HARSHADRAI CHATURDAS PATEL, KOLHAPUR V. JCIT, Range-2, KOLHAPUR

ITA 1966/PUN/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9335 (ITAT-PUNE)
• Duration Of Justice: 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-08-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 12-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: IS DIRECTED AGAINS T PASSED
• Keywords: Reasonable cause
• Section: 273B; 271E; 201

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE VIRTUAL COURT BEFORE SH RI R.S. SYAL, VICE PRESIDENT AND SH RI S.S. VISWANETHRA RAVI , J UDICIAL MEMBER I TA NO. 1966 /PUN/201 9 / ASSESSMENT YEAR : 20 1 3 - 1 4 HARSHADRAI CHATURDAS PAT EL, SHREE LAXMI TRADERS, 573, SHAHUPURI, KOLHAPUR - 416001 PAN : A ODPP5142B VS. JCIT, RANGE - 2, KOLHAPUR. APPELLANT RESPONDENT / ORDER PER R.S.SYAL, VP : TH IS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) - 2 , KOLHAPUR ON 17 - 10 - 2019 CONFIRMING THE PENALTY OF RS.12,00,000 IMPOSED BY THE ASSESSING OFFICER (AO) U/S 271E OF THE INCOME - TAX ACT, 1961 (HE REINAFTER REFERRED TO AS THE ACT) IN RELATION TO THE ASSESSMENT YEAR 20 1 3 - 1 4 . 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT THE ASSESSEE REPAID CERTAIN UNSECURED LOANS DURING THE YEAR OTHERWISE THAN THROUGH ACCOUNT PAYEE CHEQUE / ACCOUNT PAYEE DEMAN D DRAFT. THE A SSESSEE BY SHRI PRATAP S. KULKARNI RE VENUE BY SHRI PRATHAMESH J. LAWAND DATE OF HEARING 1 4 - 08 - 2020 DATE OF PRONOUNCEMENT 14 - 0 8 - 2020 ITA NO . 1966 /PUN/ 201 9 HARSHADRAI CHATURDAS PATEL 2 AO TABULATED SIX SEPARATE LOANS TO TWO PARTIES , NAMELY , A.S. KUSHALE, PROP. SHRI RANJEETSINGH A. KUSALE - RS.7,00,000 AND RAM GANGA ADAT DUKAN, PROP. SOU. MALUTAI DATTATRAYA PATIL - RS.5,00,000. ON BEING CALLED UPON TO EXPLAIN AS TO WHY THE ASSESSEE CONTRAVENED THE PROVISIONS OF SECTION 269T OF THE ACT, THE ASSESSEE SUBMITTED THAT THE AMOUNTS WERE INITIALLY REPAID THROUGH CROSSED CHEQUES TO THE CREDITORS IN THE LAST WEEK OF MARCH, 2013 . HOWEVER, T HE CREDITORS CONTACTED THE ASSESSEE FOR CANC ELLING THE CROSSED CHEQUES AS THEY WERE ADAT AGENTS AND WANTED TO BUY JIGGERY FROM AGRICULTURISTS BEFORE 31.03.2013 , FOR WHICH CASH WAS REQUIRED ON URGENT BASIS . THIS LED TO THE CANCELLATION OF CROSSED CHEQUES BY THE ASSESSEE AND CONVERTING TH EM INTO BEAR ER CHEQUES. NOT CONVINCED, THE AO IMPOSED PENALTY U/S 271E OF THE ACT, FOR RS.12,00,000 , WHICH CAME TO BE AFFIRMED IN THE FIRST APPEAL. 3. WE HAVE HEARD BOTH THE SIDES THROUGH VIRTUAL COURT AND GONE THROUGH THE RELEVANT MATERIAL ON RECORD. THE FACTS OF T HE CASE APROPOS THE ISSUE ARE THE ASSESSEE REPAID RS.12,00,000 TO TWO ADAT FIRMS INITIALLY BY MEANS OF CROSSED CHEQUES. SUCH CHEQUES WERE ISSUED IN THE LAST WEEK OF MARCH, 2013. THE PARTIES APPROACHED THE ASSESSEE FOR CANCELLATION OF CROSSED CHEQUES AND ISSUANCE OF BEARER ITA NO . 1966 /PUN/ 201 9 HARSHADRAI CHATURDAS PATEL 3 CHEQUES BECAUSE THEY WANTED TO MAKE PAYMENTS TO THEIR AGRICULTURIST CREDITORS ON URGENT BASIS . COPIES OF SUCH CHEQUES, INITIALLY CROSSED, HAVE BEEN PLACED ON RECORD. THIS REASON WAS STATED BEFORE THE AO AS WELL, WHO WITHOUT CONTROVERTING THE SAME, PROCEEDED TO IMPOSE THE PENALTY. SECTION 273B OF THE ACT STATES THAT NO PENALTY SHOULD BE IMPOSED UNDER CERTAIN SECTIONS , INCLUDING SECTION 271E OF THE ACT , IF THERE IS A REASONABLE CAUSE FOR THE DEFAULT. AS THE DEFAULT IN TERMS OF SECTION 269 T OF THE ACT WAS ACTUALLY COMMITTED BY THE ASSESSEE, BUT IN THE GIVEN CIRCUMSTANCES OF THE CASE, THE REASON FOR SUCH A DEFAULT CAN BE CATEGORIZED IN THE REALM OF ` REASONABLE CAUSE , THEREBY, BRINGING THE CASE WITHIN AMBIT OF SECTION 273B OF THE ACT . WE, T HEREFORE, ORDER TO DELETE THE PENALTY IN TERMS OF SECTION 271E READ WITH SECTION 273B . 4 . IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH AUGUST , 2020 . SD/ - SD/ - ( S.S. VISWANET HRA RAVI ) ( R.S.SYAL ) JUDICIAL MEMBER VICE PRESIDENT PUNE ; DATED : 14 TH AUGUST , 2020 GCVSR ITA NO . 1966 /PUN/ 201 9 HARSHADRAI CHATURDAS PATEL 4 / COPY OF THE ORDER IS FORWARDE D TO : 1. / THE APPELLANT; 2. / THE RESPONDENT; 3. THE CIT(A) - 2 , KOLHAPUR 4 . 5. THE PR.CIT - 2 , KOLHAPUR , , / DR A , ITAT, PUNE 6 . / GUARD FILE / BY ORDER, / / TRUE COPY // SENIOR PRIVATE SECRETARY , / ITAT, PUNE DATE 1. DRAFT DICTATED ON 1 4 - 08 - 2020 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 1 4 - 08 - 2020 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. DATE OF UPLOADING ORDER SR.PS 8. FILE SENT TO THE BENCH CLERK SR.PS 9. DA TE ON WHICH FILE GOES TO THE HEAD CLERK 10. DATE ON WHICH FILE GOES TO THE A.R. 11. DATE OF DISPATCH OF ORDER. *