000/-. 2 ITA NO.1819/K/2012 SHRI TARUN CHANDRA AY 06-07 AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO ALSO CONFIRMED THE ACTION OF AO. AGGRIEVED, NOW ASSESSEE IS IN APPEAL BEFORE US. 4. WE FIND THAT THE FACTS ARE ADMITTED AND THE ASSE SSEE REPAID THESE AMOUNTS OF LOAN TAKEN FROM 40 PERSONS IN CASH AT RS.20,000/- IN EACH OF T HE PERSON. ADMITTEDLY,THE AMOUNT OF REPAYMENT BY THE ASSESSEE IN EACH OF THE CASE DOES NOT EXCEED RS.20,000/- AND IT IS ONLY AT RS.20,000/-. WHETHER THE ASSESSEE IS LIABLE FOR PEN ALTY OR NOT. THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE AND AGAINST REVENUE BY CBDT CIRCULAR N O. 572 DATED 3 RD AUGUST, 1990, WHICH READS AS UNDER: 43. SECTIONS 271C, 271D AND 271E, WHCH WERE INSER TED IN THE INCOME-TAX ACT, WITH EFFECT FROM 1-4-1989 BY THE DIRECT TAX LAWS (AMENDM ENT) ACT, 1987, PROVIDE FOR THE LEVY OF PENALTIES FOR CERTAIN DEFAULTS. PENALTY UNDER SE CTION 27IC IS LEVIED FOR FAILURE TO DEDUCT TAX AT SOURCE. PENALTY UNDER SECTION 271D MAY BE LE VIED FOR FAILURE TO COMPLY WITH THE PROVISIONS OF SECTION 269SS, I.E., FOR TAKING OR AC CEPTING ANY LOAN OR DEPOSIT IN EXCESS OF RS. 20,000 OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQU E OR BANK DRAFT. PENALTY UNDER SECTION 271E MAY BE LEVIED FOR FAILURE TO COMPLY WI TH THE PROVISIONS OF SECTION 269T RELATING TO REPAYMENT BY A COMPANY, INCLUDING A BAN KING COMPANY, A CO-OPERATIVE SOCIETY OR A FIRM, OF DEPOSITS, INCLUDING INTEREST, EXCEEDI NG RS. 20,000 IN THE AGGREGATE OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR BANK DRAFT. 43.1 THE INCOME-TAX AUTHORITY, WHICH CAN LEVY THESE PENALTIES, IS NOT MENTIONED IN ANY OF THESE SECTIONS. IN ORDER TO ENSURE THAT THESE PENAL TIES ARE MPOSED BY SENIOR OFFICERS ONLY, A NEW SUB-SECTION (2)HAS BEEN INSERTED IN EACH OF T HE SAID SECTIONS 271C, 271D AND 271E TO PROVIDE THAT PENALTY UNDER EACH OF THESE SECTION S SHALL BE IMPOSED BY THE DEPUTY COMMISSIONER. 43.2 A CONSEQUENTIAL AMENDMENT HAS BEEN MADE IN SEC TION 246 OF THE INCOME-TAX ACT RELATING TO FILNG OF APPEALS BEFORE THE DEPUTY COM MISSIONER (APPEALS) OR COMMISSIONER (APPEALS), SO THAT APPEALS AGAINST ORDERS IMPOSING PENALTIES UNDER THE SAID SECTIONS 271C, 271D AND 271E SHALL NOW BE FILED BEFORE THE COMMISS IONER (APPEALS) ONLY. 43.3 THESE AMENDMENTS WILL TAKE EFFECT FROM THE LST APRIL, 1990. THIS CIRCULAR WAS FOLLOWED BY THE AHMEDABAD BENCH O F THIS TRIBUNAL IN THE CASE OF SHREENATHJI CORPORATION V. ASST. CIT (1997) 58 TTJ(AHMD) 611, 6 18-19, 619, WHEREIN IT IS OBSERVED AS UNDER: 6.5. LOOKING TO THE FACTS AND CIRCUMSTANCES WE ARE OF THE OPINION THAT THE LOAN/DEPOSITS TAKEN TO MEET URGENT AND IMMEDIATE REQUIREMENTS OF BUSINESS AND THE IMPRESSION GATHERED AS TAXPAYERS FROM THE AFORESAID CIRCULAR AND THE AD VERTISEMENT DID CONSTITUTE A REASONABLE CAUSE FOR ACCEPTING THE SAID LOANS/DEPOSITS OF RS.2 0,000 FROM EACH PARTY IN CASH WITHIN THE MEANING OF SECTION 273B OF THE ACT. EVEN, AMRITASAR BENCH OF THIS TRIBUNAL IN THE CASE OF RAJIANA KHETI STORE V. ITO (2006) 99 TTJ (ASR) 576, 580-81 HAS TAKEN A SIMILAR VIEW BY O BSERVING AS UNDER: 3 ITA NO.1819/K/2012 SHRI TARUN CHANDRA AY 06-07 . AS PER BOARDS CIRCULAR NO. 572, DATED 3 RD AUGUST, 1990, THE PROVISIONS OF SECTION 269SS WERE ATTRACTED ONLY IN CASES WHERE THE AMOUNT EXCEEDED RS.20,000. SUCH INSTRUCTIONS OF THE BOARD WERE BINDING ON THE FIELD OFFICER. THEREFORE, EVEN OTHERWISE PENALTY UNDER SECTION 271D WAS NOT LEVIABLE. IN AN Y CASE IT CONSTITUTED A REASONABLE CAUSE FOR ACCEPTING CASH LOANS.. AS THE ISSUE IS CRYSTAL CLEAR THAT IN EACH OF THE C ASE REPAYMENT IS AT RS.20,000/- AND IT DOES NOT EXCEED RS.20,000/-. AS THE ISSUE IS SQUARELY COVER ED IN FAVOUR OF THE ASSESSEE, WE DELETE THE PENALTY AND ALLOW THE APPEAL OF ASSESSEE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. 6. ORDER PRONOUNCED IN OPEN COURT ON 01.08.2014. SD/- SD/- , . . . . , ' #!' ' #!' ' #!' ' #!' , (P. K. BANSAL) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 1 ST AUGUST, 2014 -. #/0 #1 JD.(SR.P.S.) 2 +##3 43&5- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT SHRI TARUN CHANDRA, 61/11/3, MAHESH BAR IK LANE, KOL-11. 2 +,)* / RESPONDENT JCIT, RANGE-40, KOLKATA.. 3 . # ( )/ THE CIT(A), KOLKATA 4. 5. # / CIT KOLKATA 3:#; +# / DR, KOLKATA BENCHES, KOLKATA ,3 +#/ TRUE COPY,