M/s S.R.Associated Construction Co (P) Ltd., Kolkata V. J.C.I.T Range - Malda., Malda

ITA 209/KOL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 5082 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-04-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 31-01-2013
• Court: TRIBUNAL
• Department Lawyers: RAJENDRA PRASAD
• Assessee Lawyers: P K HIMMATSINGHKAFCA LD
• Keywords: Income from undisclosed sources; Bonafide belief; Question of law; Reasonable cause
• Section: 273B; 143(3)

Judgement Text

ITA NOS.209-210/K/2013-B-AM M/S. S.R ASSOCIATED CONSTRUCTION CO.PVT. LTD 1 IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, K OLKATA BEFORE : SHRI N.V.VASUDEVAN, JUDICIAL MEMBER , AND SHRI M. BALAGANESH, ACCOUNTAN T MEMBER ITA NOS.209 & 210/KOL/2013 A.Y : 2007-08 M/S. S.R ASSOCIATED CONSTRUCTION VS. JCIT, RANGE- MALDA, MALDA CO.PVT. LTD. PAN: AAECS 4066M (APPELLANT) (RE SPONDENT) FOR THE APPELLANT/ASSESSEE: SHRI P.K . HIMMATSINGHKA,FCA, LD.AR FOR THE RESPONDENT/DEPARTMENT: S HRI RAJENDRA PRASAD, JCIT, LD.SR.DR DATE OF HEARING: 05-04-2016 DATE OF PRONOUNCEMENT: 8- 4 -20 16 ORDER SHRI M.BALAGANESH, AM THESE APPEALS OF THE ASSESSEE ARISE OUT OF THE C OMMON ORDER OF THE LEARNED CIT(A), JALPAIGURI IN APPEAL NOS. 23& 24 /MLD/CIT( A)/JAL/12-13 DATED 26.11.2012 AGAINST THE PENALTY ORDERS FRAMED BY THE LEARNED AO FOR THE ASST YEAR 2007-08 U/S 271D AND 271E OF THE INCOME TAX ACT, 19 61 (HEREINAFTER REFERRED TO AS THE ACT). ITA NO. 210/KOL/2013 A.Y 2007-08 PENALTY U/S 271D 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER PENALTY U/S 271D OF THE ACT COULD BE LEVIED FOR VIOLATION OF PROVISIONS OF SECTION 269SS OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASSE SSEE IS A PRIVATE LIMITED COMPANY ENGAGED IN THE BUSINESS OF CIVIL CONSTRUCTION WORKS . THE ASSESSEE HAD AVAILED BANK ITA NOS.209-210/K/2013-B-AM M/S. S.R ASSOCIATED CONSTRUCTION CO.PVT. LTD 2 LOAN FROM PUNJAB NATIONAL BANK (PNB) FOR THE PURPO SE OF ITS BUSINESS AND COULD NOT REPAY THE DUES TO THE BANK AND THEREBY THE SAID LOA N ACCOUNT WAS CLASSIFIED AS NON- PERFORMING ASSETS (NPA) BY PNB. THE SAID LOAN WAS ASSIGNED BY PNB IN FAVOUR OF ASSET RECONSTRUCTION CO. INDIA LTD (ARCIL) AND ASSE SSEE WAS DIRECTED TO SETTLE THE DUES AND HAVE FURTHER NEGOTIATIONS WITH ARCIL. ACCO RDINGLY, A MEMORANDUM OF UNDERSTANDING (MOU) ON 5.7.2006 WAS ENTERED INTO BE TWEEN ARCIL REPRESENTED BY ITS CONSTITUTED ATTORNEY M/S USHA MARTIN FINANCE LI MITED (UMFL) AND THE ASSESSEE. MR.ASHOK KUMAR SARDA, ONE OF THE DIRECTORS OF THE C OMPANY, HAD MORTGAGED HIS PERSONAL PROPERTY WHICH WAS OFFERED AS SECURITY FOR THE LOAN GIVEN TO THE ASSESSEE COMPANY BY THE BANK. THIS MORTGAGE WAS ALSO ASSIG NED IN FAVOUR OF ARCIL. AS AGAINST THE BALANCE DUE OF RS. 57.58 LAKHS WITH INT EREST THEREON AS ON 31.3.2002, THE ASSESSEE AGREED TO PAY RS. 45 LAKHS AS FULL AND FIN AL SETTLEMENT TO UMFL , LAWFUL ATTORNEY OF ARCIL PURSUANT TO MOU. THE MOU CLEARLY STIPULATES THE CONDITIONS FOR REPAYMENT AS FOLLOWS:- A) RS 1 LAKH IN CASH AT THE TIME OF SIGNING OF THIS AGREEMENT B) RS 4 LAKHS PAID BY PAY ORDER NO. 024079 DT 23.6. 2006 DRAWN ON UTI BANK, SALT LAKE BRANCH , THE RECEIPT OF WHICH HAS BEEN ACKNOWL EDGED C) BALANCE RS 40 LAKHS TO BE SETTLED EITHER BY PAYM ENT IN CHEQUE OR BY SALE OF SECURED LANDED PROPERTY SITUATED AT MALDA SUBJECT TO PRIOR CONSENT OF ARCIL 3.1. THE MOU ALSO STIPULATES THAT ALL PAYMENTS SHO ULD BE MADE THROUGH BANKERS CHEQUE / DEMAND DRAFT DRAWN IN FAVOUR OF ARCIL-SBP S-004-IV TRUST. THE ASSESSEE COMPANY NEGOTIATED WITH UMFL AND FINALLY T HE LIABILITY ON ACCOUNT OF PNB LOAN WAS SETTLED AT RS. 38 LAKHS. THE SECURED LAN DED PROPERTY SITUATED AT MALDA REFERS TO AGRICULTURAL LANDS BELONGING TO MR.ASHOK KUMAR S ARDA, DIRECTOR OF THE ASSESSEE COMPANY. THE SAID LANDS WHICH WERE SUBJECTED TO M ORTGAGE WERE RELEASED BY ARCIL IN ORDER TO EFFECT THE SALE. MR.ASHOK KUMAR SARDA SOLD HIS