Gnanaselvi Udayakumar, CHENNAI V. JCIT, CHENNAI

ITA 326/CHNY/2015

• Counselvise Citation: 32621714 RSA 2015
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 06-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Keywords: Recovery proceedings; Reasonable cause
• Section: 273B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.326/MDS/2015 ' (' / ASSESSMENT YEAR : 2009-10 SMT. GNANASELVI UDAYAKUMAR, NO.3B, THIRD FLOOR, VASANT APARTMENTS, 110/119, M.S. KOIL STREET, ROYAPURAM, CHENNAI - 600 013. PAN : ABWPU 4037 G V. THE JOINT COMMISSIONER OF INCOME TAX, RANGE VI, CHENNAI - 600 034. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SH. J.C. JACOB, RETD.DCIT SH. SUBHADEEP ROY, CA ,-*+ . / / RESPONDENT BY : SHRI A.V. SREEKANTH, JCIT 0 . 1$ / DATE OF HEARING : 06.05.2015 2!( . 1$ / DATE OF PRONOUNCEMENT : 22.05.2015 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-II, CHENNA I, DATED 2 I.T.A. NO.326/MDS/15 20.10.2014 AND PERTAINS TO ASSESSMENT YEAR 2009-10. THE ONLY ISSUE ARISES FOR CONSIDERATION IS WITH REGARD TO LE VY OF PENALTY UNDER SECTION 271D OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2. SHRI J.C. JACOB, THE LD. REPRESENTATIVE FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE BORROWED LOAN FROM LIC HOUSING FINANCE LIMITED FOR PURCHASE OF HOUSE PROPERTY. SI NCE THE ASSESSEE COULD NOT REPAY THE DUES, THE LIC HOUSING FINANCE LTD. INITIATED RECOVERY PROCEEDINGS BEFORE THE DEBT RECO VERY TRIBUNAL. THE MATTER REACHED TO THE LEVEL OF AUCTIONING THE P ROPERTY. AT THAT TIME, THE ASSESSEE HAD NO OTHER WAY EXCEPT TO BORRO W FUNDS FROM CLOSE RELATIVES LIKE FATHER, HUSBAND, COUSIN-BROTHE R AND COUSIN- SISTER. DUE TO URGENCY, THE ASSESSEE COULD NOT GO FOR FINANCIAL INSTITUTIONS TO BORROW MONEY. THEREFORE, THE MONEY WAS BORROWED FROM CLOSE RELATIVES AND THE SAME WAS REPAID TO LIC HOUSING FINANCE LTD. IN ORDER TO SAVE THE HOUSE PROPERTY FR OM PUBLIC AUCTION. THEREFORE, ACCORDING TO THE LD. REPRESENT ATIVE, THERE WAS REASONABLE CAUSE FOR RECEIVING MONEY IN CASH EXCEED ING ` 20,000/- WITHIN THE MEANING OF SECTION 273B OF THE ACT. 3. ON THE CONTRARY, SHRI A.V. SREEKANTH, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT THE ASSESSEE BORROWE D ` 12,00,000/- IN CASH FROM 11 INDIVIDUALS. THE ASSESSEE CLAIMED THAT THEY ARE HER 3 I.T.A. NO.326/MDS/15 CLOSE RELATIVES. THE FACT REMAINS THAT THE ASSESSE E BORROWED MONEY EXCEEDING ` 20,000/- IN VIOLATION OF SECTION 269SS OF THE ACT. THE LD. D.R. FURTHER POINTED OUT THAT THE ASSESSEE AVAILED LOANS OF ` 2,50,000/- IN THE YEAR 1993 FOR PURCHASE OF TONDIAR PET PROPERTY AND ` 4,00,000/- IN THE YEAR 1994 FOR PURCHASE OF KATTUPA KKAM PROPERTY FROM LIC HOUSING FINANCE LTD. THE ASSESSE E WILLFULLY FAILED TO REPAY THE AMOUNT ALONG WITH INTEREST EVEN AFTER 13 YEARS. THEREFORE, THE LIC HOUSING FINANCE LTD. RESORTED TO RECOVERY PROCEEDINGS. CONSEQUENTLY, THE PROPERTY WAS BROUGH T TO SALE. ACCORDING TO THE LD. D.R., THE ASSESSEE HAD ENOUGH TIME TO ANTICIPATE THE LIC RECOVERY PROCEEDINGS, BEFORE THE PROPERTY WAS BROUGHT TO SALE. THEREFORE, THE ASSESSEE COULD HAV E ARRANGED FUNDS THROUGH BANKING CHANNELS. HOWEVER, THE ASSES SEE CHOSE TO RECEIVE MONEY IN CASH EXCEEDING ` 20,000/-. THEREFORE, THE ASSESSING OFFICER RIGHTLY LEVIED PENALTY UNDER SECT ION 271D OF THE ACT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAD BORROWED LOAN FROM LIC HOUSING FINANCE LTD. AND PURCHASED HOUSE PROPERTY. THE ASSESSEE ALSO COMMIT TED DEFAULT IN PAYMENT OF INSTALMENTS. CONSEQUENTLY, THE PROPERTY WAS BROUGHT TO 4 I.T.A. NO.326/MDS/15 SALE BY PUBLIC AUCTION. THE CONTENTION OF THE LD. D.R. WAS THAT THE ASSESSEE COULD NOT REPAY THE AMOUNT FOR 13 YEARS, T HEREFORE, THE ASSESSEE COULD HAVE MADE ARRANGEMENT TO SAVE THE PR OPERTY BY RECEIVING MONEY THROUGH BANKING CHANNEL. NO DOUBT, THE ASSESSEE COULD HAVE RECEIVED THROUGH BANKING CHANNEL PROVIDE D THERE WAS ENOUGH TIME GAP AVAILABLE. IN THIS CASE, THE ASSES SEE HAD TO SAVE HER PROPERTY FROM PUBLIC AUCTION. THE PUBLIC AUCTI ON COULD HAVE BEEN PROCEEDED HAD THE MONEY HAD NOT BEEN PAID IMME DIATELY. WHEN A PERSON IS AT DISTRESS, HE HAS TO COLLECT MON EY ONLY FROM CLOSE RELATIVES. FOR GOING TO THE BANKING INSTITUT IONS OR THIRD PARTIES TO BORROW MONEY, THE ASSESSEE HAS TO GIVE SECURITY AND UNDERGO OTHER PROCEDURAL FORMALITIES WHICH WOULD TAKE CONSI DERABLE TIME. HOWEVER, THE LIC HOUSING FINANCE LTD. MAY NOT WAIT FOR THE ASSESSEE TO RAISE MONEY BY GOING TO THE FINANCIAL I NSTITUTIONS. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THE ASSESSEE WAS COMPELLED TO TAKE MONEY FROM CLOSE REL ATIVES IN CASH EXCEEDING ` 20,000/- IN ORDER TO SAVE THE PROPERTY FROM PUBLIC AUCTION. IN THOSE CIRCUMSTANCES, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE ASSESSEE HAD REASONABLE CAUSE IN R ECEIVING THE MONEY BY CASH EXCEEDING ` 20,000/-. HENCE, THIS IS NOT A FIT CASE FOR LEVY OF PENALTY UNDER SECTION 271D OF THE ACT. ACCORDINGLY, THE 5 I.T.A. NO.326/MDS/15 ORDERS OF THE LOWER AUTHORITIES ARE SET ASIDE AND T HE PENALTY IS DELETED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED ON 22 ND MAY, 2015 AT CHENNAI. SD/- SD/- (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) (. !' ) ( . . . ) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 22 ND MAY, 2015. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. 0 81 () /CIT(A)-II, CHENNAI 4. 0 81 /CIT-VII, CHENNAI 5. 69 ,1 /DR 6. :' ; /GF.