Ashok Kumar Goel, Shimla V. ACIT, Shimla

ITA 353/CHANDI/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86205 (ITAT-CHANDIGARH)
• Duration Of Justice: 1 year(s) 11 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 23-03-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 01-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: ASHOK GOEL
• Keywords: Salary income; Reasonable cause; Tax effect
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B, CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NO. 353/CHD/2013 (ASSESSMENT YEAR : 2004-05) ASHOK KUMAR GOEL, VS. THE ADDL.CIT, 20, THE MALL, SHIMLA. SHIMLA. PAN: ABJPG7364H (APPELLANT) (RESPONDENT) APPELLANT BY : S/SHRI SUDHIR SEHGAL & ASHOK GOEL RESPONDENT BY : SHRI MANJIT SINGH, DR DATE OF HEARING : 23.03.2015 DATE OF PRONOUNCEMENT : 25.03.2015 O R D E R PER BHAVNESH SAINI, J.M. : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS), SHIMLA DATED 22.01.2013, CHALLENGING THE LEVY OF PENALTY UNDER SECTION 271D OF THE INCOME TA X ACT, 1961. 2. BRIEFLY, THE FACTS ARE THAT THE ASSESSEE IS A D IRECTOR OF M/S MOON INTERNATIONAL HOTELS (P) LTD. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE HAS SHOWN INCOME FROM SALARY, HOUSE PROPERTY AND OTHER SOURCES. THE ASSE SSING 2 OFFICER NOTED THAT THE ASSESSEE HAD RECEIVED AN AMO UNT OF RS.9,65,000/- AND RS.7,65,000/- IN CASH FROM HIS SO N SHRI DHEERAJ GOEL. THE ASSESSING OFFICER, THEREFORE, HE LD THAT THE ASSESSEE HAD CONTRAVENED THE PROVISIONS OF SECTION 269SS OF THE ACT. HE ACCORDINGLY INITIATED THE PENALTY PROC EEDINGS UNDER SECTION 271D OF THE ACT. HOWEVER, THE ADDL.C IT, SHIMLA RANGE, SHIMLA DROPPED THE PENALTY PROCEEDINGS INITI ATED AGAINST THE ASSESSEE VIDE HIS ORDER DATED 28.3.2008 . SUBSEQUENTLY, DURING THE COURSE OF APPELLATE PROCEE DINGS IN THE CASE OF THE ASSESSEES SON SHRI DHEERAJ GOEL F OR THE SAME ASSESSMENT YEAR, THE LEARNED CIT (APPEALS), SHIMLA VIDE ORDER DATED 27.10.2010 ACCEPTED THE EXPLANATION OF SHRI D HEERAJ GOEL IN RESPECT OF THE ADVANCE OF UNSECURED LOANS O F RS.9,65,000/- AND RS.7,65,000/- TO SHRI ASHOK KUMAR GOEL. THE LEARNED CIT (APPEALS) ACCORDINGLY DELETED THE A DDITION OF RS.17,30,000/- . HOWEVER, THE LEARNED CIT (APPEAL S) DIRECTED THAT PENALTY PROCEEDINGS UNDER SECTION 271D OF THE ACT SHOULD BE INITIATED AGAINST SHRI ASHOK KUMAR GOEL I.E. THE ASSESSEE, THE RECIPIENT OF LOANS IN VIEW OF THE LOANS BEING I N CASH. THE PENALTY WAS ACCORDINGLY IMPOSED. THE ASSESSEE CHA LLENGED THE PENALTY ORDER BEFORE THE LEARNED CIT (APPEALS) AND IT WAS SUBMITTED THAT THE AMOUNT OF RS.9,65,000/- IS OPENI NG BALANCE AND THE AMOUNT OF RS.7,65,000/- WAS RECEIVE D AS IMPREST IN THIS YEAR FROM HIS SON SHRI DHEERAJ GOEL TO ASSIST HIM IN THE PURCHASE OF BUILDING. IT WAS ALSO SUBM ITTED THAT THE PENALTY PROCEEDINGS WERE ALREADY DROPPED BY THE ADDL.CIT, SHIMLA. THEREFORE, THE PENALTY SHOULD NOT BE IMPOS ED. IT WAS FURTHER SUBMITTED THAT THE AMOUNT OF RS.7,65,000/- HAS BEEN 3 RETURNED BACK TO SHRI DHEERAJ GOEL THROUGH CHEQUES OF DIFFERENT AMOUNTS. THE ASSESSEE ALSO RAISED THE AD DITIONAL GROUNDS TO SAY THAT THE ASSESSEE WAS FACING GENUINE FINANCIAL HARDSHIP AND WAS