Sri V. Narayanan, Prop. Saraswathi Bus Service, CHENNAI V. The Joint CIT, Pondicherry

ITA 2161/CHNY/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 96051 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 9 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-09-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 09-09-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 13-12-2013
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: S SRIDHAR
• Keywords: Additional evidence; Reasonable cause
• Section: 273B; 133A; 2

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , JUDICIAL MEMBER I.T.A.NO S . 2160 AND 2161 /MDS/2013 ASSESSMENT YEAR :200 7 - 0 8 SHRI V. NARAYANAN, PROP: SARASWATHI BUS SERVICE, 28, SECOND CROSS, JAWAHAR NAGAR, NELLITHOPE, PONDICHERRY 605 005. [PAN: A BOPN0704D ] VS. THE JOINT COMMISSIONER OF INCOME TAX , PONDICHERRY RANGE, PONDICHERRY. ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI S. SRIDHAR , ADVOCATE / RESPONDENT BY : SHRI A.V. SREEKANTH, J CIT / DATE OF HEARING : 0 9 . 0 9 .201 5 / DA TE OF P RONOUNCEMENT : 16 . 0 9 .201 5 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : BOTH THE APPEAL S FILED BY THE SAME ASSESSEE ARE DIRECTED AGAINST DIFFERENT ORDER S OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) V I , CHENNAI , DATED 25 . 1 1 .20 1 3 AND 27.11.2013 PASSED UNDER SECTION 271D AND 271E OF THE INCOME TAX ACT, 1961 ( ACT IN SHORT) RESPECTIVELY RELEVANT TO THE ASSESSMENT YEAR 200 7 - 0 8 . I.T.A. NO S . 2 160 & 2161 /M/ 13 2 2. BRIEF FACTS OF THE CASE ARE THAT BASED ON THE SURVEY UNDER SECTION 133A OF THE ACT, A REFERENCE WAS RECEIVED FROM THE INCOME TAX OFFICER WARD I(1), PONDICHERRY DATED 20.02.2012 THAT THE ASSESSEE SHRI V. NARAYANAN HAS RECEIVED LOAN OF .15,00,000/ - FROM SHRI A. KANNAN IN CASH. THE ASSESSEE WAS SERVED A NOTICE UNDER SECTION 271D R.W.S. 269SS OF THE ACT AND CALLED FOR EXPLANATION AS TO WHY PENALTY SHOULD NOT BE LEVIED UNDER SECTION 271D OF THE ACT. ACCORDINGLY, THE ASSESSEE HAS SUBMITTED A DETAILED REPLY VIDE HIS LETTER DATED 27.08.201 2 BEFORE THE ASSESSING OFFICER AND SUBMITTED THAT THE ASSESSEE IS A BUS OPERATOR AND A CHRONIC DIABETIC PATIENT AND HIS KIDNEYS HAVE FAILED. HE HAS TO UNDERGO DIALYSIS TWICE A WEEK AND THE SAID LOAN IS STATED TO HAVE BEEN TAKEN TO LEND TO THE RELATIVE OF THE DIALYSIS TECHNICIAN WHO ASSISTS THE ASSESSEE IN HIS DIALYSIS. THE PERSON WHO RECEIVED THE LOAN IS AN AGRICULTURIST AND THE LOAN WAS REPAID BY THE SAID AGRICULTURIST OUT OF HIS AGRICULTURAL INCOME. IN THE P ENALTY ORDER, THE ASSESSING OFFICER HAS OBSERVED THAT THOUGH THE ASSESSEE HAS NOT DENIED HAVING TAKEN AND REPAID LOAN IN CASH, THE ASSESSEE S CONTENTION WAS THAT THE PENAL SECTIONS DO NOT APPLY IN GENUINE CASES. HE FURTHER OBSERVED THAT THE EXPLANATIONS OF FERED BY THE ASSESSEE HAVE NOT BEEN SUPPORTED WITH EVIDENCES TO HAVE ESTABLISHED A REASONABLE CAUSE CONTEMPLATED UNDER SECTION 273B OF THE ACT TO THE SATISFACTION OF THE ASSESSING AUTHORITY. ACCORDINGLY, THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271D R.W.S. 269SS OF THE ACT. I.T.A. NO S . 2 160 & 2161 /M/ 13 3 3. WITH REGARD TO THE PENALTY UNDER SECTION 271E OF THE ACT ALSO, THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HAS REPAID THE LOANS IN CASH. FURTHER, THE ASSESSEE HAS NOT SUBMITTED BOOKS OF ACCOUNT AND OTHER DOCUME NTS TO VERIFY THE POSITION OF CASH AVAILABILITY, THE URGENCY, THE UTILITY OR EVEN THE ADMISSION OF THE RECEIPTS AND REPAYMENT IN THE BOOKS OF ACCOUNT, THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HAS FAILED TO ESTABLISH REASONABLE CAUSE AS CONTEMPL ATED UNDER SECTION 273B OF THE ACT. ACCORDINGLY, THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTION 271 E R.W.S. 269T OF THE ACT. 4 . ON APPEAL BEFORE THE LD. CIT(A), THE ASSESSEE HAS REITERATED THE SUBMISSIONS AS MADE BEFORE THE ASSESSING OFFICER AND REQU ESTED NOT TO CONFIRM PENALTY UNDER SECTION 