ITO, New Delhi V. Sh. Sudesh Kumar Sareen, Delhi

ITA 1965/DEL/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2291 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-12-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 26-11-2009
• Assessment Year: 2003-2004
• Appeal Filed On: 11-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 271E; 144

Judgement Text

I.T.A. NO.1965 /DEL/09 1/3 IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH G NEW DELHI) BEFORE SHRI A.K. GARODIA, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER I.T.A. NO. 1965/DEL/2009 ASSESSMENT YEAR : 2003-04 ITO, SHRI SUDESH KUMAR SAREEN, WARD-13 (1), J-70, DILSAD COLONY, NEW DELHI. V. DELHI. (APPELLANT) (RESPONDENT) PAN /GIR/NO.AFHPS-7559-F APPELLANT BY : SHRI ARUN KUMAR JAIN, SR. DR. RESPONDENT BY : NONE. ORDER PER A.K. GARODIA, AM: THIS IS REVENUE'S APPEAL DIRECTED AGAINST THE ORDER OF LD CIT(A)-XVI, NEW DELHI DATED 27.2.2009 FOR ASSESSMENT YEAR 2003-04. 2. THE ONLY GROUND RAISED BY THE REVENUE READS AS U NDER:- ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD CIT(A) ERRED IN LAW DELETING THE PENALTY OF RS.7,23 ,470/- IMPOSED U/S 271E OF THE ACT. 3. IN THE PRESENT CASE, NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SERVICE OF NOTICE AND HENCE WE PROCEED TO DISPOSE O FF THE APPEAL AFTER HEARING THE LD DR OF THE REVENUE AND EX PARTE QUA THE ASSE SSEE. . I.T.A. NO.1971/DEL/09 2/3 4. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A CIVIL CONTRACTOR AND THE ASSESSMENT WAS COMPLETED BY THE ASSESSING OFFICER U /S 144 OF HE IT ACT, 1961 DETERMINING TOTAL INCOME AT RS.45,67,674/-. THE ASS ESSING OFFICER HAS FURTHER OBSERVED THAT THE ASSESSEE HAD MADE REPAYMENTS IN V IOLATION TO SECTION 269T OF THE IT ACT. IN THE PENALTY ORDER PASSED BY THE ASSE SSING OFFICER U/S 271E OF THE ACT, THE ASSESSING OFFICER HAS GIVEN OFFICE NOTE AN D IN THAT NOTE, IT IS NOTED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD RECEIVED UN SECURED LOANS OF RS.28,84,485/- IN FINANCIAL YEAR 2001-02 AND IN THE PRESENT YEAR, THE SAME IS RECLASSIFIED AS ADVANCE FROM CUSTOMERS AND OUT OF O PENING BALANCE OF RS.13.26 LAKHS, THE ASSESSEE HAS REPAID RS.7,23,470/- TO 12 PARTIES IN CASH ON VARIOUS DATES DURING 4.1.2003 TO 7.3.2003. THE ASSESSING O FFICER IMPOSED PENALTY OF RS.7,23,470/- U/S 271E OF THE IT ACT. BEING AGGRIE VED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LD CIT(A) WHO HAS DELETED T HIS PENALTY ON THE BASIS THAT THERE WAS AMENDMENT IN SECTION 271E OF THE ACT W.E. F. 1.6.2003 AND ONLY THEREAFTER, PENALTY U/S 271E IS IMPOSABLE IN CASES OF REPAYMENT OF LOAN REFERRED TO IN SECTION 269T OF THE ACT. BEFORE THAT DATE, SU CH PENALTY U/S 271E WAS IMPOSABLE IN CASE OF REPAYMENT OF DEPOSIT WITHOUT C OMPLYING THE REQUIREMENTS OF SECTION 269T OF THE ACT. IT IS FURTHER HELD BY LD C IT(A) THAT IN THE PRESENT CASE, REPAYMENT IS OF LOAN AND HENCE NO PENALTY IS IMPOSA BLE. NOW, THE REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD THE LD DR OF THE REVENUE. WE FIND THAT IN THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER U/S 271E OF THE ACT , AN OFFICE NOTE IS ALSO APPENDED BY THE ASSESSING OFFICER AND IN THE SAID N OTE, IT IS NOTED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS RECEIVED UN -SECURED LOAN OF RS.28.84 LAKHS DURING FINANCIAL YEAR 2001-02 RELEVANT TO ASS ESSMENT YEAR 2002-03 AND THE SAME WERE CARRIED FORWARD TO THE YEAR UNDER CON SIDERATION. ALL THESE UN- SECURED LOANS WERE TRANSFERRED TO THE ADVANCES RECE IVED FROM THE CUSTOMERS ACCOUNT AND OUT OF THIS ONLY, REPAYMENT WAS MADE IN CASH OF RS.7,23,470/-. THESE FACTS, MAKE IT CLEAR THAT IN THE PRESENT CASE , THE REPAYMENT IN CASH WAS OF LOANS OR OF ADVANCE FROM CUSTOMERS BUT IT IS NOT A CASE OF REPAYMENT OF DEPOSIT. . I.T.A. NO.1971/DEL/09 3/3 UPTO 31,5.2003 I.E. BEFORE AMENDMENT EFFECTIVE FROM 1.6.2003, PENALTY U/S 271E WAS TO BE IMPOSED IF A PERSON HAS REPAID ANY DEPOSI T REFERRED TO IN SECTION 269T OTHERWISE THAN IN ACCORDANCE WITH THE PROVISIONS OF THAT SECTION. IT HAS BEEN OBSERVED BY THE LD CIT(A) THAT THE REPAYMENT IS EIT HER OF LOAN OR OF ADVANCE FROM CUSTOMERS BUT THERE IS NO REPAYMENT OF DEPOSIT. AFT ER GOING THROUGH THE ORDERS OF THE AUTHORITIES BELOW, WE ARE IN AGREEMENT WITH THE LD CIT(A) ON THIS ASPECT THAT IT IS NOT A REPAYMENT OF DEPOSIT. SINCE THE AMENDME NT IS W.E.F. 1.6.2003, NO PENALTY IS IMPOSABLE IN THE PRESENT CASE U/S 271E B ECAUSE THE REPAYMENTS ARE DURING JANUARY, 2003 TO MARCH, 2003 OF UNSECURED LO ANS/ADVANCES FROM CUSTOMERS AND NOT OF ANY DEPOSIT AND HENCE THERE IS NO VIOLATION OF SECTION 269T. WE, THEREFORE, CONFIRM THE ORDER OF LD CIT(A) ON TH IS ISSUE. THIS GROUND OF THE REVENUE IS REJECTED. 6. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. 7. ORDER PRONOUNCED IN THE OPEN COURT ON 4TH DECE MBER, 2009. SD/- SD/- (GEORGE MATHAN) (A.K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER DT. 4. .12.2009. HMS COPY FORWARDED TO:- 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT (A)-, NEW DELHI. 5. THE DR, ITAT, LOKNAYAK BHAWAN, KHAN MARKET, NEW DELHI. TRUE COPY. BY ORDER (ITAT, NEW DELHI).