AGRICULTURAL LANDS AND THE BUYER OF THE LANDS ISSUED PAY ORDERS DIRECTLY IN FA VOUR OF ARCIL-SBPS-004-IV ITA NOS.209-210/K/2013-B-AM M/S. S.R ASSOCIATED CONSTRUCTION CO.PVT. LTD 3 TRUST ON BEHALF OF THE ASSESSEE COMPANY AND HANDED OVER THE PAY ORDERS TO ASSESSEE COMPANY FOR RS. 17,25,000/- AS POINTED OUT BY THE L EARNED AO AT PAGE 5 OF THE ORDER LEVYING PENALTY. THESE PAY ORDERS FOR RS. 17,25,0 00/- WERE LATER ON HANDED OVER BY THE ASSESSEE COMPANY TO UMFL AS PER THE MOU, WHICH FACT IS ALSO POINTED OUT BY THE LEARNED AO AT PAGE 5 OF THE ORDER LEVYING PENALTY. THE RECEIPT OF MONIES WERE DULY ACKNOWLEDGED BY UMFL VIDE ITS MONEY RECEIPT DATED 2 6.9.2006. FOR THIS TRANSACTION, THE ASSESSEE COMPANY NEED TO RESPOND IN THEIR BOOKS BY KNOCKING OFF THE LOAN LIABILITY TO PNB TO THE EXTENT OF RS. 17,25,00 0/- AND CORRESPONDINGLY CREDIT THE DIRECTOR ACCOUNT AS UNSECURED LOAN. THE ASSESSEE I NSTEAD OF PASSING A JOURNAL ENTRY IN ITS BOOKS , ROUTED THESE TRANSACTIONS AS CASH RECEI VED FROM DIRECTOR AMOUNTING TO RS. 17,25,000/- AND ALSO AMOUNT REPAID TO PNB BY CASH A MOUNTING TO RS. 17,25,000/- . THE RECEIPT ENTRY WAS ENTERED ON 13.9.2006 AS FOLLO WS:- ( IN RS.) CASH ACCOUNT DR 17,25,000 TO ASHOK KUMAR SARDA ACCOUNT 17,25,000 (BEING SALE PROCEEDS OF AGRI-LANDED PROPERTY OF AKS RECEIVED IN MODE OF DEMAND DRAFT IN FAVOUR OF UMFL) HERE AKS REFERS TO ASHOK KUMAR SARDA. 3.2. HENCE THE NARRATION CLEARLY STATES THAT THE S AID SUM REPRESENTS SALE PROCEEDS OF AGRICULTURAL LANDS OF MR ASHOK KUMAR SARDA WHICH WE RE RECEIVED IN DEMAND DRAFTS IN FAVOUR OF UMFL. THE LEARNED AO DOUBTED THE VERAC ITY OF THIS ENTRY AND STATED THAT THIS ENTRY HAS BEEN PASSED BY THE ASSESSEE IN ITS B OOKS ON 13.9.2006 WHICH IS PRIOR TO THE DATE MENTIONED IN THE MONEY RECEIPT BY UMFL AS 26.9.2006 AND ACCORDINGLY CONCLUDED THAT THIS RECEIPT TRANSACTION ON 13.9.200 6 IS TOTALLY SEPARATE FROM THE DEMAND DRAFTS HANDED OVER TO UMFL ON 26.9.2006. HE FURTHER STATED THAT THE NARRATION MENTIONED ABOVE APPEARS TO BE MISLEADING AND INCORRECT AND HE MADE AN ITA NOS.209-210/K/2013-B-AM M/S. S.R ASSOCIATED CONSTRUCTION CO.PVT. LTD 4 ALLEGATION THAT THE ASSESSEE HAD CHANGED THE SAID N ARRATION TO SUIT HIS NEEDS. BASED ON THESE OBSERVATIONS, HE INVOKED THE PROVISIONS OF SE CTION 269SS OF THE ACT FOR RECEIPT OF CASH LOANS EXCEEDING RS 20,000/- AND SHOW CAUSED THE ASSESSEE WHY PENALTY U/S 271D OF THE ACT SHOULD NOT BE LEVIED ON THE ASSESSE E. IN RESPONSE TO THIS, THE ASSESSEE STATED THAT THERE WAS NO FRESH RECEIPT OF CASH FROM ITS DIRECTOR TO THE TUNE OF RS. 17,25,000/- AND APART FROM REITERATING THE AFORESAI D FACTS ALSO STATED THAT THE ASSESSEE IS MAINTAINING A CURRENT ACCOUNT WITH ITS DIRECTOR MR ASHOK KUMAR SARDA AND ACCOUNTING ENTRIES PASSED IN THE BOOKS CANNOT BE TERMED AS LO AN OR DEPOSIT AND ACCORDINGLY THE PROVISIONS OF SECTION 269SS OF THE ACT WOULD NOT BE APPLICABLE. 3.3. THE LEARNED AO NOT CONVINCED WITH THE REPLIES FILED BY THE ASSESSEE PROCEEDED TO LEVY PENALTY U/S 271D OF THE ACT WHICH HAS BEEN UPH ELD BY THE LEARNED CIT(A) ON FIRST APPEAL. AGGRIEVED, THE ASSESSEE IS IN APPEA L BEFORE US ON THE FOLLOWING GROUNDS :- (1) THAT UNDER THE FACTS & CIRCUMSTANCES OF THE CAS E L'D CIT (A) ERRED IN CONFIRMING THE PENALTY U/S 271D IGNORING T HE REASONABLE CAUSE OF RECORDING THE RECEIPT OF SALE PROCEEDS ON BEHALF OF DIRECTOR IN THE COMPANY CASH BOOK AGAINST SALE OF A GRICULTURAL LAND BELONGING TO ONE OF THE DIRECTOR TO PAYOFF COM PANY'S BANK LOAN. (2) THAT THE JCIT & CIT (A) ERRED IN NOT CONSIDERIN G THE RETENTION OF SALE PROCEEDS AGAINST SALE OF AGRICULTURAL LAND OWNED BY ASHOK KUMAR SARDA, DIRECTOR OF THE COMPANY FOR ONWARD PAY MENT TO ASSETS CONSTRUCTION COMPANY IN SATISFACTION OF BANK LOAN AVAILED BY THE APPELLANT COMPANY. (3) THAT THE CIT (A) ERRED IN NOT CONSIDERING THE R ECEIPT OF BANK DRAFTS BY THE USHA MARTIN FINANCE LTD., BEING ASSET RECONSTRUCTION COMPANY ON BEHALF OF