271D AND 271E OF THE ACT. BEFORE THE LD. CIT(A), THE AR OF THE ASSESSEE HAS FURNISHED THE AFFIDAVITS DATED 06.08.2013 FROM THE ASSESSEE, FROM SHRI A. KANNAN AND SRI M. VIJAYAKUMAR TO THE EFFECT THAT THE ASSESSEE H AS RECEIVED THE LOANS FROM SHRI A. KANNAN IN CASH AND THESE LOANS WERE PRIMARILY BORROWED FOR SHRI M. VIJAYAKUMAR. HOWEVER, THE LD. CIT(A) HAS OBSERVED THAT NO EVIDENCE WAS FURNISHED BEFORE THE ASSESSING OFFICER TO PROVE THAT THE LOAN WAS TAKEN TO LEND TO THE RELATIVE OF THE DIALYSIS TECHNICIAN WHO ASSISTS THE ASSESSEE IN HIS DIALYSIS. SINCE THE AFFIDAVITS DATED 06.08.2013 FILED BY THE ASSESSEE BEFORE THE LD. CIT(A) WERE I.T.A. NO S . 2 160 & 2161 /M/ 13 4 NOT AVAILABLE BEFORE THE ASSESSING OFFICER AND NO SUFFICIENT REASONS WERE FURNISHED BY THE AR OF THE ASSESSEE FOR ADMITTING THE AFFIDAVITS DATED 06.08.2013 AS REQUIRED UNDER RULE 46A OF THE INCOME TAX RULES FOR ADMITTING ADDITIONAL EVIDENCE , THE LD. CIT(A) HAS NOT TAKEN INTO COGNIZANCE FOR DECIDING THE APPEALS AND CONFIRMED THE PENALTY LEVIE D UNDER SECTION 271D AND 271E OF THE ACT. 5 . ON BEING AGGRIEVED, THE ASSESSEE HA S FILED APPEAL S BEFORE THE TRIBUNAL. 6 . THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE, BEING A CHRONIC DIABETIC PATIENT AND UNDER COMPELLING GROUND THE AMOUNT WAS BORROWED TO FUND THE RELATIVE OF THE DIALYSIS TECHNICIAN AND IN SUPPORT OF THESE FACTS, THE AFFIDAVITS FILED BY THE ASSESSEE AND OTHERS, WERE NOT CONSIDERED BY THE LD. CIT(A) AND CONFIRMED THE PENALTY. HE FURTHER SUBMITTED THAT THE TRIBUNAL MAY PLEASE BE CONSIDERED THE CON TENTION OF THE ASSESSEE AND DELETE THE PENALTY. 7 . ON THE OTHER HAND, THE LD. DR HAS STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 8 . WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS ON RECORD AND GONE THROUGH TH E ORDERS OF THE AUTHORITIES BELOW. THE ASSESSEE IS A BUS OPERATOR, A CHRONIC DIABETIC PATIENT AND HIS KIDNEYS HAVE FAILED. HE HAS TO UNDERGO I.T.A. NO S . 2 160 & 2161 /M/ 13 5 DIALYSIS TWICE A WEEK AND THE SAID LOAN IS STATED TO HAVE BEEN TAKEN TO LEND TO THE RELATIVE OF THE DIALYSIS TECHNI CIAN WHO ASSISTS THE ASSESSEE IN HIS DIALYSIS. THE PERSON WHO RECEIVED THE LOAN IS AN AGRICULTURIST AND THE LOAN WAS REPAID BY THE SAID AGRICULTURIST OUT OF HIS AGRICULTURAL INCOME. THE DEPARTMENT HAS NOT DOUBTED THE TRANSACTION. HOWEVER, T HE CASE OF THE D EPARTMENT IS THAT THE ASSESSEE HAS NOT FURNISHED ANY EVIDENCE BEFORE THE ASSESSING OFFICER AND THE AFFIDAVITS FILED BEFORE THE LD. CIT(A) WERE NOT AVAILABLE BEFORE THE ASSESSING OFFICER DURING PENALTY PROCEEDINGS. NOTHING WAS FOUND IN THE ORDERS OF AUTHORI TIES BELOW ABOUT THE CREDITWORTHINESS OR CAPACITY OF AN AGRICULTURIST TO TAKE SUCH A HUGE AMOUNT ON LOAN FROM ANY PERSON. WE FIND THAT THE DEPARTMENT HAS NOT MADE ANY ENQUIRY ABOUT THE GENUINENESS, CREDITWORTHINESS , REPAYING CAPACITY AND WHETHER T HE ASSESSEE HAS BORROWED THE AMOUNT TO FUND TO THE RELATIVE OF THE DIALYSIS TECHNICIAN OR NOT? MOREOVER, T HE LD. CIT(A) REJECTED THE ADDITIONAL EVIDENCE FILED BY THE ASSESSEE DURING THE COURSE OF APPELLATE PROCEEDINGS. UNDER THESE FACTS AND CIRCUMSTANCES, WE SET ASIDE THE ORDER PASSED BY THE LD. CIT(A) AND REMIT THE MATTER BACK TO THE ASSESSING OFFICER TO DECIDE BOTH PENALTIES UNDER SECTION 271D AND 271E OF THE ACT AFRESH IN ACCORDANCE WITH LAW AFTER MAKING DETAILED ENQUIRY, AS OBSERVED HEREINABOVE BY CONSIDER ING THE AFFIDAVITS AS FILED BEFORE THE LD. CIT(A) WITH REGARD TO THE REASONABLE CAUSE FOR BORROWING LOAN IN CASH AND REPAYMENT OF LOAN IN CASH BY THE ASSESSEE AFTER GIVING REQUIRED OPPORTUNITY TO THE ASSESSEE. I.T.A. NO S . 2 160 & 2161 /M/ 13 6 9 . IN THE RESULT, THE BOTH THE APPEAL S FILED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON THE 16 TH SEPTEMBER , 2015 AT CHENNAI. SD/ - SD/ - ( CHANDRA POOJARI ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 16 . 0 9 .201 5 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.