Addll. CIT, Meerut V. Sh. Charan Singh Yadav, Meerut

ITA 3725/DEL/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 2185 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2009
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2004-2005
• Appeal Filed On: 02-09-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Reasonable cause; Competent authority
• Section: 273B; 143(3); 271D

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : B NEW DELHI BEFORE SHRI DEEPAK R SHAH, ACCOUNTANT MEMBER AND SHRI RAJPAL YADAV, JUDICIAL MEMBER I.TA. NO. 3725/DEL./09 ASSTT. YEAR 2004-05 ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE-1, MEERUT. VS. SHRI CHARAN SINGH YADAV, BH-72, PALLAVPURAM, MEERUT . (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ALOK SINGH, DR RESPONDENT BY : SHRI M.P. RASTOGI, ADVOCATE ORDER PER DEEPAK R SHAH, ACCOUNTANT MEMBER THIS APPEAL HAS BEEN FILED BY THE REVENUE AGAINST THE ORDER OF LD. CIT(A) MEERUT DATED 6.7..2009 IN AN APPEAL AGAINST THE ORD ER LEVYING PENALTY U/S 271D OF THE INCOME TAX ACT 1961 (THE ACT). 2. THE REVENUE CHALLENGES IN CANCELING THE PENALTY LEVIED U/S 271D OF THE ACT. THE FACTS OF THE CASE LEADING TO LEVY O F PENALTY U/S 271D AS CONSIDERED BY LD. CIT (A) ARE AS UNDER :- 3. THE FACTS AS GATHERED FROM THE RECORD ARE AS FOL LOWS :- THE ASSESSEE FILED HIS RETURN OF INCOME DECLARING A TOTAL INCOME OF RS. 1,41,940/- ALONG WITH THE AGRICULTURAL INCOME OF RS . 25,000/- ON 23.3.2005. LATER ON THE CASE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED U/S 143(3) OF THE INCOME TAX ACT ON 26.12 .2006 ON A TOTAL INCOME OF RS.3,91,950/-ALONG WITH THE AGRICULTURAL INCOME OF RS.25,000/- DURING THE YEAR UNDER CONSIDERATION THE APPELLANT H AD PURCHASED THE ITA NO. 3725/DEL/09 ASSTT. YEAR 2004-05 2 AGRICULTURE LAND FOR CONSIDERATION OF RS. 14,40,000 /- ON 31.7.2003 FROM SHRI MAUJI RAM S/O BALVANT SINGH R/O VILL. KHORA PA RGANA LONI, GHAZIABAD. THE APPELLANT IS BASICALLY AN AGRICULTUR IST AND ALSO RESIDING IN HIS VILLAGE ISHA PUR, TEHSIL SHIKENDRABAD DISTT. BU LANDSHAHAR, WHICH IS ALSO EVIDENT FROM SALES-DEED EXECUTED ON 31.7.2003 AT NOIDA. HE IS STATE GOVERNMENT EMPLOYEE ALSO. THE WHOLE CONSIDERA TION OF ABOVE STATED SALE-DEED I.E. RS. 14,40,000/- WAS PAID BY T HE APPELLANT TO THE SELLER IN CASH (PAGE 9 OF SALE-DEED). THE APPELLANT HAD RAISED CE RTAIN TEMPORARY LOANS/ADVANCES IN CASH FROM THEIR FAMILY MEMBERS NAMELY HIS MOTHER, WIFE AND UNCLE FOR MAKING AFORESAID PAYMENT S OF RS. 14,40,000/- TO THE SELLER OF AGRICULTURAL LAND. THE DETAILS OF CASH LOANS ARE AS UNDER :- S.NO. NAME OF LANDER AMOUNT OF TEMPORARY LOAN IN CASH RELATION WITH THE APPELLANT 1 SMT. SHAKUNTALA DEVI W/O LATE SHRI VEER SEN YADAV R/O VILL. ISHA PUR, TEHSIL SHIKENDRABAD DISTT. BULANSHAHAR RS. 2,00,000/- (OUT OF WHICH AN AMOUNT OF RS. 50,000/- HAS BEEN ACCEPTED BY THE A.O.) MOTHER, AGED 82 YEARS 2. SMT. PRABHA YADAV W/O APPELLANT RS. 3,10,000/- WIFE 3 LAL SINGH YADAV S/O LATE SHRI LAKHI RAM YADAV R/O