PUNJAB NATIONAL BANK, (LENDER) DIRECTLY FROM THE BUYERS OF AGRICULTURAL L AND BELONGING TO DIRECTOR IN SATISFACTION OF BANK LOAN GRANTED BY TH E BANK TO THE APPELLANT COMPANY. (4) THAT THE CIT (A) WAS UNJUSTIFIED, ARBITRARY AND UNLAWFUL IN IGNORING THE BOOK ENTRY WITHOUT CORRESPONDING RECEI PT OF CASH BEING PASSED THROUGH CASH BOOK AND CONSEQUENTLY ERR ED IN NOT CONSIDERING THE REASONABLE CAUSE AND TOTALITY OF FA CTS. ITA NOS.209-210/K/2013-B-AM M/S. S.R ASSOCIATED CONSTRUCTION CO.PVT. LTD 5 (5) THAT UNDER THE FACTS & CIRCUMSTANCES OF THE CAS E, THE APPELLANT NEITHER RECEIVED LOAN NOR DEPOSIT AND CON SEQUENTLY IMPOSITION OF PENALTY U/S 271D BY THE JCIT AND CONF IRMATION BY CIT(A) IS WHOLLY UNREASONABLE UNJUSTIFIED, PERVASIV E AND THEREFORE ORDER PASSED U/S 271D IS LIABLE TO BE ANN ULLED. (6) THAT THE CIT(A) WAS WRONG, VAGUE AND ARBITRARY IN CONFIRMING THE PENALTY ORDER ON IRRELEVANT POINTS OF FACTS, IG NORING THE FACTUAL. (7) THAT YOUR PETITIONER APPELLANT CRAVES THE RIGHT TO PUT ADDITIONAL GROUNDS AND / OR TO ALTER /AMEND /MODIFY THE PRESENT GROUNDS BEFORE OR AT THE TIME OF HEARING. 3.4. THE LEARNED AR REITERATED THE SUBMISSIONS MAD E BEFORE THE LOWER AUTHORITIES AND REFERRED TO THE RELEVANT PAGES OF THE PAPER BOOK CO NTAINING THE EVIDENCES OF THE AFORESAID FACTS. IN RESPONSE TO THIS, THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDERS OF THE LOWER AUTHORITIES. 3.5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIALS AVAILABLE ON RECORD INCLUDING THE PAPER BOOK FILED BY THE ASSESS EE. THE BASIC FACTS OF THE CASE REMAIN UNDISPUTED ARE NOT REITERATED HEREIN FOR THE SAKE OF BREVITY. WE FIND THAT THE ASSESSEE WAS UNDER A BONAFIDE BELIEF THAT THE TRANS ACTION NEED TO BE RESPONDED BY THE ASSESSEE IN ITS BOOKS ON THE DATE OF AGREEMENT ITSE LF WHICH IS 13.9.2006 AND ACCORDINGLY PASSED THE RECEIPT ENTRY ERRONEOUSLY IN THE CASH BOOK. THE ASSESSEE OUGHT TO HAVE ONLY RESPONDED BY PASSING A JOURNAL ENTRY I N ITS BOOKS OF ACCOUNTS. THERE IS NO DOUBT THAT THE DIRECTORS ACCOUNT SHOULD BE CREDITE D FOR THE AMOUNTS DISCHARGED BY HIM ON BEHALF OF THE ASSESSEE COMPANY. MOREOVER, WE FIND THAT THE TRANSACTIONS OF THE DIRECTOR WITH THE ASSESSEE COMPANY, THE SAME IS MAI NTAINED IN THE FORM OF A CURRENT ACCOUNT AND IT IS WELL ESTABLISHED THAT THE TRANSAC TIONS IN THE RUNNING CURRENT ACCOUNT WOULD NOT TAKE THE CHARACTER OF A LOAN OR DEPOSIT. IN THIS REGARD, WE FIND LOT OF FORCE IN THE CASE LAWS RELIED UPON BY THE LEARNED AR :- A) DECISION OF HONBLE MADRAS HIGH COURT IN THE CASE O F CIT VS IDHAYAM PUBLICATIONS LTD REPORTED IN 285 ITR 221 (MAD) ITA NOS.209-210/K/2013-B-AM M/S. S.R ASSOCIATED CONSTRUCTION CO.PVT. LTD 6 4. WE HEARD THE ARGUMENTS OF LEARNED COUNSEL FOR THE REVENUE. WE HAVE PERUSED THE MATERIALS AVAILABLE IN RECORD. ADM ITTEDLY MR. S.V.S. MANIAN WAS ONE OF THE DIRECTORS. THEREFORE THE ORDE R OF THE LOWER AUTHORITY CLEARLY SHOWS THAT THERE WAS A RUNNING CU RRENT ACCOUNT IN THE BOOKS OF ACCOUNT OF THE ASSESSEE IN THE NAME OF MR. S.V.S. MANIAN. MR. S.V.S. MANIAN USED TO PAY THE MONEY IN THE CURRENT ACCOUNT AND USED TO WITHDRAW THE MONEY ALSO FROM THE CURRENT ACCOUNT. T HE REVENUE SHOULD ESTABLISH THAT WHAT WAS RECEIVED BY THE ASSESSEE IS A LOAN OR DEPOSIT WITHIN THE MEANING OF SECTION 269SS. THE DEPOSIT AN D THE WITHDRAWAL OF THE MONEY FROM THE CURRENT ACCOUNT COULD NOT BE CON SIDERED AS A LOAN OR ADVANCE. FURTHER IT WAS ALSO FOUND THAT THE ASSESSE E FILED A LETTER DATED 29-9-1997, AND IN THAT LETTER HE EXPLAINED THAT THE AMOUNT RECEIVED FROM MR. S.V.S. MANIAN HAD BEEN SHOWN AS 'UNSECURED LOAN FROM DIRECTORS' IN THE BALANCE-SHEET. AS PER THE COMPANIES ACT, UNDER THE COMPANIES (ACCEPTANCE OF DEPOSITS) RULES, 1975, UNDER RULE 2( B)(IX), DEPOSIT DOES NOT INCLUDE ANY AMOUNT RECEIVED FROM A DIRECTOR OR A SHAREHOLDER OF A PRIVATE LIMITED COMPANY. THEREFORE THE TRANSACTION BETWEEN THE APPELLANT AND THE DIRECTOR-CUM-SHAREHOLDER IS NOT A LOAN OR D EPOSIT AND IT IS ONLY A CURRENT ACCOUNT IN NATURE AND NO INTEREST IS BEING CHARGED FOR THE ABOVE TRANSACTION. 5, IN THE FOREGOING CONCLUSIONS, WE ARE OF THE VIEW THAT SINCE THE SAID TRANSACTION DOES NOT FALL WITHIN THE MEANING OF LOA N OR ADVANCE, THERE IS NO VIOLATION OF SECTION 269SS OF THE INCOME TAX ACT . WE FIND NO ERROR IN THE ORDER OF THE TRIBUNAL AND THE SAME REQUIRES NO INTERFERENCE. HENCE, NO SUBSTANTIAL QUESTION OF LAW ARISES FOR CONSIDERATIO N OF THIS COURT. ACCORDINGLY, WE DISMISS THE ABOVE TAX CASE. NO COST S. B) DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBU NAL IN THE CASE OF KRISHNA KR. PATHAK (HUF) VS ITO REPORTED IN (2004) 90 TTJ 940 ( KOL. TRIB) IN ITA NO. 2486/KOL/2002 DATED 12.3.2004 IN THIS CASE, THERE WAS A CURRENT ACCOUNT BETWEEN THE ASSESSEE (HUF) AND THE KARTA AND THERE IS NO RELATION OF LENDER AND LENDEE OR DE POSITOR OR DEPOSITE BETWEEN THE TWO. THE TRANSACTION BETWEEN THEM WAS IN THE NATURE OF T EMPORARY ADJUSTMENT / ACCOMMODATION. IT WAS HELD THAT :- THE COCHIN BENCH OF THE TRIBUNAL HAS ALSO HELD IN M UTHOOT M.GEORGE BANKERS VS ACIT (1993) 46 ITD 10 (COCH) THAT TEMPORARY ACCOMMODATION ITA NOS.209-210/K/2013-B-AM M/S. S.R ASSOCIATED CONSTRUCTION CO.PVT. LTD 7 OR ADJUSTMENT BETWEEN SISTER CONCERN DOES NOT TANTA MOUNT TO LOAN OR DEPOSIT AND AS SUCH, THE TRANSACTIONS DO NOT ATTRAC T SECTION 269SS OF THE ACT. THE HYDERABAD BENCH OF THE TRIBUNAL HAS ALSO CONSIDERED THE SIMILAR ISSEUE IN THE CASE OF DILLU CINE ENTERPRISE S (P) LTD VS ADDL CIT (2002) 80 ITD 484 (HYD) WHEREIN THE DIRECTOR OF A PRIVATE LIMITED COMPANY MAINTAINED CURRENT ACCOUNT WITH THE COMPANY WHERE HE DEPOSITED AND WITHDREW FUNDS AS PER EXIGENCIES OF T HE COMPANY. IT WAS HELD THAT SUCH TRANSACTIONS HAD NOTHING TO DO WITH EVASION OF TAX OR CONCEALMENT OF INCOME AND THE TRANSACTIONS DID NOT FALL WITHIN THE MISCHIEF SOUGHT TO BE REMEDIED BY SECTION 269SS OF THE ACT. THE PUNE BENCH OF THE TRIBUNAL IN THE CASE OF SUN FLOWER BUI LDERS (P) LTD VS DCIT (1997) 61 ITD 227 (PUNE TRIB) HELD THAT ACKNOWLEDGEMENT OF DEBT BY THE ASSESSEE COMPANY BY PASSING A JOURNAL ENTRY IN ITS BOOKS OF ACCOUNTS WOULD NOT COME WITHIN THE AMBIT OF THE WORDS LOAN OR DEPOSIT AS MENTIONED IN SECTION 269SS OF THE ACT . C) DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF ORANGE SECURITIES PVT LTD VS DCIT IN ITA NO. 1913 & 1914/KOL/2010 DA TED 24.5.2011, WHEREIN IT WAS HELD THAT : 6. AFTER HEARING THE RIVAL SUBMISSIONS AND ON PERUS AL OF THE MATERIALS AVAILABLE ON RECORD KEEPING IN VIEW OF THE FACT THA T THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS IDHAYAM PUBLICATIO NS LTD CITED SUPRA HAS HELD AS UNDER:- HELD, DISMISSING THE APPEAL, THAT THE TRANSACTION BETWEEN THE ASSESSEE AND THE DIRECTOR CUM-SHAREHOLDER WAS NOT A LOAN OR DEPOSIT AND IT WAS ONLY A CURRENT ACCOUNT IN NATURE AND NO INTEREST WAS BEING CHARGED FOR THE ABOVE TRANSACTION. THE D ELETION OF PENALTY WAS JUSTIFIED. 6.1. RESPECTFULLY FOLLOWING THE SAME, WE FIND NO J USTIFICATION ON THE PART OF THE REVENUE TO LEVY PENALTY EITHER U/S 271D OR 2 71E OF THE IT ACT IN RESPECT OF THE TRANSACTIONS MADE BY THE ASSESSEE CO MPANY WITH ONE OF THE DIRECTORS. THEREFORE, WE DELETE THE PENALTY LEVIED BY THE REVENUE AUTHORITIES AND ALLOW THE APPEALS OF THE ASSESSEE. 3.6. WE FIND THAT THE ASSESSEE INSTEAD OF MERELY R ESPONDING BY WAY OF JOURNAL ENTRY ON 26.9.2006 IN ITS BOOKS, HAD ERRONEOUSLY PASSED A RE CEIPT ENTRY AND A PAYMENT ENTRY IN ITA NOS.209-210/K/2013-B-AM M/S. S.R ASSOCIATED CONSTRUCTION CO.PVT. LTD 8 ITS CASH BOOK. HENCE THE ENTIRE PENALTY PROCEEDIN GS HAD BEEN TRIGGERED ONLY BASED ON MERE BOOK ENTRIES OF THE ASSESSEE AND THERE IS NO C ATEGORICAL FINDING THAT THE ASSESSEE INDEED HAD RECEIVED CASH FROM THE DIRECTOR WHEN THE ASSESSEE HAD ACTUALLY DENIED THE SAME. WE ALSO FIND THAT INDEPENDENT EXAMINATION OF THE DIRECTOR WAS MADE BY THE LEARNED AO TO ASCERTAIN THE TRUE FACTS, WHEREIN THE DIRECTOR HAD CATEGORICALLY STATED ON OATH THAT HE NEITHER HAD ANY CASH BALANCE OR PAID A NY CASH LOAN TO THE COMPANY. WE ALSO FIND THAT MERELY BY PASSING ONE RECEIPT ENTRY IN CASH BOOK AND ONE PAYMENT ENTRY IN CASH BOOK FOR THE SAME SUM OF RS. 17,25,000/-,NO ADDITIONAL SOURCE OF CASH HAD EMANATED TO THE ASSESSEE, WHICH FACT IS QUITE EVIDE NT FROM THE RELEVANT PAGES OF THE CASH BOOK ITSELF, FORMING PART OF THE PAPER BOOK FI LED BEFORE US. WE FIND THAT THE CLOSING CASH BALANCE AS ON 26.9.2006 WAS ONLY RS. 1 3,17,466.11 AND IT HAD NOT INCREASED BY RS. 17,25,000/- AS ALLEGED BY THE LEAR NED AO. 3.7. FROM THE TOTALITY OF THE FACTS AND CIRCUMSTAN CES OF THE CASE, WE ARE CONVINCED THAT THERE IS NO CASE FOR INVOKING THE PROVISIONS OF SEC TION 269SS OF THE ACT AND HENCE THE PENALTY LEVIED U/S 271D FOR VIOLATION OF SECTION 26 9SS OF THE ACT THEREON IS QUASHED HEREWITH. ACCORDINGLY THE APPEAL OF THE ASSESSEE I N ITA NO. 210/KOL/2013 IS ALLOWED. ITA NO. 209/KOL/2013 A.Y 2007-08 PENALTY U/S 271E 4. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS AS TO WHETHER PENALTY U/S 271E OF THE ACT COULD BE LEVIED FOR VIOLATION OF PROVISIONS OF SECTION 269T OF THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 4.1. THE BRIEF FACTS OF THIS ISSUE IS THAT THE ASS ESSEE HAD MADE THE FOLLOWING PAYMENTS IN CASH TO ITS DIRECTOR MR.ASHOK KUMAR SARDA ON THE FOLLOWING DATES :- (RS.) (RS.) 20.11.2006 4,50,000 23.11.2006 4,00,000 11.12.2006 8,75,000 --------------- 17,25,000 ITA NOS.209-210/K/2013-B-AM M/S. S.R ASSOCIATED CONSTRUCTION CO.PVT. LTD 9 THE ASSESSEE HAD WRITTEN THE FOLLOWING NARRATION FO R THE AFORESAID PAYMENTS :- CASH PAID TO AKS FOR PAYING BUYER OF THE AGRI-LAND OF AKS AGAINST THE LAND SALE AGREEMENT KEPT IN ABEYANCE HERE AKS REFERS TO ASHOK KUMAR SARDA. 4.2. THE ASSESSEE CLAIMED THAT THE SAID PAYMENTS W ERE MADE TO ITS DIRECTOR OUT OF BALANCES PAYABLE IN THE CURRENT ACCOUNT OF THE DIRE CTOR AS THE SAID MONIES WERE TO PAID BACK BY THE DIRECTOR TO THE BUYERS OF THE AGRICULTU RAL LANDS AS THE REGISTRATION OF SALE DEEDS WERE KEPT IN ABEYANCE FOR REMOVAL OF CERTAIN DEFECTS IN THE SAID LAND PURCHASE DEED. ULTIMATELY THE DEFECTS WERE DULY REMOVED AN D THE REGISTRATION OF AGRICULTURAL LANDS WAS EXECUTED ON 19.2.2007. 4.3. THE ASSESSEE CLAIMED THAT THE ASSESSEE WAS DU LY NECESSITATED TO PAY THE MONIES TO ITS DIRECTOR BY CASH FOR ONWARD TRANSMISSION IN CAS H BY THE DIRECTOR TO VARIOUS PERSONS WHO HAD ORIGINALLY AGREED TO BUY THE AGRICULTURAL L ANDS FROM THE DIRECTOR (MR. ASHOK KUMAR SARDA). IN FACT THE ASSESSEE HAD DULY WITHDRA WN CASH FROM ITS BANK AND IMMEDIATELY PASSED ON THE SAME TO ITS DIRECTOR FOR THE PURPOSE STATED ABOVE. APART FROM THIS, THE ASSESSEE WAS ALSO HAVING SUFFICIENT CASH BALANCE TO MAKE PAYMENTS TO ITS DIRECTOR. THE ASSESSEE TRIED TO EXPLAIN THAT THE ASSESSEE HAS GOT REASONABLE CAUSE IN TERMS OF SECTION 273B OF THE ACT IN THE AFORESAID F ACTS AND CIRCUMSTANCES AND ACCORDINGLY PRAYED FOR DROPPING THE PENALTY PROCEED INGS U/S 271E OF THE ACT. THE LEARNED AO NOT CONVINCED WITH THE ARGUMENTS OF THE ASSESSEE PROCEEDED TO LEVY PENALTY U/S 271E OF THE ACT. ON FIRST APPEAL, THE SAME WAS EVEN UPHELD BY THE LEARNED CIT(A). AGGRIEVED, THE ASSESSEE IS IN APPEA L BEFORE US ON THE FOLLOWING GROUNDS:- ITA NOS.209-210/K/2013-B-AM M/S. S.R ASSOCIATED CONSTRUCTION CO.PVT. LTD 10 (1) THAT UNDER THE FACTS & CIRCUMSTANCES OF THE CA SE L'D CIT (A) ERRED IN CONFIRMING THE PENALTY U/S 271E DESPITE NO LOAN 1 DEPOSITS WERE REPAID IN CONTRAVENTION TO SECTION 269T. (2) THAT UNDER THE FACTS & CIRCUMSTANCES OF THE CA SE L'D CIT (A) ERRED IN CONFIRMING THE PENALTY U/S 271E IGNORING THE REA SONABLE CAUSE & FACTUAL POSITION BEING RETURN OF CASH TO THE BUYERS OF AGRICULTURAL LAND (MORTGAGED TO PUNJAB NATIONAL BANK AGAINST CREDIT F ACILITIES TO THE APPELLANT COMPANY) UPON NON EXECUTION OF SALE DOCUM ENT DUE TO MINOR DEFECT IN THE SOURCE PURCHASE DEED. (3) THAT THE APPELLANT DIDN'T REPAY ANY LOAN IN CO NTRAVENTION TO SEC. 269T AND CONSEQUENTLY JCIT & CIT (A) ORDER TO THIS EFFECT ARE WHOLLY ARBITRARY, UNJUST, UNCALLED FOR AND LIABLE TO BE QU ASHED SPECIFICALLY WHEN NO CORRESPONDING LOAN OF RS. 17,25,0001- WAS RECEIV ED BY THE APPELLANT COMPANY. (4) THAT YOUR PETITIONER APPELLANT CRAVES THE RIGH T TO PUT ADDITIONAL GROUNDS AND 1 OR TO ALTER / AMEND / MODIFY THE PRES ENT GROUNDS BEFORE OR AT THE TIME OF HEARING. 