Smt. Lekshmi Vishwanath, Delhi V. Addl. CIT, New Delhi

ITA 3115/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 3534 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 17-05-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAUSHLENDRA TIWARI
• Assessee Lawyers: PIYUSH KUMA
• Keywords: Business income; Initiation of penalty proceedings; Reasonable cause
• Section: 273B; 68; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES SMC : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA.NO.3869/DEL./2017 ASSESSMENT YEAR 2010-2011 THE INCOME TAX OFFICER, WARD-64(5), ROOM NO.104, CIVIC CENTRE, NEW DELHI. PIN 110 002. VS. MRS. LAKSHMI VISHWANATH, F - 175/5, AADITYA APARTMENT, DILSHAD COLONY, NEW DELHI. PAN AAKPV3978N (APPELLANT) (RESPONDENT) ITA.NO.3115/DEL./2017 ASSESSMENT YEAR 2010-2011 MRS. LAKSHMI VISHWANATH, F-175/5, AADITYA APARTMENT, DILSHAD COLONY, NEW DELHI. PAN AAKPV3978N VS. THE ADDL. CIT, RANGE-64, NEW DELHI. (APPELLANT) (RESPONDENT) FOR REVENUE : SHRI KAUSHLENDRA TIWARI, SR. D.R. FOR ASSESSEE : SHRI GAUTAM JAIN, ADVOCATE & SHRI PIYUSH KUMAR KAMAL, ADVOCATE. DATE OF HEARING : 02.11.2017 DATE OF PRONOUNCEMENT : 0 6 .11.2017 ORDER BOTH THE CROSS-APPEALS ARE DIRECTED AGAINST THE O RDER OF THE LD. CIT(A)-21, NEW DELHI, DATED 16 TH MARCH, 2017 FOR THE A.Y. 2 ITA.NO.3869/D/2017 & 3115/D/2017 MRS. LAKSHMI VISHWANATH, DELHI. 2010-2011, CHALLENGING THE CANCELLATION OF PENALTY AND DELETION OF PART PENALTY UNDER SECTION 271D OF THE I.T. ACT, 19 61. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE A.O. IN THE ASSESSMENT ORDER NOTED THAT ASSESSEE WAS ASKED TO E XPLAIN SOURCE OF THE CASH DEPOSIT IN HER BANK ACCOUNT MAINTAINED WIT H STATE BANK OF INDIA. THE ASSESSEE ATTENDED THE PROCEEDINGS BEFORE A.O. AND FILED REPLY ALONG WITH LETTER OF MR. W. SUTONG THAT SHRI P.V. IYER WAS HIS FAMILY FRIEND AND IN JULY, 2009, SHRI P.V. IYER INF ORMED MR. W. SUTONG ABOUT HIS HOUSING LOAN. ON 8 TH SEPTEMBER, 2009, MR. W. SUTONG DEPOSITED RS.16 LAKHS, THE AMOUNT RECEIVED O UT OF HIS BUSINESS RECEIPTS, IN ASSESSEES JOINT BANK ACCOUNT WITH SBI ACCOUNT. ON LEARNING ABOUT THE TRANSACTION, SHRI P.V. IYER, HUSBAND OF ASSESSEE REALISED THAT THIS IS NOT RIGHT WAY TO ACC EPT SUCH A HUGE AMOUNT AND HE RETURNED BACK THE AMOUNT OF RS.14 LAK HS ON THE SAME DAY AND RS.1.00 LAKH ON 10 TH SEPTEMBER, 2009 AS EVIDENT FROM PASS BOOK ENTRY, AMOUNT OF RS.80,000 RETURNED BACK IN TH E MONTH OF DECEMBER, 2012 AND BALANCE OF RS.20,000 ARE KEPT IN SAFE DEPOSIT FOR HIM. THE ASSESSEE ATTENDED THE PROCEEDINGS. BUT , DID NOT FILE ANY DOCUMENTARY EVIDENCE. THE A.O. WAS NOT SATISFIED WI TH THE 3 ITA.NO.3869/D/2017 & 3115/D/2017 MRS. LAKSHMI VISHWANATH, DELHI. EXPLANATION OF ASSESSEE AND ADDED BACK RS.16.18 LAK HS UNDER SECTION 68 OF THE I.T. ACT. THE A.O. INITIATED PENA LTY PROCEEDINGS FOR VIOLATION OF SECTION 269SS SEPARATELY. THE A.O. VID E SEPARATE ORDER LEVIED PENALTY UNDER SECTION 271D OF THE I.T. ACT I N A SUM OF RS.15,80,000 WHICH IS SUM EQUAL TO THE AMOUNT OF CA SH LOAN SO TAKEN OR ACCEPTED. 2.1. THE LD. CIT(A) CONSIDERING THE EXPLANATION OF ASSESSEE NOTED THAT THE AMOUNT OF CASH LOAN WAS NEVER BEEN R ECEIVED BY ASSESSEE IN HAND INSTEAD THE CASH HAS BEEN DEPOSITE D DIRECTLY IN THE BANK ACCOUNT OF ASSESSEE BY MR. W. SUTONG FROM SHIL LONG BRANCH OVER WHICH THE ASSESSEE HAD NO CONTROL. RATHER BY T AKING INSTANT ACTION, THE ASSESSEE HAS REFUNDED BACK THE IMPUGNED CASH ON THE SAME DAY WHICH GOES TO PROVE THE BONAFIDE OF THE AS SESSEE AND COMPLETELY RULES OUT ANY FOUL PLAY ON ASSESSEES PA RT. THE A.O. HAS NOT OFFERED ANY COMMENTS ON THE SAME. THE LD. CIT(A ) ALSO NOTED THAT IMPUGNED CASH WAS NEVER USED BY ASSESSEE AS OUT OF RS.16 LAKHS, THE ASSESSEE HAS RETURNED BACK RS.14 LAKHS ON THE S AME DAY, WHEREAS ANOTHER RS.1 LAKH WAS REFUNDED MERELY AFTER TWO DAYS. 4 ITA.NO.3869/D/2017 & 3115/D/2017 MRS. LAKSHMI VISHWANATH, DELHI. THEREFORE, PENALTY TO THE EXTENT OF RS.15 LAKHS WAS CANCELLED. THE PENALTY FOR RS.80,000 WAS CONFIRMED. 3. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND S UBMITTED THAT THE ADDITION OF RS.16,18,000 IN ASSESSMENT YEAR UND ER APPEAL ON QUANTUM REMAINED SUBJECT MATTER IN APPEAL BEFORE IT AT, DELHI BENCH IN DEPARTMENTAL APPEAL IN ITA.NO.4579/2013 AN D VIDE ORDER DATED 20 TH MARCH, 2015, THE DEPARTMENTAL APPEAL HAS BEEN DISMISSED. THE LD. CIT(A) IN THIS CASE DELETED THE ADDITION OF RS.15,80,000 BY CONSIDERING THE EXPLANATION OF ASSE SSEE AS IS NOTED IN THE IMPUGNED ORDER OF THE LD. CIT(A) ON PENALTY MATTER. THE LEARNED COUNSEL FOR THE ASSESSEE THEREFORE, SUBMITT ED THAT BONAFIDE OF THE ASSESSEE IS NOT DISPUTED AND FURTHER SUBMITT ED THAT A.O. DID NOT RECORD ANY SATISFACTION UNDER SECTION 271D OF T HE I.T. ACT BEFORE INITIATING THE PENALTY PROCEEDINGS. 4. ON THE OTHER HAND, LD. D.R. RELIED UPON THE ORD ERS OF THE AUTHORITIES BELOW. 5 ITA.NO.3869/D/2017 & 3115/D/2017 MRS. LAKSHMI VISHWANATH, DELHI. 5. AFTER CONSIDERING THE RIVAL CONTENTIONS, I AM O F THE VIEW THAT NO PENALTY IS LEVIABLE IN THE FACTS AND CIRCUM STANCES OF THE CASE. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. JA I LAXMI RICE MILLS (2015) 379 ITR 521(SC) HELD AS UNDER : FOR THE ASSESSMENT YEAR 1992-93 , THE ASSESSMENT ORDER WAS PASSED ON THE ASSESSEE ON FEBRUARY 26, 1996, EX-PARTE. WHIL E 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 271D 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 SEP TEMBER 23, 1996, I . E ., BEFO R E THE APPEAL OF THE ASSESSEE AGAINST THE ORIGINAL ASSESSMENT ORDER WAS HEARD A ND ALLO WED THEREBY SETTING ASIDE THE ASSESSMENT ORDER ITSELF . 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 SE CTION 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 : 6 ITA.NO.3869/D/2017 & 3115/D/2017 MRS. LAKSHMI VISHWANATH, DELHI. 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 ASS ESSING OFFICER WANTED PENALTY PROCEEDING TO BE INITIATED UNDER 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. 5.1. IN THIS CASE, THE A.O. MERELY INITIATED PENAL TY PROCEEDINGS SEPARATELY FOR VIOLATION OF SECTION 269SS OF THE I. T. ACT. HE DID NOT RECORD ANY SATISFACTION UNDER SECTION 271D OF THE I .T. ACT BEFORE INITIATING THE PENALTY PROCEEDINGS UNDER SECTION 27 1D OF THE I.T. ACT. FURTHER, THE EXPLANATION OF ASSESSEE ON MERIT CLEAR LY SUGGEST THAT ASSESSEE HAD A REASONABLE CAUSE FOR VIOLATION TO COMPLY WITH THE PROVISIONS OF LAW BECAUSE NO CASH GIVEN DIRECTLY TO ASSESSEE BUT DEPOSITED AT SHILONG BRANCH OVER WHICH ASSESSEE DID NOT HAVE ANY CONTROL. THE ASSESSEE IMMEDIATELY ACTED ON THE MATT ER AND REFUNDED THE AMOUNT IN QUESTION. THE FINDING OF FACT RECORDE D BY LD. CIT(A) HAVE NOT BEEN DISPUTED THROUGH ANY EVIDENCE OR MATE RIAL ON RECORD. THEREFORE, CONSIDERING THE ISSUE IN THE LIGHT OF R EASONABLE CAUSE UNDER SECTION 273B OF I.T. ACT, FOR FAILURE TO COMP LY WITH THE PROVISIONS OF LAW, NO PENALTY IS LEVIABLE IN THE MA TTER. 7 ITA.NO.3869/D/2017 & 3115/D/2017 MRS. LAKSHMI VISHWANATH, DELHI. 6. CONSIDERING THE ABOVE DISCUSSION IN THE LIGHT O F JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. JAI LAXMI RICE MILLS (SUPRA), I SET ASIDE THE ORDERS OF THE AUTHOR ITIES BELOW AND CANCEL THE ENTIRE PENALTY. 7. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED AND APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DELHI, DATED 06 TH NOVEMBER, 2017 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT SMC BENCH, DELHI 6. GUARD FILE. // BY ORDER // ASST. REGISTRAR : ITAT DELHI BENCHES : DELHI.