Hemalatha Jhabakh, Coimbatore V. Addl. CIT, CHENNAI

ITA 2026/CHNY/2015

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6104 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-07-2017
• Assessment Year: 2006-2007
• Appeal Filed On: 28-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A SRINIVASAN
• Assessee Lawyers: A S SRIRAMAN
• Keywords: Reasonable cause; Condonation of delay

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI . , ' , % & BEFORE SHRI ABRAHAM P.GEORGE, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ./ ITA NO.2026/MDS/2015 & ITA NO.1097/MDS/2017 %' ' /ASSESSMENT YEAR: 2006-07 MRS.HEMALATHA JHABAKH, C/O.M/S.DAKSHIN CONSTRUCTIONS PVT. LTD., NO.9/2, KAMBAR STREET, WEST SAIDAPET, CHENNAI-600 015. VS. THE ASST. COMMISSIONER OF INCOME TAX, COMPANY RANGE-I, CHENNAI. [PAN: AAFPJ 7943 J ] ( ( /APPELLANT) ( )*( /RESPONDENT) ( + / APPELLANT BY : MR.A.S.SRIRAMAN, ADV. )*( + /RESPONDENT BY : MR.A.SRINIVASAN, JCIT + /DATE OF HEARING : 26.09.2017 + /DATE OF PRONOUNCEMENT : 27.09.2017 / O R D E R PER GEORGE MATHAN , JUDICIAL MEMBER : THESE ARE TWO APPEALS FILED BY THE ASSESSEE AGAINS T THE CONSOLIDATED ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-1 , CHENNAI, IN ITA NOS.97 & 98/10-11/A-1 (NEW NO.ITAS.102 & 103/CIT(A) -1/2010-11) DATED 29.07.2015 FOR THE AY 2006-07 AGAINST THE CON FIRMATION OF THE LEVY OF PENALTY U/S.271D & 271E OF THE ACT. ITA NO.2026/MDS/2015 & ITA NO.1097/MDS/2017 :- 2 -: 2. MR.A.SRINIVASAN, JCIT, REPRESENTED ON BEHALF OF THE REVENUE AND MR.A.S.SRIRAMAN, ADV., REPRESENTED ON BEHALF OF THE ASSESSEE. 3. IT WAS SUBMITTED BY THE LD.AR THAT INITIALLY THE ASSESSEE HAD FILED A CONSOLIDATED APPEAL IN RESPECT OF BOTH THE PENALTIE S BEFORE THE TRIBUNAL. IT WAS A SUBMISSION THAT AS THE TRIBUNAL HAD HELD THAT THE SEPARATE APPEAL HAD BEEN FILED FOR EACH PENALTY, THE ASSESSEE HAD F ILED THE APPEAL SEPARATELY AS PER PROVISIONS OF SEC.271E IN ITA NO. 1097/MDS/2017 CONSEQUENTLY, IT WAS DELAYED BY 552 DAYS. THE ASSE SSEE HAS FILED A PETITION FOR CONDONATION OF DELAY EXPLAINING THE RE ASONS. THE REVENUE HAS NOT RAISED ANY OBJECTION TO THE CONDONATION OF THE DELAY. CONSEQUENTLY, THE DELAY IN FILING OF THE APPEAL IN ITA NO.1097/MD S/2017 IS CONDONED AND BOTH THE APPEALS DISPOSED OF ON MERITS. 4. IT WAS SUBMITTED BY THE LD.AR THAT THE ASSESSEE IS AN INDIVIDUAL WHO HAD TAKEN LOAN IN CASH FROM HER HUSBAND, MOTHER-IN- LAW, SISTER AND SISTER- IN-LAW BETWEEN 01.04.2005 AND 05.05.2005 IN CASH FO R THE PURCHASE OF AN IMMOVABLE PROPERTY WHICH WAS UNDER NEGOTIATION. AS NEGOTIATION DID NOT GO THROUGH, THE ASSESSEE HAD RETURNED THE AMOUNTS I N CASH BETWEEN 27.05.2005 AND 25.07.2005. IT WAS A SUBMISSION THA T AS THE ASSESSEE HAD TAKEN THE LOAN AND RETURNED THE SAME IN CASH, T HE AO HAD ALLEGED VIOLATION OF THE PROVISIONS OF SEC.269SS AND 269T A ND HAD CONSEQUENTLY LEVIED PENALTY EQUAL TO THE AMOUNT OF THE LOAN TAKE N AND THE LOAN RE-PAID. IT WAS A SUBMISSION THAT BEFORE THE AO, THE ASSESSE E HAD SPECIFICALLY ITA NO.2026/MDS/2015 & ITA NO.1097/MDS/2017 :- 3 -: GIVEN THE DETAILS OF THE TRANSACTION BEING THE NEGO TIATION FOR THE PURCHASES OF THE IMMOVABLE PROPERTY WHICH WAS BEING UNDERTAKE N. IT WAS A SUBMISSION THAT AS THE TRANSACTIONS DID NOT GO THRO UGH, THE ASSESSEE HAD RETURNED THE MONEY. IT WAS A SUBMISSION THAT THE L OAN TAKEN WAS TO AN EXTENT OF RS.3,75,000/- AND THE PENALTY LEVIED U/S. 271D AND 271E ARE CONSOLIDATED AMOUNT OF RS.11.00 LAKHS WHICH INCLUDE D A LOAN OF RS.5.00 LAKHS RE-PAID BY THE ASSESSEE TO HER HUSBAND ON 31. 03.2006. IT WAS A SUBMISSION THAT THE ASSESSEE HAD NOT USED THE MONEY FOR ANY OTHER PURPOSE BUT THE SAME WAS MAINTAINED IN THE CASH BOO K. IT WAS A SUBMISSION THAT THE GENUINENESS OF THE TRANSACTION HAS ALSO NOT BEEN DISPUTED BY THE AO IN SO FAR AS NO ADDITION ON ACCO UNT OF THE SAME HAS BEEN MADE IN THE ASSESSMENT. IT WAS A SUBMISSION T HAT THE AO RECOGNIZES THAT THE TRANSACTIONS ARE RECORDED IN TH E CASH BOOK AND IT REMAINS IDLE WITH THE ASSESSEE TILL IT WAS RETURNED . IT WAS A SUBMISSION THAT THE AO HAD NOT FOUND THE EXPLANATION GIVEN BY THE ASSESSEE TO BE FALSE. IT WAS A SUBMISSION THAT THE AO HAD LEVIED PENALTY ONLY ON THE GROUND THAT THE AMOUNTS HAVE BEEN RECEIVED ON VARIO US DATES AND NO ADVANCE WAS PAID TO THE SELLER AND WHY THERE WAS DE LAY IN RE-PAYMENT IF THE DEAL DID NOT GO THROUGH. IT WAS A SUBMISSION T HAT THE AMOUNTS WERE TAKEN ON VARIOUS DATES AS AND WHEN THE RELATIVES WE RE ABLE TO GIVE THE MONEY AND NO ADVANCE WAS PAID TO THE SELLER BECAUSE THE ASSESSEE WAS STILL IN THE PROCESS OF NEGOTIATIONS AND THE DELAY IN RE-PAYMENT WAS BECAUSE THE NEGOTIATIONS WERE GOING ON AND ONLY WHE N IT WAS CLEAR THAT THE DEAL WOULD NOT GO THROUGH THE AMOUNTS WERE RE-P AID BACK ITA NO.2026/MDS/2015 & ITA NO.1097/MDS/2017 :- 4 -: IMMEDIATELY. IT WAS A SUBMISSION THAT THE PENALTY AS LEVIED BY THE AO AND AS CONFIRMED BY THE LD.CIT(A) MAY BE DELETED. 5. IN REPLY, THE LD.DR VEHEMENTLY SUPPORTED THE ORD ER OF THE AO AND THE CIT(A). IT WAS A SUBMISSION THAT THE ASSESSEE HAD VIOLATED THE PROVISIONS OF SEC.269SS & SEC.269T AND CONSEQUENTLY , THE PENALTY WAS LIABLE TO BE CONFIRMED. 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE PENALTY ORDER SHOWS THAT THE ASSESSEE HAS GIVEN THE EXPLANA TION FOR THE REASON FOR TAKING AND REPAYING THE LOANS IN CASH. THE LOANS H AVE BEEN TAKEN FROM THE VERY CLOSE RELATIVES WITH WHOM THE ASSESSEE IS ALSO RESIDING AND THE GENUINENESS OF THE LOANS IS ALSO NOT IN DISPUTE. T HE EXPLANATION GIVEN BY THE ASSESSEE IS ALSO NOT FOUND TO BE FALSE. ANY EX PLANATION GIVEN BY THE ASSESSEE CAN BE DISBELIEVED BUT BY JUST DISBELIEVIN G THE EXPLANATION, IT DOES NOT MAKE THE EXPLANATION GIVEN BY THE ASSESSEE AS FALSE OR IMPROBABLE OR IMPLAUSIBLE. UNLESS, THE EXPLANATION IS FOUND TO BE FALSE OR THE TRANSACTION IS FOUND TO BE NOT GENUINE, NORMALL Y PENALTIES ARE NOT LEVIED. ADMITTEDLY, THERE IS AN EXPRESS PROHIBITIO N ON TAKING OR RETURN OF LOAN IN EXCESS OF PRESCRIBED LIMIT. HOWEVER, THE P ENALTIES U/S.271D & 271E ON ACCOUNT OF THIS VIOLATION U/S.269SS & SEC.2 69T IS CONTROLLED BY THE PROVISIONS OF SEC.273B. THIS PROVIDES FOR NON- LEVY OF THE PENALTY, IF A REASONABLE CAUSE IS SHOWN. IN THE PRESENT CASE, TH E ASSESSEES EXPLANATION HAVING BEEN NOT SHOWN TO BE FALSE OR IM PROBABLE OR ITA NO.2026/MDS/2015 & ITA NO.1097/MDS/2017 :- 5 -: IMPLAUSIBLE AND THE TRANSACTION HAVING BEEN FOUND T O BE GENUINE, IN VIEW OF THE PRINCIPLES LAID DOWN BY THE HONBLE JURISDIC TIONAL HIGH COURT IN THE CASE OF CIT V. SMT. M.YESHODA REPORTED IN 351 ITR 2 65, WE ARE OF THE VIEW THAT THE PENALTIES LEVIED U/S.271D & U/S.271E ARE LIABLE TO BE CANCELLED IN SO FAR AS THE ASSESSEE HAS GIVEN A REA SONABLE EXPLANATION AND HAS SHOWN THE REASONABLE CAUSE AND WE DO SO. 7. IN THE RESULT, THE APPEALS FILED BY THE ASSESSE E ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON SEPTEMBER 27 , 2017, AT CHENNAI. SD/- SD/- ( . ) ( ABRAHAM P GEORGE, ) /ACCOUNTANT MEMBER ( ' ) (GEORGE MATHAN) % /JUDICIAL MEMBER /CHENNAI, 2 /DATED: SEPTEMBER 27, 2017. TLN + )%34 54 /COPY TO: 1. ( /APPELLANT 4. 6 /CIT 2. )*( /RESPONDENT 5. 4 )%% /DR 3. 6 ( ) /CIT(A) 6. ' /GF