4.4. THE LEARNED AR ADDUCED HIS ARGUMENTS IN THREE FOLD. FIRSTLY, HE ARGUED THAT THE ASSESSEE HAD DULY PROVED THE REASONABLE CAUSE IN TE RMS OF SECTION 273B OF THE ACT AS IT WAS DULY NECESSITATED TO MAKE PAYMENTS TO ITS DIREC TOR IN CASH FOR ONWARD TRANSMISSION TO THE BUYERS OF AGRICULTURAL LANDS. SECONDLY, HE ARGUED THAT THE PAYMENTS WERE MADE OUT OF CREDIT BALANCES LYING IN THE CURRENT ACCOUNT OF THE DIRECTOR AND ARGUED THAT CURRENT ACCOUNT TRANSACTIONS WOULD NOT FALL WITHIN THE AMBIT OF LOAN OR DEPOSIT. THIRDLY, HE ARGUED THAT THE MAIN PURPOSE OF INTRODU CTION OF PROVISIONS OF SECTION 269SS AND 269T OF THE ACT IS TO AVOID EVASION OF TA X BY WAY OF PARTIES ROUTING THEIR UNDISCLOSED INCOME IN THE GARB OF LOANS FROM VARIOU S PARTIES AND WERE ALSO ABLE TO OBTAIN FALSE CONFIRMATION FROM THOSE PARTIES AND ES CAPE FROM TAXATION. IN THE INSTANT CASE, THE ASSESSEE AS WELL AS THE DIRECTOR HAD DULY ACCOUNTED FOR THE CASH TRANSACTIONS IN THEIR RESPECTIVE BOOKS OF ACCOUNTS AND THE MAIN INTENTION BEHIND INTRODUCTION OF THE SAID PROVISIONS FAIL AND HENCE NO PENALTY COULD BE LEVIED. IN RESPONSE TO THIS, THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDERS OF THE L OWER AUTHORITIES. ITA NOS.209-210/K/2013-B-AM M/S. S.R ASSOCIATED CONSTRUCTION CO.PVT. LTD 11 4.5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE MATERIALS AVAILABLE ON RECORD. THE FACTS STATED HEREINABOVE INCLUDING TH E ARGUMENTS OF THE LEARNED AR REMAIN UNDISPUTED AND HENCE THE SAME ARE NOT REITER ATED HEREIN FOR THE SAKE OF BREVITY. WE FIND LOT OF FORCE IN THE MULTIPLE ARGUMENTS ADVA NCED BY THE LEARNED AR. WE HAVE ALREADY HELD THAT THE TRANSACTIONS BETWEEN THE ASSE SSEE AND ITS DIRECTOR ARE MAINTAINED IN A CURRENT ACCOUNT WHICH WOULD NEITHER BE CATEGOR IZED AS A LOAN OR DEPOSIT. WE HAVE ALREADY RELIED ON THE VARIOUS DECISIONS IN THIS REG ARD HEREINABOVE IN SUPPORT OF THIS PROPOSITION. HENCE THE PROVISIONS OF SECTION 269T OF THE ACT CANNOT BE APPLIED IN THE FACTS OF THE INSTANT CASE. 4.5.1. WE ALSO FIND THAT THE ASSESSEE WAS DULY NEC ESSITATED BY FORCE TO MAKE THE PAYMENTS IN CASH TO ITS DIRECTOR FOR THE REASONS ST ATED ABOVE. HENCE WE FIND THAT THE ASSESSEE HAD DULY ADDUCED REASONABLE CAUSE IN TERMS OF SECTION 273B OF THE ACT AND HENCE NO PENALTY COULD BE LEVIED U/S 271D OF THE AC T. 4.5.2. WE ALSO FIND THAT THERE IS NOTHING ON RECOR D THAT TRANSACTIONS MADE BY THE ASSESSEE IS NOT GENUINE AND THE AMOUNT INVOLVED WAS UNACCOUNTED. THE RETURN FILED BY THE ASSESSEE WAS ACCEPTED IN SCRUTINY ASSESSMENT PROCEEDINGS BY THE LEARNED AO U/S 143(3) OF THE ACT AND NO ADDITION WAS MADE TO P ROVE THAT THE ASSESSEE HAD ROUTED ITS UNDISCLOSED INCOME IN THE FORM OF LOAN TRANSACT IONS. WE FIND THAT THE TRANSACTIONS OF THE ASSESSEE WITH ITS DIRECTOR HAS NOTHING TO DO WITH EVASION OF TAX OR CONCEALMENT OF INCOME. IN THIS REGARD, WE PLACE RELIANCE ON T HE DECISION OF THE CO-ORDINATE BENCH OF JABALPUR TRIBUNAL IN THE CASE OF MAHESH PRASAD S ONI VS ADDL CIT REPORTED IN (2004) 86 TTJ 815 (JAB- TRIB) WHEREIN IT WAS HELD THAT :- 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN T HE CASE BEFORE US, THE ASSESSING OFFICER/COMMISSIONER (APPEALS) HAVE IMPOS ED PENALTY UNDER SECTION 271D OF THE ACT AS THE ASSESSEE HAS TAKEN O R ACCEPTED LOAN OR DEPOSITS OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT IN VIOLATION OF SECTION 269SS OF THE ACT. ITA NOS.209-210/K/2013-B-AM M/S. S.R ASSOCIATED CONSTRUCTION CO.PVT. LTD 12 7. THE PROVISIONS OF SECTIONS 269SS AND 269T WERE BROUGHT ON THE STATUTE BY THE FINANCE ACT, 1984, WITH EFFECT FROM, 1-4-198 4. THE INTENTION BEHIND BRINGING THE ABOVE PROVISIONS ON THE STATUTE WAS CL ARIFIED BY THE CBDT VIDE, ITS CIRCULAR NO. 387, DATED 6-9-1984 (REPORTED IN 1 46 ITR 162 (ST). THE RELEVANT PART OF THE CIRCULAR IS AS UNDER: 'UNACCOURITED CASH FOUND IN THE COURSE OF SEARCHES CARRIED OUT BY THE INCOME TAX DEPARTMENT IS OFTEN EXPLAINED BY TAXPAYE RS AS REPRESENTING LOANS TAKEN FROM OR DEPOSITS MADE BY T HE VARIOUS PERSONS. UNACCOUNTED INCOME IS ALSO BROUGHT INTO TH E BOOKS OF ACCOUNT IN THE FORM OF SUCH LOANS AND DEPOSITS, AND , TAXPAYERS ARE ALSO ABLE TO GET CONFIRMATORY LETTER FROM SUCH PERS ONS IN SUPPORT OF THEIR EXPLANATION. WITH A VIEW TO CIRCUMVENTING THIS DEVICE, WHICH ENA BLES TAXPAYERS TO EXPLAIN AWAY UNACCOUNTED CASH OR UNACCOUNTED DEPOSI TS, THE BILL SEEKS TO MAKE A NEW PROVISION IN THE INCOME TAX ACT DEBARRING PERSONS FROM TAKING OR ACCEPTING, AFTER 30-6-1984, FROM ANY OTHER PERSON ANY LOAN OR DEPOSITS OTHERWISE THAN BY AN AC COUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT IF THE AMOUNT OF SUCH LOAN OR THE AGGREGATE AMOUNT OF SUCH LOAN AND DEPOSIT IS RS. 10 ,000 OR MORE. THIS PROHIBITION WILL ALSO APPLY IN CASES WHERE ON THE DATE OF TAKING OR ACCEPTING SUCH LOAN OR DEPOSIT, ANY LOAN OR DEPO SIT TAKEN OR ACCEPTED EARLIER BY SUCH PERSON FROM THE DEPOSITOR IS REMAINING UNPAID (WHETHER REPAYMENT HAS FALLEN DUE OR NOT), A ND THE AMOUNT OR THE AGGREGATE AMOUNT REMAINING UNPAID IS RS. 10,000 OR MORE. THE PROPOSED PROHIBITION WOULD ALSO APPLY TO CASES WHER E THE AMOUNT OF SUCH LOAN OR DEPOSIT, TOGETHER WITH THE AGGREGATE A MOUNT REMAINING UNPAID ON THE DATE ON WHICH SUCH LOAN OR DEPOSIT PR OPOSED TO BE TAKEN, IS RS. 10,000 OR MORE' 8. KEEPING THE ABOVE CIRCULAR IN VIEW, THE HYDERAB AD BENCH OF THE TRIBUNAL IN CASE OF INDUSTRIAL ENTERPRISES V. DY. CIT (2000) 73 ITD 252 (HYD) IN PARA 17.2 OF ITS ORDER HELD AS UNDER: 'PROVISIONS OF SECTION 269SS WERE BROUGHT IN THE ST ATUTE BOOK TO COUNTER THE EVASION OF TAX IN CERTAIN CASES, AS CLE ARLY STATED IN THE HEADING OF CHAPTER XX -B OF THE INCOME TAX ACT, 196 1, WHICH READS REQUIREMENT AS TO MODE OF ACCEPTANCE, PAYMENT OR RE PAYMENT IN CERTAIN CASES TO COUNTERACT EVASION OF TAX LEGISLAT IVE. INTENTION IN BRINGING SECTION 269SS IN THE INCOME TAX ACT WAS TO AVOID CERTAIN CIRCUMSTANCES TO TAX EVASION, WHEREBY HUGE TRANSACT IONS ARE MADE OUTSIDE THE BOOKS OF ACCOUNT BY WAY OF CASH. AS FAR AS THE CASE ON HAND BEFORE US IS CONCERNED, THERE IS NO CASE AGAIN ST THE ASSESSEE-FIRM THAT THESE TRANSACTIONS HAD ANYTHING TO DO WITH EVA SION OF TAX OR ITA NOS.209-210/K/2013-B-AM M/S. S.R ASSOCIATED CONSTRUCTION CO.PVT. LTD 13 CONCEALMENT OF INCOME. AS RIGHTLY POINTED OUT BY TH E COMMISSIONER (APPEALS) HIMSELF, IT MAY BE A CASE OF NEGLIGENCE. BUT A NEGLIGENT PERSON DOES NOT HAVE ANY INTENTION OR MENSREA TO PU RPOSELY VIOLATE ANY PROVISION OF LAW, SO AS TO BE VISITED WITH STRI NGENT PUNISHMENT OF HEAVY PENALTY'. 9. THE SAME BENCH CONSIDERED THIS ISSUE IN THE CAS E OF DILLU LINE ENTERPRISES (P) LTD V. ADDL. CIT (2002) 80 ITD 484 (HYD). THE BENCH ORDERED AS FOLLOWS: 'WE FIND FORCE IN THE ARGUMENT OF THE LEARNED COUNS EL FOR THE ASSESSEE THAT THE OBJECT OF THE PROVISIONS BEING UNEARTHING OF UNACCOUNTED MONEY, IS NOT APPLICABLE TO ANY TRANSACTION WHICH I S DONE IN AN OPEN MANNER, WHICH IS GENUINE AND IN WHICH NO UNACCOUNTE D MONEY IS INVOLVED. MERE TECHNICAL BREACH OF THE PROVISIONS, WHILE THE TRANSACTIONS ARE HELD TO BE GENUINE, DO NOT ATTRACT THE PROVISIONS OF SECTION 269SS. IT IS NOT THE CASE OF THE REVENUE TH AT THE AMOUNTS INVOLVED WERE UNACCOUNTED TRANSACTION. IT IS AN UND ISPUTED FACT THAT THE TRANSACTIONS ARE GENUINE. THE CHAPTER XX-B AND SECTION 269SS BEGINS WITH THE HEADING-REQUIREMENT AS TO MODE OF A CCEPTANCE, PAYMENT OR REPAYMENT IN CERTAIN CASES TO COUNTERACT EVASION OF TAX. THE TERM 'CERTAIN' USED THEREIN, WHEN READ ALONG WI TH THE LEGISLATIVE INTENT OF CURBING TAX EVASION, CLEARLY MEANS THAT A LL LOANS ARE NOT ATTRACTED. THIS SECTION ATTRACTS ONLY 'CERTAIN' LOA NS THAT ARE BROUGHT IN BY THE TAXPAYER TO EXPLAIN AWAY HIS UNEXPLAINED CAS H OR UNACCOUNTED DEPOSIT. THIS SECTION IS DEFINITELY NOT INTENDED TO PENALIZE GENUINE TRANSACTIONS, WHERE NO TAX. EVASION IS INVOLVED. IT IS WELL SETTLED THAT THE HEADINGS PREFERRED TO SECTIONS OR SET OF SECTIO NS IN SOME MODERN STATUTES ARE REGARDED AS 'PREAMBLES' TO THOSE SECTI ONS. THIS VIEW WAS APPROVED BY FAREWELL I.J. IN FLETCHER V. BIRKENHEAD CORPN. (1907) 1 KB 205'. 10. KEEPING IN VIEW THE INTENT OF THE LEGISLATURE B EHIND ENACTING THE ABOVE SECTIONS, WE HOLD THAT THE LOANS/DEPOSITS BROUGHT IN BY THE ASSESSEE WERE NOT TO EXPLAIN HIS UNACCOUNTED CASH, AND, THEREFORE, TH E QUESTION OF VIOLATING THE PROVISIONS OF SECTION 269SS/269T DID NOT ARISE. WE MAY MENTION HERE THAT EVEN THERE IS NO SUGGESTION FROM THE REVENUE THAT B Y WAY OF ACCEPTING LOANS AND DEPOSITS IN CASH, THE ASSESSEE HAS INTRODUCED H IS UNACCOUNTED CASH IN THE GARB OF LOANS. 11. JABALPUR BENCH OF THE TRIBUNAL IN THE CASE OF C HAUDHARY CO. BHUJIAWALA (SUPRA) HAS ADJUDICATED SIMILAR ISSUE. THE TRIBUNAL HAS HELD THAT THE STAND TAKEN BY THE REVENUE THAT THE GENUINENESS OF THE DE POSITS/LOANS WAS NOT THE ITA NOS.209-210/K/2013-B-AM M/S. S.R ASSOCIATED CONSTRUCTION CO.PVT. LTD 14 RELEVANT FACTOR TO BE CONSIDERED FOR LEVY OF PENALT Y UNDER SECTION 271D WAS NOT WELL-FOUNDED AND WHILE REFERRING TO THE CBDT CI RCULAR NO. 387, DATED 6- 7-1984 EXPLAINING THE OBJECT OF INTRODUCING THE PRO VISIONS OF SECTIONS 269SS AND 269T OF THE ACT, IT WAS HELD THAT IT WAS NOT TH E INTENTION OF THE LEGISLATURE TO PENALIZE GENUINE FLOW OF FUNDS FOR MEETING THE U RGENT BUSINESS NECESSITIES. TRIBUNAL, PUNE BENCH, IN THE CASE OF MOTILAL J DOSH I(SUPRA) HAS HELD THAT WHERE THE LOAN RECEIVED IN CASH WAS FROM A RELATIVE OF THE PARTNER OF THE FIRM, THERE WAS A BONAJIDE BELIEF THAT SECTION 269S S VAS NOT ATTRACTED. THE CHANDIGARH BENCH OF THE TRIBUNAL IN THE CASE OF IN COME TAX OFFICER V. RAJENDRA TRADING CO. (1994) 48 ITD 210 (CHD) WHILE CANCELLING THE PENALTY UNDER SECTION 271 D HAD OBSERVED AS UNDER: 'AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI CRIMINAL PROCEEDINGS AND P ENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY IS OBLIGED E ITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CO NDUCT CONTUMACIOUS OR DISHONEST OR ACTED IN CONSCIOUS DISREGARD OF ITS OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFU L TO DO SO. EVEN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHORITY COMPET ENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PEN ALTY, WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FROM A BONA FIDE BELIEF THAT THE OFFEN DER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE.' 4.6. FROM THE TOTALITY OF THE FACTS AND CIRCUMSTA NCES OF THE CASE, WE ARE CONVINCED THAT THERE IS NO CASE FOR INVOKING THE PROVISIONS O F SECTION 269T OF THE ACT AND HENCE THE PENALTY LEVIED U/S 271E FOR VIOLATION OF SECTIO N 269T OF THE ACT THEREON IS QUASHED HEREWITH. ACCORDINGLY THE APPEAL OF THE ASSESSEE I N ITA NO. 209/KOL/2013 IS ALLOWED. 5. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 8 -4-2016. SD/- (N.V.VASUDEVAN, JUDICIAL MEMBER ) SD/- (M. BALAGANESH, ACCOUNTANT MEMBER) DATE: DATE 8 -4 -2016 ITA NOS.209-210/K/2013-B-AM M/S. S.R ASSOCIATED CONSTRUCTION CO.PVT. LTD 15 1.. THE APPELLANT/ASSESSEE: M/S. S.R ASSOCIATED CO NSTRUCTION CO.PVT. LTD AA-3 SALT LAKE, KOLKATA-64. 2 THE RESPONDENT/DEPARTMENT: THE JCIT, RANGE-MALDA, NETAJI MARKET, RATHBARI, MALDA 732101, WEST BENGAL. 3 /THE CIT, 4.THE CIT(A ) 5. DR, KOLKATA BENCH 6. GUARD FILE. TRUE COPY, BY ORDER, ASSTT REGISTRAR **PRADIP SPS COPY OF THE ORDER FORWARDED TO:-