VILL. ISHA PUR,TEHSIL SHIKENDRABAD, DISTT. BULANSHAHAR RS.90,000/- UNCLE, AGED 80 YEARS DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE A SSESSING OFFICER NOTICED THAT THE APPELLANT HAD TAKEN THE AFORESAID CASH LOANS. ACCORDINGLY, THE COMPETENT AUTHORITY, AO FOR SUCH VIOLATION OF SECTI ON 269SS OF I.TAX ACT 1961 HAD ISSUED A SHOW CAUSE NOTICE U/S 271D OF THE I.TA X ACT ON 12.02.2007 TO PROVIDE AN OPPORTUNITY OF BEING HEARD. IN RESPONSE TO THAT, THE ASSESSEE COUNSEL FILED THE WRITTEN EXPLANATION AND SUBMISSIONS AND F URTHER AFTER CONSIDERING IT, THE ADDITIONAL CIT, RANGE-1, MEERUT IMPOSED A PENALTY U /S 271D OF THE I.TAX ACT AT RS. 4,50,000/- VIDE HIS ORDER DATED 19.7.2007. ITA NO. 3725/DEL/09 ASSTT. YEAR 2004-05 3 4. BEFORE LD. CIT (A) IT WAS SUBMITTED AS UNDER :- (1) THAT AS REGARDS THE LOAN AMOUNTING TO RS. 50,00 0/- FROM SMT. SHAKUNTALA DEVI AGED ABOUT 82 YEARS, ENJOYING THE A GRICULTURAL INCOME AND ALSO GETTING THE FAMILY PENSION. SHE IS SUFFERI NG FROM PERKINSAN SO SHE CAN MARK HER THUMB IMPRESSION ONLY. SHE IS NOT AVAILING THE CHEQUE FACILITY FROM BANK. UNDER SUCH CIRCUMSTANCES THERE WAS NO OTHER ALTERNATIVE EXCEPT TO GIVE THE LOAN IN CASH. MOREOV ER SHE IS THE MOTHER OF ASSESSEE, SO THE TRANSACTION IS IN BLOOD RELATION. HER TOTAL EARNINGS ARE MUCH BELOW THE TAXABLE LIMIT BEING SENIOR CITIZEN. SMT. SHAKUNTALA DEVI HAS HER BANK A/C AT GULAOTHI ( BULANDSHAHAR) WHICH IS ABOUT 10KMS. AWAY FROM HER RESIDENCE AT VILLAGE ISAPUR, DISTT. BULANDSHAHAR) SO IT IS NOT FEASIBLE TO WITHDRAW PER SONALLY EVERY TIME FROM BANK OR TO ISSUE CHEQUES. MAJOR PART OF HER INCOME IS FROM AGRICULTURE. (2) THAT AS REGARDS THE LOAN FROM SHRI LAL SINGH AM OUNTING TO RS. 90000/- (NINETY THOUSAND ONLY), HE IS ALSO 81 YEARS OF AGE. HE HAS HIS BANK A/C AT BULANDSHAHAR AT 15KMS. DISTANCE FROM HI S RESIDENCE AT VILLAGE ISHAPUR, DISTT. BULANDSHAHAR WITHOUT CHEQUE FACILITY. HE IS ENJOYING AGRICULTURE INCOME AS EVIDENT FROM RECORD. THIS LOA N IS ALSO IN BLOOD RELATIONSHIP AS HE IS THE UNCLE OF THE ASESEE/APPEL LANT. (3) THAT AS REGARDS THE LOAN AMOUNTING TO RS. 3,10, 000/- FROM SMT. PRABHA YADAV, WIFE OF THE APPELLANT, IT IS WELL EST ABLISHED THAT A SUM OF RS. 1,50,000/- HAS BEEN WITHDRAWN FROM HER BANK A/C ON 19.7.2003 AND RSWT OF THE SUM OF RS. 1,60,000/- WAS FROM HER AGRI CULTURAL EARNINGS. HER STATUS AS AN AGRICULTURIST HAS BEEN ESTABLISHED BEF ORE THE LEARNED ASSESSSIGN OFFICER. (4) THAT THERE WAS NO MENSREA EITHER TO VIOLATE THE PROVISIONS OF THE ACT OR TO EVADE THE TAX. ALL THE LOANS HAS BEEN TAK EN UNDER BONA FIDE BELIEF SO IN THE ABSENCE OF MALAFIDE INTENTION NO P ENALTY CAN BE IMPOSED. (5) THAT THE APPELLANT HAS UTLISED THE ENTIRE AMOUN T FOR THE PURCHASE OF AGRICULTURAL LAND WHERE IT IS NOT POSSIBLE TO MAKE THE BANK TRANSACTION AS PER THE SWEET WILL OF THE SELLER. 5. LD. CIT (A) HELD THAT OBJECT OF PROVISION OF SEC TION 269SS BEING UNACCOUNTED MONEY . IT IS NOT APPLICABLE TO ANY TRA NSACTION WHICH IS A GENUINE ONE AND IN WHICH NO UNACCOUNTED MONEY IS INVOLVED. MERE TECHNICAL BREACH ITA NO. 3725/DEL/09 ASSTT. YEAR 2004-05 4 WILL NOT ATTRACT THE PENALTY U/S 271D. HE ALSO HELD THAT THE ASSESSEE WAS IN URGENT NEED OF MONEY FOR PURCHASING AGRICULTURAL LA ND AND HAS APPROACHED HIS FAMILY MEMBERS FOR ADVANCEMENT OF MONEY RECEIVED AS TEMPORARILY ADVANCES IN THE IMMEDIATE NEED OF MONEY THE PERSON NORMALLY APP ROACHES HIS OWN FAMILY MEMBERS TO SATISFY THE IMMEDIATE REQUIREMENT WHICH CANNOT BE CONSIDERED AS TRANSACTION TO AVOID PAYMENT OF TAX OR TO DEFRAUD T HE REVENUE. THIS AMOUNTS TO A REASONABLE CAUSE WITHIN A MEANING OF 273BOF THE ACT AND HENCE THE PENALTY U/S 271D IS NOT LEVIABLE. 6. THE REVENUE IS IN FURTHER APPEAL BEFORE US. 7. WE HAVE HEARD THE PARTIES. PENALTY U/S 271D IS A TTRACTED WHERE ANY PERSON TAKES OR ACCEPTS ANY LOAN OR DEPOSIT IN CONT RAVENTION OF PROVISION 269SS OF THE ACT. SECTION 269SS PROVIDES THAT NO PERSON SHALL TAKE OR ACCEPT FROM ANY OTHER PERSON ANY LOAN OR DEPOSIT OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT IF THE AMOUNT OF SUCH LOAN OR DEPOSIT EXCEEDS RS. 20,000/-. SECTION 273 B PROVIDES THAT PENALTY U/S 271D IS NOT IMPOSABLE IF THE ASSESSEE PROVES THAT THERE WAS REASONABLE CAUSE FOR THE SAID FAILURE. CONSIDERING THE FACTS OF PRESENT CASE WE FIND THAT THE ASSESSEE TO PAY THE IMMEDIATE NEED ARISING OUT TO PURCHASE OF AGRICULTU RAL LAND WHICH WAS TO BE PAID IN CASH, APPROACHED HIS OWN MOTHER, WIFE AND UNCLE FOR THE SHORTFALL OF MONEY IN HIS POSSESSION. AMOUNT RECEIVED FROM MOTHER, WIFE A ND UNCLE CANNOT BE BRANDED AS LOAN OR ADVANCES BUT BY WAY OF ASSISTANCE OR NEE D. UNDER THE INDIAN TRADITION OF JOINT FAMILY, IF A PERSON RECEIVES AMOUNT FROM H IS OWN MOTHER OR WIFE CANNOT BE SAID TO HAVE TAKEN OR ACCEPTED ANY LOAN WHICH HE MA Y OR MAY NOT REPAY. THE ITA NO. 3725/DEL/09 ASSTT. YEAR 2004-05 5 AMOUNT IS RECEIVED RATHER BY WAY OF GIVING ASSISTAN CE TO THE PERSON AND CANNOT BE ATTRACTED STRICTLY AS LOAN OR ADVANCE REPAYABLE ON DEMAND. THE ASSESSEE WAS IN URGENT NEED OF MONEY FOR PAYMENT OF PURCHASE CON SIDERATION FOR AGRICULTURAL LAND. THE ASSESSEE AS WELL AS HIS MOTHER, WIFE AND UNCLE ARE BASICALLY AN AGRICULTURISTS AND THOUGH HAVING BANK ACCOUNT , ON THE MOMENT IT WAS NOT FEASIBLE TO PUT THE MONEY IN BANK ACCOUNT, THEN TO OBTAIN CHEQUES AND THEN AGAIN AFTER CLEARING SUCH CHEQUES TO WITHDRAW FROM BANK ACCOUNT FOR FURTHER PAYMENTS FOR PURCHASE OF AGRICULTURAL LAND. IN SUCH CIRCUMSTANCES IF THE ASSESSEE ACTED BONAFIDE, IT WILL AMOUNT TO A REASON ABLE CAUSE WITHIN A MEANING OF 273B OF THE ACT WAS AS TO ABSOLVE THE ASSESSEE F ROM CLUTCHES OF PENAL PROVISION U/S 271D OF THE ACT. WE THEREFORE CONFIR M THE ORDER OF LD. CIT (A). 8. IN THE RESULT THE APPEAL IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 18.12.2009 [RAJPAL YADAV] [DEEPAK.R. SHAH) JUDICIAL MEMBER ACCOUNTANT MEMBER VEENA DATED : 18.12.2009 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT TRUE COPY BY ORDER, D EPUTY REGISTRAR, ITAT