M/s. Charan Dass Ashok Kumar, Moga V. The Addl.Commissioner of Income-tax, Moga

ITA 369/ASR/2011

• Counselvise Citation: 36920914 RSA 2011
• Duration Of Justice: 1 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2012
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 13-09-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 17-06-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: R L CHHANALIA
• Assessee Lawyers: RAVISH SOOD
• Keywords: Bonafide belief; Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P.JAIN, ACCOUNTANT MEMBER I.T.A. NO.369(ASR)/2011 ASSESSMENT YEAR:2006-07 PAN :AADFC3410D M/S. CHARAN DASS ASHOK KUMAR VS. ADDL. COMMR. OF IN COME-TAX, MOGA. MOGA RANGE, MOGA. (APPELLANT) (RESPONDENT) APPELLANT BY:SH. RAVISH SOOD, ADVOCATE RESPONDENT BY:SH. R.L. CHHANALIA, DR DATE OF HEARING:13/09/2012 DATE OF PRONOUNCEMENT:20/09/2012 ORDER PER BENCH ; THIS APPEAL OF THE ASSESSEE ARISES FROM THE ORDER OF THE CIT(A)-II, LUDHIANA, DATED 23.02.2011 FOR THE ASSESSMENT YEAR 2006-07. 2. THE ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APP EAL: 1. THAT THE CIT(A) HAS ERRED IN LAW AND FACTS OF T HE CASE IN SUSTAINING THE PENALTY OF RS. 5 LACS IMPOSED BY THE ADDL. CIT, MOGA U/S 271D OF THE INCOME-TAX ACT, 1961 2. THAT THE CIT(A) HAS ERRED IN LAW AND FACTS OF THE C ASE IN CONFIRMING THE PENALTY IMPOSED U/S 271D WITHOUT TAK ING COGNIZANCE OF THE WRITTEN SUBMISSIONS OF THE ASSESS EE FIRM AS WERE PLACED ON RECORD DURING THE COURSE OF APPELLATE PRO CEEDINGS, ITA NO.369(ASR)/2011 2 WHEREIN THE REASONABLE CAUSE LEADING TO THE DEFAULT STOOD DULY EXPLAINED. 3. THAT THE CIT(A) HAS GRAVELY ERRED IN LAW AND FACTS OF THE CASE IN SUSTAINING THE PENALTY IMPOSED U/S 271D BY WAY OF A NON-SPEAKING ORDER. 4. THAT THE CIT(A) GRAVELY ERRED IN LAW BY FAILING TO APPRECIATE THAT ON CONJOINT READING OF SEC.271D R.W.S 273B, NOW WHE N IN LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE REASONABLE CAUSE LEADING TO THE DEFAULT STOOD DULY ESTABLISHED, THEREFORE, NO PENALTY WAS LIABLE TO BE SUSTAINED. 5. THAT THE CIT(A) GRAVELY ERRED AND THEREIN FAILED TO APPRECIATE THE FACTS OF THE CASE LEADING TO IMPUGNED DEFAULT OF TH E PROVISIONS OF SECTION 269SS IN THE RIGHT PERSPECTIVE. 6. ANY OTHER GROUND OF APPEAL AS MAY BE ALLOWED TO BE RAISED AT THE TIME OF HEARING OF APPEAL. 3. THE BRIEF FACTS AS ARISING FROM THE ASSESSMENT O RDER, WHICH FOR THE SAKE OF CLARITY ARE REPRODUCED AS UNDER: THE ASSESSEE PRODUCED THE BOOKS OF ACCOUNT SUCH AS CASH BOOK, LEDGER, WHICH WERE EXAMINED. 2. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSE SSEE WAS ASKED TO PRODUCE COPY OF ACCOUNT OF ITS CREDITORS. ASSESSEE HAS PRODUCED A COPY OF ACCOUNT OF SH. JUGRAJ SINGH S/O SH. GURDEV SINGH OF VILL. RANDIALA FROM WHOM IT HAS RAISED RS.5,00,0 00/- LOAN ON 29.10.2005. THIS AMOUNT HAS BEEN ACCEPTED IN CASH. AS PER PROVISIONS OF SECTION 269SS OF INCOME TAX ACT THE LOANS ARE TO BE ACCEPTED THROUGH CHEQUE OR DEMAND DRAFT. THE ASSESSEE HAS V IOLATED THE PROVISIONS OF SECTION 269SS WHICH ATTRACTS THE PENA L ACTION UNDER SECTION 271D OF THE INCOME-TAX ACT. AFTER DISCUSSION THE RETURN INCOME OF RS.19,618/- O F THE ASSESSEE HAS BEEN ACCEPTED. ASSESSED. ISSUE REQUISITE DOCUMENTS. ITA NO.369(ASR)/2011 3 PENALTY NOTICE U/S 271D IS BEING ISSUE SEPARATELY. 4. THE AO IN THE PENALTY PROCEEDINGS SERVED THE SH OW CAUSE NOTICE DATED 19.01.2009 TO THE ASSESSEE ON 27.01.2009 BUT THE SAME REMAINED UNCOMPLIED WITH BY THE ASSESSEE. EVEN NO WRITTEN SU BMISSIONS WERE FILED BEFORE THE AO IN RESPONSE TO THE SAID SHOW CAUSE NO TICE. A FRESH SHOW CAUSE NOTICE DATED 24.04.2009 WAS SERVED ON THE ASSESSEE ON 27.04.2009 WHICH ALSO REMAINED UNCOMPLIED WITH. AGAIN, A SHOW CAUSE NOTICE WAS SERVED ON 12.05.2009, WHICH ALSO REMAINED UNCOMPLIED WITH. AC CORDINGLY, THE AO OBSERVED THAT THE ASSESSEE IS IN DEFAULT UNDER SECT ION 269SS OF THE INCOME- TAX ACT, 1961, WHICH ATTRACTS PENALTY U/S 271D OF T HE ACT AND ACCORDINGLY LEVIED A PENALTY OF RS.5 LACS U/S 271D OF THE ACT. 5. BEFORE THE LD. CIT(A), THE LD. COUNSEL FOR THE A SSESSEE ARGUED THAT THE ASSESSEE IS DEALING ONLY WITH AGRICULTURISTS WHO AR E MOSTLY ILLITERATE AND ARE NOT IN THE HABIT OF OPERATING BANK ACCOUNT. IT WAS ALSO SUBMITTED THAT THE SAID LOAN IN UTMOST NEED AND UNDER DIRE CIRCUMSTANCES WA S TAKEN. THE EXIGENCY OF THE CIRCUMSTANCES AS SUBMITTED BY THE LD. COUNSE L BEFORE THE LD. CIT(A) WERE THAT THE LOAN WAS TAKEN ON REPAYMENT OF ANOTHE R BANK LOAN. THE LD. CIT(A) BEING NOT SATISFIED WITH THE ARGUMENTS MADE BY THE LD. COUNSEL CONFIRMED THE ACTION OF THE A.O. FOR LEVYING THE PE NALTY U/S 271D OF THE ACT. ITA NO.369(ASR)/2011 4 6. THE LD. COUNSEL FOR THE ASSESSEE, SH. RAVISH SOO D, ADVOCATE, ARGUED THAT THE ASSESSEE HAD ACTED WITH A BONAFIDE BELIEF THAT SUCH AMOUNT DOES NOT ATTRACT ANY PENALTY. THE TRANSACTION HAS BEEN DULY RECORDED IN THE BOOKS OF ACCOUNT IS NOT IN DISPUTE. THE GENUINENESS OF LOAN S IS ALSO NOT IN DISPUTE. THE ASSESSEE HAD PRODUCED BOOKS OF ACCOUNT VOLUNTAR ILY AND THERE IS NO LOSS OF REVENUE, EVEN IF LOAN HAD BEEN ACCEPTED IN CASH BY THE ASSESSEE. THE ASSESSEE IS NOT A HABITUAL OFFENDER. THE SAID LOAN HAS BEEN TAKEN FROM AGRICULTURIST. IT WAS ARGUED BY THE LD. COUNSEL SH. RAVISH SOOD THAT THERE WAS A DEATH IN FAMILY AND THEREFORE, THE ASSESSEE COULD NOT ATTEND THE PENALTY PROCEEDINGS BEFORE THE A.O. IN SUPPORT OF HIS CONTE NTION, THE LD. COUNSEL RELIED UPON THE FOLLOWING DECISIONS: I) CIT VS. SUNIL GOEL (2009) 315 CTR 164 (P&H) II) CIT VS. SAINI MEDICAL STORE (2005) 276 ITR 79 (P&H) III) HARPAL SINGH JASWANT SINGH VS. ITO (1995) 51 TTJ (A SR) 383 IV) RAJIANA KHETI STORE VS. ITO (2006) 99 TTJ(ASR) 576 7. THE LD. DR, MR. R.L. CHHANLIA, ON THE OTHER HAND , ARGUED THAT THE ASSESSEE WHO HAS BEEN CLAIMING TO BE A KACHA ARHATI A CANNOT BE TREATED AS AN ILLITERATE PERSON IN THE ABSENCE OF EVIDENCE ON RECORD. THE LD. COUNSEL HAS NOT BROUGHT ON RECORD THAT THE ASSESSEE AS KACHA AR HATIA IS AN AGRICULTURIST ITA NO.369(ASR)/2011 5 ONLY OR THE PERSON FROM WHOM LOAN HAS BEEN TAKEN IS AN AGRICULTURIST AND DOES NOT HAVE ANY BANK ACCOUNT. THE ASSESSEE DURING THE ASSESSMENT PROCEEDINGS OR IN THE PENALTY PROCEEDINGS OR IN THE APPELLATE PROCEEDINGS BEFORE THE LD. CIT(A) HAS NOT BROUGHT ANY EVIDENCE ON RECORD OR ANY EXPLANATION TO PROVE THAT THE ASSESSEE WAS ACTING I N A BONAFIDE BELIEF AND THERE WAS A BUSINESS EXIGENCY. THE ASSESSEE COULD N OT ESTABLISH THE REASONABLE CAUSE BEFORE ANY OF THE AUTHORITIES BELO W OR EVEN BEFORE THIS BENCH. THE CASES RELIED UPON ARE DISTINGUISHABLE ON THE FACTS OF THE PRESENT CASE. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE FACTS OF THE CASE. THE LD. COUNSEL FOR THE ASSESSEE, SH. RAVISH SOOD H AS FILED PAPER BOOK CONTAINING 96 PAGES. OUT OF WHICH PAGE 1 TO 8 ARE T HE WRITTEN SUBMISSIONS, WHICH IN FACT, HAVE NOT BEEN READ BEFORE US. PAGE 9 OF THE PAPER BOOK IS THE PHOTOCOPY OF CASH BOOK WHICH CONTAINS ON ONE SIDE DEPOSIT OF RS. 5 LACS CASH FROM SH. JUGRAJ SINGH S/O SH. GURDEV SINGH AND ON THE OTHER SIDE DEPOSIT OF CASH WITH P.S.B AMOUNTING TO RS.5,10,726 /- IN CASH ON 29.10.2005. FROM PAPER BOOK PAGES 10 TO 96 THERE AR E COPIES OF DECISIONS OF VARIOUS COURTS OF LAW. IN FACT, THERE IS ONLY ONE P AGE OF THE CASH BOOK SHOWING DEPOSIT OF MR. JUGRAJ SINGH AND THE PAYMENT OF RS.5,10,726/- TO THE ITA NO.369(ASR)/2011 6 BANK ON 29.10.2005. THE SAID PAGE IS UNSIGNED BY TH E ASSESSEE OR BY THE LD. COUNSEL FOR THE ASSESSEE AND HAS NO VALIDITY IN TH E PRESENT CASE. THERE IS NO OTHER EXPLANATION PLACED ON RECORD BY THE LD. COUN SEL FOR THE ASSESSEE GIVEN BEFORE ANY OF THE AUTHORITIES BELOW. THE LD. COUNSE L HAD ADVANCED THE ARGUMENTS BEFORE THIS BENCH AS MENTIONED HEREINABOV E WITHOUT ANY DOCUMENTARY EVIDENCE OR WITHOUT FURNISHING ANY EXPL ANATION BEFORE ANY OF THE AUTHORITIES BELOW OR EVEN BEFORE US. NOW THE QU ESTION ARISES WHETHER ARGUMENTS ADVANCED BY THE LD. COUNSEL APPEARING FOR THE ASSESSEE BEFORE THIS BENCH CAN TAKE SHAPE OF THE EXPLANATION BEFORE BOTH THE AUTHORITIES BELOW OR EVEN BEFORE US AND THAT TOO WITHOUT ANY DOCUMENTARY EVIDENCE OR COGENT EXPLANATION. TO OUR VIEW SUCH ARGUMENTS CANNOT BE T REATED AS EXPLANATION BEFORE ANY OF THE AUTHORITIES BELOW OR EVEN BEFORE US. THE ASSESSEE HAS RELIED UPON THE DECISIONS OF VARIOUS COURTS OF LAW. AS REGARDS THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. SUNIL GOEL (SUPRA), THE FACTS IN THAT CASE ARE QUITE DISTINGU ISHABLE WITH THE FACTS OF THE PRESENT CASE. IN THE PRESENT CASE, THE ASSESSEE HAD NOT TRANSACTED BETWEEN THE FAMILY HAS NOT BEEN ESTABLISHED AS AGAINST IN THE C ASE OF CIT VS. SUNIL GOEL (SUPRA). THE ASSESSEE HAS NOT ESTABLISHED THE BUSIN ESS EXIGENCY IN THE PRESENT CASE AS IN THE CASE OF CIT VS. SUNIL GOEL ( SUPRA). IN THE PRESENT CASE, NO URGENCY OR BUSINESS EXIGENCY HAS BEEN ESTABLISHE D BY RAISING A LOAN OF ITA NO.369(ASR)/2011 7 RS. 5 LACS AND THAT TOO ON 29.10.2005. THE ASSESSEE HAS NOT PRODUCED BEFORE ANY OF THE AUTHORITIES BELOW OR EVEN BEFORE US THAT THERE WAS A DEAD LINE THAT THE AMOUNT WAS REQUIRED TO BE DEPOSITED WITH THE BA NK ONLY ON 29.10.2005 AND THEREAFTER THE ASSESSEE WAS TO BE HEAVILY PENAL IZED OR SOME DIRE CONSEQUENCES WERE IN THE OFFING BY THE BANK. IN THE ABSENCE OF ANY BUSINESS EXIGENCY, THE REASONABLE CAUSE CANNOT BE ESTABLISHE D. THE ASSESSEE HAS NOT BROUGHT ON RECORD BEFORE ANY OF THE AUTHORITIES BEL OW OR EVEN BEFORE US THAT THE PERSONS FROM WHOM LOAN HAS BEEN TAKEN IS AN AGR ICULTURIST AND DOES NOT MAINTAIN ANY BANK ACCOUNT. NOTHING HAS BEEN BROUGH T ON RECORD THAT THE ASSESSEE BEING KACHA ARHTIA IS ALSO AN AGRICULTURI ST AND DOES NOT MAINTAIN ANY BANK ACCOUNT. THE ASSESSEE COULD NOT ESTABLISH THAT THE SAID TRANSACTION WAS WITHOUT ANY INTENTION TO AVOID TAX, SINCE IGNOR ANCE OF LAW CANNOT BE AN EXCUSE IN THE PRESENT FACTS AND CIRCUMSTANCES OF TH E CASE. THEREFORE, THE DECISION IN THE CASE OF CIT VS. SAINI MEDICAL STORE (SUPRA) IS ALSO DISTINGUISHABLE IN THE PRESENT FACTS AND CIRCUMSTAN CES OF THE CASE. THE OTHER CASES RELIED UPON BY THE LD. COUNSEL FOR THE ASSESS EE ARE ALSO DISTINGUISHABLE IN THE PRESENT FACTS AND CIRCUMSTANCES AND CANNOT H ELP THE ASSESSSEE. IN THE FACTS AND CIRCUMSTANCES, THE ASSESSEE IS NOT ABLE T O PROVE THAT THERE WAS A REASONABLE CAUSE IN TAKING OR ACCEPTING ANY LOAN OR DEPOSIT OTHERWISE BY AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT. T HEREFORE, WE FIND NO INFIRMITY IN ITA NO.369(ASR)/2011 8 THE ACTION OF THE LD. CIT(A), WHO HAS RIGHTLY CONFI RMED THE PENALTY LEVIED BY THE A.O. ACCORDINGLY, ALL THE GROUNDS OF THE ASS ESSEE ARE DISMISSED. 9. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN IT A NO.369(ASR)/2011 IS DIMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 20TH SEPTEMBER, 2012. SD/- SD/- (H.S. SIDHU) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 20TH SEPTEMBER, 2012 /SKR/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE:M/S. CHARAN DASS ASHOK KUMAR, MOGA. 2. THE ADDL. CIT, MOGA RANGE, MOGA. 3. THE CIT(A), 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER