Arabrish Chowbey, Kolkata V. ACIT, R-26, KOLKATA, Kolkata

ITA 346/KOL/2016

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 1857 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2005-2006
• Appeal Filed On: 03-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: SOUMYAJIT DASGUPTA
• Assessee Lawyers: D K SAHA
• Keywords: Reasonable cause; Condonation of delay

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENCH KOLKATA BEFORE SHRI N.V. VASUDEVAN, JM &DR. A.L.SAINI, AM ./ITA NO.346/KOL/2016 ( / ASSESSMENT YEAR: 2005-06 AMBRISH CHOWBEY FLAT NO.1C, MERLIN LAUREL GARDEN, 71, NRISINGHA DUTTA ROAD, BEHALA, KOL 8. VS. ACIT, RG-26, KOLKATA 169, AJC BOSE ROAD, KOLKATA 700014. ./ ./PAN/GIR NO. : ACUPC 5847 P (APPELLANT) .. (RESPONDENT) APPELLANT BY :SHRI D.K. SAHA, FCA RESPONDENT BY :SHRI SOUMYAJIT DASGUPTA, ADDL. CIT / DATE OF HEARING : 22/11/2017 /DATE OF PRONOUNCEMENT : 25/01/2018 / O R D E R PER DR. ARJUN LAL SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAINING TO ASSESSMENT YEAR 2005-06, IS DIRECTED AGAINST AN ORDER PASSED BY THE COMMISSIONER OF INCOME TAX(APPEALS)-17, KOLKATA, IN APPEAL NO.113/CIT(A)-17/KOL, DATED 30.11.2015, WHICH IN TURN ARISES OUT OF PENALTY ORDER PASSED BY THE ASSESSING OFFICER U/S271E OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT), DATED 30.05.2008. 2.THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: I) THAT THE ORDER OF AO HAS BEEN SET ASIDE BY HONBLE ITAT KOLKATA WITH THE DIRECTIVE TO RE-ADJUDICATE THE SAME, GIVING DUE OPPORTUNITY TO THE ASSESSEE TO PRODUCE RELEVANT EVIDENCES. II) THAT THE REVISED ORDER PASSED BY THE LD. AO IN DEFERENCE TO THE ORDER OF HONBLE ITAT KOLKATA IS WITHOUT PROVIDING FOR PENAL PROVISION EITHER U/S 271(1)(C) OR 271E OF THE I.T. ACT 1961 IN PLACE OF THE SET ASIDE ORDER OF LD. AO DATED 31.12.2007. III) THAT THE CONTENTION OF LD. CIT(A) THAT REPAYMENT OF LOAN IN CASH WAS NOT THE SUBJECT MATTER OF APPEAL BEFORE THE HONBLE ITAT IS NOT CORRECT AND TENABLE. IV) THAT THE REJECTION OF PRAYER FOR CONDONATION OF DELAY HAS BEEN UNJUSTIFIED AS THE SAME HAS BEEN DONE MERELY ON ASSUMPTION THAN ON FACT. AMBRISH CHOWBEY ITA NO.346/KOL/2016 ASSESSMENT YEAR: 2005-06 PAGE | 2 V) THAT THE REPAYMENT OF LOAN IN CASH TAKEN FROM FATHER AND FRIEND BY A/C PAYEE CHEQUES DOES NOT ATTRACT THE PROVISIONS OF SECTION 271E OF THE ACT. 3. THE BRIEF FACTS QUA THE ISSUE ARE THAT ASSESSEE REPAID A LOAN OF RS.64,000/- IN CASH TO SHRI HILLOL KUMAR (FRIEND OF THE ASSESSEE). THE ASSESSEE ALSO REPAID THE LOAN OF RS.2,71,378/- TO SHRI R.N. CHOWBEY (FATHER OF THE ASSESSEE). THEREFORE, TOTAL REPAYMENT OF LOAN IN CASH WAS AT RS.3,35,378/-(64,000/- + 2,71,378/-) MADE BY THE ASSESSEE. BOTH THE REPAYMENTS WERE MADE DURING THE ASSESSMENT YEAR 2005-06 IN CONTRAVENTION TO THE PROVISIONS OF SECTION 269T OF THE I.T. ACT, 1961. DURING THE PENALTY PROCEEDINGS, THE ASSESSEE DID NOT SUBMIT ANY REPLY BEFORE THE AO, THEREFORE THE AO HELD THAT THE ASSESSEE UNDER CONSIDERATION WITHOUT ANY REASONABLE CAUSE CONTRAVENED THE PROVISIONS OF SECTION 269T OF THE ACT AND THEREFORE, HE IMPOSED PENALTY OF RS.3,35,378/- UNDER SECTION 271E OF THE INCOME TAXACT, 1961. 4. AGGRIEVED BY THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A), WHO HAS CONFIRMED THE PENALTY IMPOSED BY THE ASSESSING OFFICER. BEFORE THE LD CIT(A), THE ASSESSEE SUBMITTED THAT DUE TO BUSINESS URGENCY AND EXIGENCY, THE LOAN WAS TAKEN AND REPAID. THEREFORE, THE ASSESSEE HAS REASONABLE CAUSE AND HENCE, THE PENALTY SHOULD NOT BE LEVIED. THE LD. CIT(A) OBSERVED THAT THE ASSESSEE TOOK A STAND OF BUSINESS URGENCY AND EXIGENCY BUT HE HAD FAILED TO FILE ANY EVIDENCE WITH REGARD TO THE NATURE OF BUSINESS URGENCY AND EXIGENCY,THEREFORE, HE CONFIRMED THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER. 5. NOT BEING SATISFIED WITH THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT SO FAR LOAN GIVEN TO FATHER IS CONCERNED IT IS A KIND OF HELP TO THE FAMILY MEMBERS AND THE TRANSACTION BETWEEN SON AND FATHER SHOULD NOT BE TREATED AS LOAN. HOWEVER, THE LD. COUNSEL FOR THE ASSESSEE COULD NOT EXPLAIN ABOUT THE LOAN REPAID TO FRIEND AT RS.64,000/-. AMBRISH CHOWBEY ITA NO.346/KOL/2016 ASSESSMENT YEAR: 2005-06 PAGE | 3 6. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE HAS PRIMARILY REITERATED THE STAND TAKEN BY THE ASSESSING OFFICER, WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 7. WE HAVE GIVEN A CAREFUL CONSIDERATION TO THE RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT SUBMISSIONS MADE BY THE LD. COUNSEL FOR THE ASSESSEE ARE NOT BACKED UP BY ANY EVIDENCE WHATSOEVER, SO FAR THE LOAN OF RS.64,000/-, REPAID TO FRIEND, SHRI HILLOL KUMAR, IS CONCERNED. WE ARE OF THE VIEW THAT LOAN REPAID TO SHRI HILLOL KUMAR DOES NOT FALL IN THE DEFINITION OF FAMILY PERSON, THEREFORE, TO THAT EXTENT WE CONFIRM THE PENALTY IMPOSED BY THE CIT(A). HOWEVER, THE LOAN REPAID TO THE FATHER OF THE ASSESSEE AT RS.2,71,378/- SHOULD NOT BE CONSIDERED AS A VIOLATION OF THE PROVISIONS OF SECTION 269T OF THE ACT, AS THE TRANSACTION BETWEEN FATHER AND SON IS FOR THE PURPOSE OF ASSISTANCE OR HELP FOR FAMILY IN NEEDY HOURS. THEREFORE, WE ARE OF THE VIEW THAT THE LOAN PAID TO THE FATHER SHOULD NOT BE CONSIDERED FOR LEVY OF PENALTY.FOR THAT WE RELY ON THE JUDGMENT OF COORDINATE BENCH ITAT KOLKATA IN ITA NOS.331 & 332/KOL/2010 IN THE CASE OF ANANT HIMATSINGKA VS. ACIT, DATED 25.11.2011 WHEREIN IT WAS HELD THAT THE TRANSACTION BETWEEN SON-IN LAW AND FATHER IN LAW AND TRANSACTION BETWEEN FATHER AND SON, FOR GIVING A SUPPORT AND HELP, IN LAW WAS NOT A LOAN OR DEPOSIT IN STRICTER SENSE OF SECTION 269SS OF THE ACT AND IT WAS ONLY A FINANCIAL SUPPORT. THE LD. COUNSEL FOR THE ASSESSEE HAS FURTHER RELIED ON THE JUDGMENT OF HON`BLE ITAT KOLKATA IN ITA NO.1839/KOL/2010, IN THE CASE OF MANISHA PRAKASH AMIN VS. JCIT DATED 24.05.2011, FOR A.Y. 2006-07 WHEREIN IT HAS BEEN HELD THAT THE LOANS FROM RELATIVES ARE IN THE NATURE OF FINANCIAL SUPPORT WITHIN THE FAMILY AND THIS IS A REASONABLE CAUSE FALLING U/S.273B OF THE ACT. THEREFORE, WE NOTE THAT TRANSACTION BETWEEN ASSESSEE AND HIS FATHER DOES NOT ATTRACT THE PENAL PROVISIONS BUT TRANSACTION BETWEEN ASSESSEE AND HIS FRIEND ATTRACTS PENAL PROVISIONS UNDER SECTION 271E OF THE I.T. ACT BECAUSE A FRIEND IS NOT CONSIDERED A MEMBER OF ASSESSEE`S FAMILY. AMBRISH CHOWBEY ITA NO.346/KOL/2016 ASSESSMENT YEAR: 2005-06 PAGE | 4 THEREFORE, WE DELETE THE PENALTY AT RS.2,71,378/- U/S 271E OF THE I.T. ACT IN RESPECT OF LOAN REPAID TO FATHER AND CONFIRM THE PENALTY AT RS.64,000/- IN RESPECT OF LOAN PAID TO FRIEND. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE, IS PARTLY ALLOWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 25/01/2018. SD/- (N.V. VASUDEVAN) SD/- (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; DATED 25/01/2018 ( RS, SPS) / COPY OF THE ORDER FORWARDED TO : TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/D.D.O, I.T.A.T, KOLKATA BENCHES, KOLKATA . 1. / THE APPELLANT AMBRISH CHOWBEY 2. / THE RESPONDENT- ACIT, RG-26, KOLKATA 3. ( ) / THE CIT(A), 4. / CIT 5. , , / DR, ITAT, KOLKATA 6. / GUARD FILE.