INCURRING HUGE LOSSES AND CASH FLO W POSITION HAD CRIPPLED DURING THAT TIME AND HAD TAKE N MASSIVE LOANS FROM HPFC. BECAUSE OF THE BUSINESS EXIGENCI ES WARRANTING IMMEDIATE DISCHARGE OF LIABILITY AND ON THE SPOT DECISION REGARDING CHOICE OF MATERIAL PURCHASE AND FOR EFFECTING ECONOMIES OF SCALE AND SINCE ALL THE ENTI TIES WERE DIRECTLY BEING HANDLED BY THE ASSESSEE AND FOR BUSI NESS NEEDS THE AMOUNT WAS TAKEN. THE SOURCE OF THE AMOUNT IS FOUND TO BE GENUINE, THEREFORE, PENALTY NEED NOT TO BE IMPOS ED. THE LEARNED CIT (APPEALS), HOWEVER, DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE ON MERITS. HOWEVER, IT WAS FOUND T HAT THE AMOUNT OF RS.9,65,000/- WAS THE OPENING BALANCE AS ON 1.4.2003. THEREFORE, PENALTY TO THIS EXTENT WAS DE LETED AND PENALTY WAS UPHELD FOR THE AMOUNT OF RS.7,65,000/- DURING THE YEAR UNDER CONSIDERATION. THE APPEAL OF THE A SSESSEE WAS ACCORDINGLY PARTLY ALLOWED. 3. ACCORDING TO THE DEFECT MEMOS THE APPEAL IS TIM E BARRED BY THREE DAYS. THE LEARNED COUNSEL FOR ASSE SSEE EXPLAINED THAT SINCE THE WIFE OF THE ASSESSEE WAS D ETECTED WITH METASTAIC CANCER OF THE GALL BLADDER AND WAS O BTAINING TREATMENT AT DELHI. THEREFORE, THERE WAS DELAY OF THREE DAYS IN FILING OF THE APPEAL. THERE IS NO SERIOUS CHA LLENGE TO THE EXPLANATION OF THE ASSESSEE. CONSIDERING THE EXPLA NATION OF THE ASSESSEE AND THE NOMINAL DELAY OF THREE DAYS, W E ARE 4 SATISFIED THAT THE ASSESSEE WAS PREVENTED BY SUFFIC IENT CAUSE FROM FILING THE APPEAL WITHIN THE PERIOD OF LIMITAT ION. THE DELAY IN FILING OF THE APPEAL IS ACCORDINGLY CONDON ED. 4. WE HAVE HEARD THE LEARNED REPRESENTATIVES OF BO TH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON R ECORD. THE LEARNED COUNSEL FOR ASSESSEE REITERATED THE SUB MISSION MADE BEFORE THE AUTHORITIES BELOW AND STATED THAT T HE GENUINENESS OF THE LOANS HAS BEEN ACCEPTED BY THE L EARNED CIT (APPEALS) IN THE CASE OF SHRI DHEERAJ GOEL VI DE ORDER DATED 27.10.2010 AND THE DEPARTMENTAL APPEAL IN THE CASE OF SHRI DHEERAJ GOEL IN ITA NO.2 OF 2011 HAD BEEN DISM ISSED BY THE TRIBUNAL VIDE ORDER DATED 27.1.2014. HE HAS S UBMITTED THAT THE EARLIER PENALTY PROCEEDINGS WERE DROPPED B Y THE ASSESSING OFFICER (ADDL.CIT, SHIMLA). THEREFORE, P ENALTY SHOULD NOT BE IMPOSED IN THE CASE OF THE ASSESSEE AND THAT THE AMOUNT IN QUESTION WAS RECEIVED FOR BUSINESS EX IGENCIES WHICH IS NOT IN DISPUTE. HE HAS RELIED UPON THE D ECISION OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. SUNIL KUMAR GOEL, 315 ITR 163 (P&H), IN WHICH IT W AS HELD : FAMILY TRANSACTION BETWEEN TWO INDEPENDENT ASSESSE S, BASED ON AN ACT OF CASUALNESS, SPECIALLY IN A CASE WHERE THE DISCLOSURE THEREOF IS CONTAINED IN THE COMPILAT ION OF ACCOUNTS AND WHICH HAS NO TAX EFFECT, ESTABLISHES REASONABLE CAUSE UNDER S. 273B FOR NOT INVOKING T HE PENAL PROVISIONS OF SS. 271D AND 271E. 5. HE HAS ALSO RELIED UPON THE ORDER OF THE I.T.A. T., CHANDIGARH BENCH IN THE CASE OF ACIT VS. AMARNATH IN ITA NO.1199/CHD/2012 DATED 31.1.2013, IN WHICH CASH WAS FOUND 5 TO HAVE BEEN RECEIVED URGENTLY WAS CONSIDERED TO BE REASONABLE CAUSE AND DEPARTMENTAL APPEAL WAS DISMIS SED. 6. ON THE OTHER HAND, THE LEARNED D.R FOR THE REVE NUE RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 7. CONSIDERING THE RIVAL SUBMISSIONS IN THE LIGHT OF THE MATERIAL ON RECORD, WE ARE OF THE VIEW THAT PENALTY IS NOT LEVIABLE IN THE FACTS AND CIRCUMSTANCES OF THE CASE . SECTION 273B OF THE ACT PROVIDES THAT PENALTY UNDER SECTION 271D OF THE ACT SHALL NOT BE IMPOSABLE ON THE PERSON OR THE ASSESSEE AS THE CASE MAY BE FOR ANY FAILURE REFERRED TO IN T HE SAID PROVISION IF THE ASSESSEE PROVES THAT THERE WAS A R EASONABLE CAUSE FOR THE SAID FAILURE. THE ASSESSEE EXPLAINE D THAT THE CASH WAS TAKEN BY THE ASSESSEE FROM HIS SON FOR BUS INESS EXIGENCIES. THE ASSESSEE EXPLAINED THAT SINCE HE WAS FACING GENUINE FINANCIAL HARDSHIP AND CASH FLOW POSITION H AD CRIPPLED DURING THE YEAR UNDER CONSIDERATION, THERE FORE, THE ASSESSEE IN DIRE NEED OF CASH TAKEN THE CASH AMOUNT FROM HIS SON. THE GENUINENESS OF THE AMOUNT RECEIVED IN CA SH AND SOURCE THEREOF HAVE NOT BEEN DISPUTED. RATHER IN THE CASE OF SHRI DHEERAJ GOEL, SON OF THE ASSESSEE WHO HAS GIVE N THE CASH TO THE ASSESSEE ADDITION HAS BEEN DELETED FINDING T HE LOAN TO BE GENUINE AND THE DEPARTMENTAL APPEAL HAS BEEN DIS MISSED BY THE TRIBUNAL. ON THE PREMISE OF THE SAME FACTS , THE ADDL.CIT, SHIMLA EARLIER DROPPED THE PROCEEDINGS UN DER SECTION 271D OF THE ACT AGAINST THE ASSESSEE. IT IS ONLY 6 WHEN THE APPELLATE ORDER IN THE CASE OF SHRI DHEER AJ GOEL WAS PASSED BY THE LEARNED CIT (APPEALS) ON 27.10.2010 I N WHICH DIRECTION WAS ISSUED TO INITIATE PENALTY PROCEEDING S AGAINST THE ASSESSEE UNDER SECTION 271D OF THE ACT, PENALTY PROCEEDINGS WERE INITIATED AFRESH. HOWEVER, THE O RDER OF THE LEARNED CIT (APPEALS) ACCEPTING THE GENUINENESS OF LOAN HAS BEEN CONFIRMED BY THE TRIBUNAL. THEREFORE, NOTHIN G HAS BEEN LEFT AGAINST THE ASSESSEE FOR INVITING LEVY OF PENA LTY IN THE CASE OF THE ASSESSEE. IT IS WELL SETTLED LAW THA T PENALTY IS NOT MANDATORY IN EACH AND EVERY CASE. THE FACTS AND CIRCUMSTANCES OF THE CASE SHALL HAVE TO BE CONSIDER ED. SINCE THE CASH WAS REQUIRED URGENTLY BY THE ASSESSEE FOR BUSINESS NEEDS AND AMOUNT IS RECEIVED BY THE ASSESSEE FROM H IS SON AND THE GENUINENESS OF THE TRANSACTION IS NOT DOUBT ED BY THE AUTHORITIES BELOW, THEREFORE, IT BEING THE VENIAL A ND TECHNICAL DEFAULT IN NOT COMPLYING WITH THE PROVISIONS OF SEC TION 269SS OF THE ACT, THE PENALTY SHOULD NOT BE IMPOSED IN TH E CASE OF THE ASSESSEE. THE CASE OF THE ASSESSEE WOULD ALSO FALL IN THE EXCEPTION BY THE JUDGMENT OF THE HON'BLE PUNJAB & H ARYANA HIGH COURT IN THE CASE OF SUNIL KUMAR GOEL (SUPRA) . CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTA NCES AND DETAILED SUBMISSION OF LEARNED COUNSEL FOR ASSESSEE , WE ARE OF THE VIEW THAT THE ASSESSEE HAS REASONABLE CAUSE F OR FAILURE TO COMPLY WITH THE PROVISIONS OF LAW. THEREFORE, N O PENALTY IS TO BE LEVIED AGAINST THE ASSESSEE UNDER SECTION 271 D OF THE 7 ACT. WE ACCORDINGLY SET ASIDE THE ORDERS OF THE AU THORITIES BELOW AND CANCEL THE PENALTY. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 25 TH DAY OF MARCH, 2015. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 25 TH MARCH, 2015 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH