M/s Pato Builders Pvt Ltd., V. ACIT,

ITA 33/RAN/2014

• Counselvise Citation: [2016] 130 COUNSELVISE.COM (IT) 9979 (ITAT-RANCHI)
• Duration Of Justice: 2 year(s) 10 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2006-2007
• Appeal Filed On: 24-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHAUDHURY ORAM
• Assessee Lawyers: S K PODAR DEVESH PODAR
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI SMC BENCH, RANCHI BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO. 33/RAN/2014 ASSESSMENT YEAR : 2006 - 07 M/S. PATO BUILDERS PVT LTD., M.P. COMPLEX, MAIN ROAD, ADITYAPUR, JAMSHEDPUR VS. ACIT, CENTRAL CIRCLE - 11, JAMSHEDPUR PAN/GIR NO. AABCP 7453 N (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : S/ SHRI S.K.PODAR /DEVESH PODAR , AR REVENUE BY : SHRI CHAUDHURY ORAM , DR DATE OF HEARING : 7 /12/ 2016 DATE OF PRONOUNCEMENT : 7 /12/ 2016 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGA INST THE ORDER OF CIT(A) - JAMSHEDPUR , DATED 29.11.2013 , FOR THE ASSESSMENT YEAR 2006 - 07 . 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE LD CIT(A) WAS NOT JUSTIFIED IN CON FIRMING THE LEVY OF PENALTY OF R S.5 LAKHS U/S .271D OF THE ACT. 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSING OFFICER OBSERVED THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, LD A.R. OF THE ASSESSEE VIDE ORDER SHEET DATED 15.1 2.2008 ADMITTED THE FACT THAT RS.5 LAKH WAS RECEIVED IN CASH FROM SHRI SADHU CHARAN MAHATO AND NO FURTHER 2 ITA NO. 33/RAN/2014 ASSESSMENT YEAR : 2006 - 07 EXPLANATION HAS BEEN OFFERED IN THE PENALTY PROCEEDINGS U/S.271D OF THE ACT. HE, THEREFORE, LEVIED PENALTY OF RS.5 LAKHS U/S.271D OF THE ACT FOR VIOL ATING SECTION 269SS BY ACCEPTING THE LOAN OF RS.5 LAKHS IN CASH. 4. BEFORE ME, IT WAS SUBMITTED THAT IN THE QUANTUM APPEAL FILED BY THE ASSESSEE, THE TRIBUNAL IN ITA NO.162/RAN/2009 AND ITA NO.230/RAN/2009 IN THE CASE OF PATO BUILDERS (P) LTD VS ACIT ORDER DATED 14.7.2011 IN PARA 10 OF THE ORDER, CONFIRMED THE ORDER OF THE LD CIT(A ) DATED 27.5.2009 IN APPEAL NO. 298/JSR/2008 - 09 DELETING THE ADDITION OF RS.5 LAKHS MADE U/S.68 OF THE ACT. HENCE, IT WAS HIS SUBMISSION THAT NO PENALTY U/S.271D OF THE ACT WAS LE VIABLE WHEN THE TRANSACTION IN VIOLATION OF SECTION 269SS OF THE ACT WERE FOUND TO BE GENUINE. FOR THIS PROPOSITION, HE RELIED ON THE DECISION OF HONBLE JURISDICTIONAL JHARKHAND HIGH COURT IN THE CASE OF OMEC ENGINEERS VS CIT, 294 ITR 599 (JHAR). 5. ON THE OTHER HAND, LD D.R. RELIED ON THE ORDERS OF LOWER AUTHORITIES. 6. I FIND THAT THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF OMEC ENGINEERS (SUPRA) HAS HELD AS UNDER: THE MOOT QUESTION THAT FALLS FOR CONSIDERATION IS THAT AS TO WHETHER THE ASSESSEE SHALL BE TO IMPOSITION OF PENALTY, NOTWITHSTANDING THE FINDING RECORDED BY THE AUTHORITY THAT THE TRANSACTION MADE IN VIOLATION OF S. 269SS WAS A GENUINE TRANSACTION AND THE RETURN WAS FINALLY ACCEPTED UNDER S. 143(3) AND FURTHER THAT NO LOSS OF REVENUE WAS FOUND. THERE IS NO FINDING OF THE ASSESSING AUTHORITY, THE APPELLATE AUTHORITY OR THE TRIBUNAL THAT THE TRANSACTION MADE BY THE ASSESSEE IN BREACH OF THE PROVISIONS OF S. 269SS WAS NOT A GENUINE TRANSACTION. ON THE CONTRARY, THE RETURN FILED BY THE ASSESSEE WAS ACCEPTED AFTER SCRUTINY UNDER S. 143(3). FURTHER, THERE IS NO FINDING OF THE APPELLATE AUTHORITY THAT THE TRANSACTION IN BREACH OF THE AFORESAID PROVISIONS MADE BY T HE ASSESSEE WAS MALA FIDE AND WITH THE SOLE OBJECT TO DISCLOSE THE CONCEALED OR 3 ITA NO. 33/RAN/2014 ASSESSMENT YEAR : 2006 - 07 UNDISCLOSED MONEY. THE AUTHORITIES HAVE PROCEEDED ON THE BASIS THAT BREACH OF CONDITION PROVIDED UNDER S. 269SS SHALL LEAD TO PENAL CONSEQUENCES. IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE IMPOSITION OF PENALTY MERELY ON TECHNICAL MISTAKE COMMITTED BY THE ASSESSEE, WHICH HAS NOT RESULTED IN ANY LOSS OF REVENUE, SHALL BE HARSH AND CANNOT BE SUSTAINED IN LAW. THERE BEING NO FINDING OF AO, CIT(A) OR TRIBUNAL THAT THE TRANSACT IONS IN VIOLATION OF SE.269SS WERE NOT GENUINE, ASSESSEES RETURN HAVING BEEN ACCEPTED UNDER SECTION 143(3) AFTER SCRUTINY THERE BEING ALSO NO FINDING THAT TRANSACTIONS WERE MALAFIDE AIMED AT DISCLOSING CONCEALED MONEY, IMPOSITION OF PENALTY UNDER SECTION 271D MERELY FOR TECHNICAL MISTAKE COULD NOT BE SUSTAINED. 7. IN THE INSTANT CASE ALSO, THE ADDITION OF RS.5 LAKH WAS MADE U/S.68 OF THE ACT FOR TAKING LOAN BY THE ASSESSEE IN CASH THEREBY VIOLATING THE SECTION 269SS OF THE ACT WAS DELETED IN APPEAL BY T HE CIT(A) WHICH WAS CONFIRMED BY THE TRIBUNAL IN THE APPEAL FILED BY THE REVENUE THEREAGAINST. THUS, THE TRANSACTION IN VIOLATION OF SECTION 269SS WAS FOUND TO BE GENUINE. THEREFORE, THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF OMEC E NGINEERS (SUPRA) CLEARLY APPLIES TO THE FACTS OF THE CASE. RESPECTFULLY FOLLOWING THE SAME, I DELETE THE LEVY OF PENALTY OF RS.5,00,000/ - AND ALLOW GROUND OF APPEAL OF THE ASSESSEE. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRO N OUNCED IN THE OPEN COURT ON 7 /12/2016 IN THE PRESENCE OF PARTIES. SD/ - (N.S SAINI) A CCOUNTANT MEMBER RANCHI ; DATED 7 /12 /2016 4 ITA NO. 33/RAN/2014 ASSESSMENT YEAR : 2006 - 07 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, SR.PS, ITAT, CAMP AT RANCHI 1. THE APPELLANT : M/S. PATO BUILDERS PVT LTD., M.P. COMPLEX, MAIN ROAD, ADITYAPUR, JAMSHEDPUR 2. THE RESPONDENT :ACIT, CENTRAL CIRCLE - 11, JAMSHEDPUR 3. THE CIT(A) JAMSHEDPUR 4. CIT , JAMSHEDPUR 5. DR, ITAT, RANCHI 6. GUARD FILE. //TRUE COPY//