ITO, New Delhi V. Sh. Mukesh Kumar Verma, New Delhi

ITA 2060/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4964 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-08-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 06-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Assessee Lawyers: BALBEER SINGH
• Keywords: Initiation of penalty proceedings
• Section: 27; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES SMC: NEW DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA.NO.2060/DEL./2017 ASSESSMENT YEAR 2007-2008 THE INCOME TAX OFFICER WARD-65(1), ROOM NO.203, B-BLOCK, CIVIC CENTRE, MINTO ROAD, NEW DELHI. VS. SHRI MUKESH KUMAR VERMA B-183, SHIVALIK, KHIRKL EXTENSION, MALVIYA NAGAR, NEW DELHI17. ANABCPV3730H (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI T. VASANTHAN, SR. D.R. FOR ASSESSEE : SHRI BALBEER SINGH DATE OF HEARING : 17.07.2017 DATE OF PRONOUNCEMENT : 24.08.2017 ORDER THIS APPEAL BY REVENUE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-21, NEW DELHI, DATED 18 TH JANUARY, 2017 FOR A.Y. 2007-2008, CANCELLING THE PENALTY UNDER SE CTION 271D OF THE I.T. ACT, 1961. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT IT WAS N OTICED BY THE AUTHORITIES BELOW THAT ASSESSEE HAS PAID IN CAS H AN AMOUNT OF RS.22,50,000 ON 22 ND FEBRUARY, 2007 TOWARDS THE DONATION / CAPITATION FEE FOR REGULAR COURSE FEES TO SANTOSH M EDICAL COLLEGE AND HOSPITAL, GHAZIABAD. THE RE-ASSESSMENT PROCEEDI NGS WERE 2 ITA.NO.2060/DEL./2017 SHRI MUKESH KUMAR VERMA, NEW DELHI. INITIATED. THE ASSESSEE SUBMITTED THAT RETURN ALREA DY FILED ON 23 RD JANUARY, 2008 DECLARING TAXABLE INCOME OF RS.1,32,5 60 MAY BE CONSIDERED AS RETURN FILED IN RESPONSE TO THE NOTIC E UNDER SECTION 148 OF THE I.T. ACT. THE A.O. AFTER MAKING ADDITION OF UNEXPLAINED LOAN OF RS.62,000 COMPUTED INCOME AT RS.1,94,560 VI DE ORDER DATED 22 ND MAY, 2014. THE A.O. VIDE SEPARATE ORDER LEVIED THE PENALTY UNDER SECTION 271D OF THE I.T. ACT FOR VIOL ATION OF SECTION 269SS OF THE I.T. ACT WITH REGARD TO CASH AMOUNT RE CEIVED OF RS.22,50,000. IT WAS OBSERVED BY THE A.O. THAT ASSE SSEE HAD TAKEN LOAN AMOUNTING TO RS.22,50,000 IN CASH IN VIO LATION OF PROVISIONS OF SECTION 271D OF THE I.T. ACT. 3. THE ASSESSEE FILED WRITTEN SUBMISSIONS BEFORE T HE LD. CIT(A) WHICH IS REPRODUCED IN THE APPELLATE ORDER I N WHICH ASSESSEE EXPLAINED THAT THE FUND FOR DONATION/CAPIT ATION FEE TO THE SAID COLLEGE WAS ARRANGED AS PER THE SUBMISSION OF THE ASSESSEE MOSTLY BY HIS WIFE MRS. SRADHA VARMA BY SE LLING HER JEWELLERY/ORNAMENTS/SREE DHAN AS WELL AS LOAN FROM VARIOUS RELATIVES AND FRIENDS AS THE CAREER OF HIS SON WAS AT STAKE. THE CONFIRMATION OF ALL THE PERSONS AND DOCUMENTARY EVI DENCES HAVE BEEN FILED. THE DONATION OF RS.22,50,000 WAS ARRANG ED BY HIS 3 ITA.NO.2060/DEL./2017 SHRI MUKESH KUMAR VERMA, NEW DELHI. WIFE WHO IS AN INCOME TAX PAYEE. THE LD. CIT(A) AFT ER CONSIDERING THE EXPLANATION IN DETAIL NOTED THAT THE MONEY TOWA RDS CAPITATION FEES WAS PAID JOINTLY BY ASSESSEE AND HIS WIFE FOR ADMISSION OF THEIR SON MR. RAHUL VARMA. THEREFORE, THERE IS NO Q UESTION OF TAKING ANY LOAN BY THE ASSESSEE. THE ASSESSEE NEVER ADMITTED RECEIVING ANY LOAN FROM HIS WIFE. ASSESSEE SUBMITTE D BEFORE THE A.O. THAT FUNDS HAVE BEEN ARRANGED BY HIS WIFE. THE REFORE, IT CAN BE TREATED AS LOAN. THE LD. CIT(A) THEREFORE, HELD THAT SINCE THE ASSESSEE HAS NOT RECEIVED ANY CASH LOAN OR DEPOSIT FROM HIS WIFE THEREFORE, THERE IS NO CONTRAVENING OF PROVISIONS O F SECTION 269SS AND ACCORDINGLY, PENALTY WAS CANCELLED. 4. AFTER HEARING LD. D.R. I DO NOT FIND ANY MERIT IN THE DEPARTMENTAL APPEAL. THE LD. CIT(A) ON FACTS FOUND THAT MONEY TOWARDS CAPITATION FEE WAS PAID JOINTLY BY ASSESSEE AND HIS WIFE TO THE MEDICAL COLLEGE FOR ADMISSION OF THEIR SON M R. RAHUL VARMA. THEREFORE, NO LOAN HAVE BEEN ACCEPTED BY THE ASSESSEE FROM HIS WIFE. FURTHER, A.O. HAS NOT DISCUSSED ANYT HING OF VIOLATION OF SECTION 269SS IN THE ASSESSMENT ORDER AS WELL AS DID NOT RECORD HIS SATISFACTION FOR VIOLATION OF SECTIO N 271D IN THE 4 ITA.NO.2060/DEL./2017 SHRI MUKESH KUMAR VERMA, NEW DELHI. ASSESSMENT ORDER. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. JAI LAXMI RICE MILLS (2015) 379 ITR 521(SC) HEL D AS UNDER : FOR THE ASSESSMENT YEAR 1992-93 , THE ASSESSMENT ORDER WAS PASSED ON THE ASSESSEE ON FEBRUARY 26, 1996, EX-PAR TE. WHILE FRAMING THE ASSESSMENT , THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD CONTRAVENED THE PROVISIONS OF SECTION 269SS OF THE INCOME-TAX ACT, 1961 , AND BECAUSE OF THIS THE ASSESS ING OFFICER WAS SATISFIED THAT PENALTY PROCEEDINGS UNDER SECTION 27 1D OF THE A C T WERE T O BE INITIATED. ON APPEAL, THE COMMISSIONER (APPEALS) BY ORDER DATED D EC E MBE R 5, 1996, SET ASIDE THE ASSESSMENT ORDER WITH A DIRECTION TO FRAME THE - AS SESSMENT DE NOVO AFTER AFFORDING ADEQUATE OPPORTUNITY TO THE ASSESSEE. MEANWH ILE PENA LTY UNDER SECTION 271D WAS LEVIED BY ORDER DATED SEPTEMBER 23, 1996, I . E ., BEFO R E THE APPEAL OF THE ASSESSEE AGAINST THE ORIGINAL ASSESSM ENT ORDER WAS HEARD A ND ALLO WED THEREBY SETTING ASIDE THE ASSESSMENT ORDER ITSE LF . AFTER REMAND, TH E ASS ES S I NG OFFICER PASSED A FRESH ASSESSMENT ORDER BUT IN THIS ASSESSMENT ORDER, NO SATISF AC TION REGARDING INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271D OF THE A CT W AS RECORDED. THE TRIBUNAL A S WELL AS THE HIGH COURT HELD THAT THE PENALTY O RDE R PASSED ON THE BASIS OF TH E O RIGINAL ASSESSMENT ORDER COULD NOT STILL SURVIV E W H EN THAT ASSESSMENT ORDER H AD B EE N SET ASIDE BECAUSE THE SATISFACTION RECORDED THEREIN FOR THE PURPOSE OF I N ITIATIO N O F THE PENALTY PROCEEDINGS WOULD ALSO NOT SUR V I VE. ON FURTHER APPEAL S : HELD, DISMISSING T H E APPEALS, THAT IN THE FRESH ASSESSMENT ORDER THERE WAS NO SATISFACTION RECORDED R E GARDING PENALTY PROCEEDINGS UNDER SECTION 271D OF THE ACT THOUGH IN THAT ORDER THE ASSESSING 5 ITA.NO.2060/DEL./2017 SHRI MUKESH KUMAR VERMA, NEW DELHI. OFFICER WANTED PENALTY PROCEEDING TO BE INITIATED U NDER SECTION 2 71 ( 1 )( C ) OF THE ACT . THUS, THE PENALTY UNDER SECTION 271D WAS WITHOUT ANY SAT IS FA CTI ON A N D , THEREFORE , NO SUCH PENALTY COULD BE LEVIED. 5. IN VIEW OF THE ABOVE, I DO NOT FIND ANY MERIT I N THE DEPARTMENTAL APPEAL AND THE SAME IS ACCORDINGLY DIS MISSED. ORDER PRONOUNCED IN THE OPEN COURT. (BHAVNESH SAINI) JUDICIAL MEMBER DELHI, DATED 24 TH AUGUST, 2017 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT SMC BENCH 6. GUARD FILE // BY ORDER // ASST. REGISTRAR ITAT : DELHI BENCHES : DELHI.