I.T.O. Ward - 38(2), Midnapore, Paschim Midnapore V. Shri Arup Kumar Hazra , Paschim Midnapore

ITA 2488/KOL/2017

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1311 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-03-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Appeal Filed On: 19-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NICOLAS MURMU
• Keywords: Reasonable cause
• Section: 273B

Judgement Text

ITA NO.2488/KOL/2017 SHRI ARUP KUMAR HAZRA A.Y.2012 -13 1 IN THE INCOME TAX APPELLATE TRIBUNAL, BENCH SMC K OLKATA [BEFORE HONBLE SHRI J.SUDHAKAR REDDY, AM] ITA NO.2488/KOL/2017 ASSESSMENT YEAR : 2012-13 I.T.O., WARD-38 (2) -VERSUS- SHRI ARUP KUM AR HAZRA MIDNAPORE PASCHIM MEDINIPUR (PAN: AARPH 9261 R) (APPELLANT) (RESPONDENT) FOR THE APPELLANT: SHRI NICOLAS MURMU, ADDL. CI T FOR THE RESPONDENT: SHRI SOMNATH GHOSH, ADVOCATE DATE OF HEARING : 06.03.2018. DATE OF PRONOUNCEMENT : 21.03.2018. ORDER PER J.SUDHAKAR REDDY, AM: THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AGA INST THE ORDER OF THE COMMISSIONER OF INCOME TAX-(A)-11, KOLKATA RELATIN G TO A.Y. 2012-13. 2. THE ASSESSEE IS AN INDIVIDUAL AND DERIVES IN COME FROM THE BUSINESS OF RUNNING A PETROL PUMP. PENALTY U/S 271D OF THE INCOME TAX ACT , 1961 (ACT) WAS LEVIED BY AN ORDER PASSED ON 30.09.2016 BY THE JOINT COMMISSIONE R OF INCOME TAX-RANGE-38, MIDNAPORE FOR THE REASON THAT, THE ASSESSEE HAD REC EIVED CASH OF RS.10,50,000/- FROM SHRI NIKHIL LAHA AND FURTHER A CERTAIN AMOUNT OF R S.6,15,000/- WAS THE RECEIPT AS ADVANCE FROM FOUR DIFFERENT CUSTOMERS IN CASH WHICH , RESULTED IN CONTRAVENTION OF THE PROVISION OF SECTION 269SS OF THE ACT. THE LD. CIT( A) IN THE APPELLATE PROCEEDINGS DELETED THE PENALTY LEVIED BY HOLDING THAT THE PROV ISION OF SECTION 273B OF THE ACT APPLY ON THE FACTS OF THIS CASE AS THE ASSESSEE HAD REASONABLE CAUSE FOR OBTAINING A LOAN IN CASH UNDER EXCEPTIONAL CIRCUMSTANCES FROM S HRI NIKHIL LAHA AND THAT AN AMOUNT OF RS.6,15,000/- RECEIVED FROM FOUR DIFFEREN T PARTIES WAS NOT A LOAN AND IT WAS ONLY AN ADVANCE FOR SUPPLY OF GOODS. AGGRIEVED THE REVENUE IS BEFORE ME. ITA NO.2488/KOL/2017 SHRI ARUP KUMAR HAZRA A.Y.2012 -13 2 3. AFTER HEARING RIVAL CONTENTIONS, I FIND THAT THE LD. CIT(A) HAS, ON EXAMINATION OF BOOKS OF RECORDS HAS COME TO THE CONCLUSION THAT THE ASSESSEE HAD SHORTAGE OF FUNDS ON THE DATE ON WHICH LOAN WAS TAKEN FROM SHRI NIKHIL LAHA AND THAT THIS AMOUNT WAS USED FOR PAYMENT FOR PURCHASE WHICH WAS IMMEDIA TE NECESSITY FOR THE ASSESSEE. THE LD. CIT(A) RELIED ON THE DECISION OF THE HONBL E MADRAS HIGH COURT IN THE CASE OF CIT VS.T.PERUMAL (2015) 370 ITR 313 (MAD) TO THE PR OPOSITION THAT WHEN THERE ARE EXIGENCIES, WHICH FORCE THE BORROWER TO ACCEPT CAS H AS THE BORROWERS, UNDER THE EXCEPTIONAL CIRCUMSTANCES HAS REASONABLE CAUSE AND THAT PENALTY CANNOT BE LEVIED IN ACCORDANCE WITH THE PROVISION OF SECTION 273B OF T HE ACT. I ALSO FIND THAT THE LD. CIT(A) HAS RELIED ON THE DECISION OF THE HONBLE RA JASTHAN HIGH COURT IN THE CASE OF CIT VS MANOJ LALWNI 260 ITR 590 (RAJ). THE LD. CIT( A) AT PAGE 13 CONCLUDED AS FOLLOWS :- 'IN THE INSTANT CASE, THE TRIBUNAL HAD FOUND THAT T HE ASSESSEE WAS AN EXPORTER AND WAS IN URGENT NEED OF THE MONEY FOR COMPLYING W ITH THE TIME-BOUND SUPPLIES AND, THEREFORE, HE TOOK A LOAN OF A SPECIFIED SUM F ROM HIS RELATIVE, OUT OF WHICH A LARGE PORTION WAS IMMEDIATELY DEPOSITED IN THE BANK . IT WAS ONLY TO MEET THE EMERGENT NEED OF TIME-BOUND SUPPLIES THAT THE LOAN WAS TAKEN AS HE DID NOT HAVE SUFFICIENT TIME AND FUNDS AND THERE WAS NO INTENTIO N TO VIOLATE THE PROVISIONS OF SECTION 269SS. THUS, THE TRIBUNAL HAD ARRIVED AT TH E CONCLUSION THAT CASH LOAN WAS TAKEN BY THE ASSESSEE IN EXCEPTIONAL CIRCUMSTAN CES AND THAT IT WAS A CASE OF REASONABLE CAUSE, AS A CONSEQUENCE THEREOF' IT SET ASIDE THE PENALTY IMPOSED, BY THE REVENUE AUTHORITIES. ON A REASONABLE CAUSE BEIN G SHOWN, THE ASSESSING AUTHORITY HAS JURISDICTION NOT TO IMPOSE THE PENALT Y AND, THEREFORE, THE TRIBUNAL HAD ACTED IN ACCORDANCE WITH THE LAW IN WAIVING THE PENALTY IMPOSED ON THE ASSESSEE BY THE REVENUE AUTHORITIES. 4. IN THE PRESENT CONTEXT, THE CASH LOAN WAS ACCEPT ED BY THE ASSESSEE FOR MAKING IMMEDIATE PAYMENTS IN CASH WHICH WERE EVIDENCED BY THE CASH BOOK. THE PAYMENTS MADE WERE GENUINE IN NATURE. THUS IN CATEGORICAL TE RMS ANY ADVERSE ACTION ON THE COUNT OF APPLICATION OF THE MISCHIEF OF S. 271D REA D WITH S. 273B OF THE ACT IN RESPECT OF THE LOAN OF RS. 10,50,000/-.VIS-A-VIS THE APPELL ANT STANDS ELIMINATED. THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT CONTR OVERT THIS FACTUAL FINDING OF THE LD. CIT(A). HENCE, THE SAME IS UPHELD. ITA NO.2488/KOL/2017 SHRI ARUP KUMAR HAZRA A.Y.2012 -13 3 5. COMING TO THE PENALTY LEVIED ON AMOUNTS RECEIVED AS ADVANCE FROM FOUR PARTIES AGGREGATING TO RS.6,15,000/-, THE LD. CIT(A) HAS HE LD THAT THIS WAS MERE ADVANCE AND NOT A LOAN. HE RELIED ON THE DECISION OF THE HONBL E ALLAHABAD HIGH COURT IN THE CASE OF CIT VS KAILASH CHANDRA DEEPAK KUMAR [2009] 317 I TR 351 (ALL) AND HELD THAT PENALTY CANNOT BE IMPOSED WHEN THE AMOUNT IS RECEIV ED AS ADVANCE FOR PURCHASE OF GOODS. I FIND NO INFIRMITY IN THE FINDINGS OF THE L D. CIT(A). I UPHOLD THE ORDER OF THE FIRST APPELLATE AUTHORITY AND DISMISS THIS APPEAL O F THE REVENUE. 6. IN THE RESULT THE APPEAL BY THE REVENUE IS DISMI SSED. O RDER PRONOUNCED IN THE COURT ON 21 ST MARCH, 2018. SD/- [ J.SUDHAKAR REDDY ] ACCOUNTANT MEMBER DATED : 21.03.2018. [RG SR.PS] COPY OF THE ORDER FORWARDED TO: 1.SHRI ARUP KUMAR HAZRA, C/O PARUL SERVICE STATION, JHAKRA, C.K.TOWN, DIS: PASCHIM MEDINIPUR, PIN : 721254. 2. I.T.O., WARD-38 (2), MIDNAPORE. 3. C.I.T.(A)- 11, KOLKATA 4. C.I.T-13, KOLKAT A 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER, SENIOR PRIVATE SECRETARY HEAD OF OFFICE/D.D.O, ITAT KOLKATA BENCHES