Shri Onkar Soni, Mandi V. JCIT, Range, Mandi

ITA 396/CHANDI/2019

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 3698 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-11-2019
• Assessment Year: 2007-2008
• Appeal Filed On: 05-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: A K JINDAL
• Keywords: Initiation of penalty proceedings
• Section: 271D

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH, SMC, CHANDIGARH , BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER ./ ITA NO. 396/CHD/2019 / ASSESSMENT YEAR : 2007-08 SHRI ONKAR SONI, VILLAGE KHANOT, P.O.BARLIN, TEHSIL BALDWARA,DISTT. MANDI (H.P.) VS. THE JCIT, RANGE MANDI, MANDI ./PAN NO. AFLPS2375E / APPELLANT /RESPONDENT ! /ASSESSEE BY : SHRI A.K. JINDAL ' ! / REVENUE BY : SH. MANJIT SINGH CIT DR # $ % /DATE OF HEARING : 07.11.2019 &'() % / DATE OF PRONOUNCEMENT : 07.11.2019 / ORDER THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 22.01.2019 OF THE COMMISSIONER OF INCOM E TAX (APPEALS), PALAMPUR [HEREINAFTER REFERRED TO AS CIT(A)]. 2. THE ASSESSEE IN THIS APPEAL HAS TAKEN FOLLOWING GROUNDS OF APPEAL:- 1. THAT THE LD. CIT(A) HAS ERRED IN LAW & FACTS OF THE CASE IN NOT COMPLYING WITH THE DIRECTIONS OF HON'BLE ITAT IN NOT ADJUDICATING THE ISSUE REGARDING THE VALIDITY OF PENALTY ORDER PASSED U/S 271D OF THE INCOME TAX ACT WHICH IS HIGHLY UNJUSTIFIED AND UNCALLED FOR. ITA NO. 396-CHD-2019- SHRI ONKAR SONI, MANDI 2 2. THAT THE LD. CIT(A) HAS ERRED IN LAW & FACTS OF THE CASE IN UPHOLDING THE PENALTY IMPOSED U/S 271D AMOUNTING TO RS. 7,00,000/.- WHICH IS HIGHLY UNJUSTIFIED AND UNCALLED FOR. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND OR MODIFY ANY GROUND OF APPEAL ON OR BEFORE THE DISPOSAL OF THE SAME. 3. THE SOLE ISSUE RAISED BY THE ASSESSEE IN THIS AP PEAL IS AGAINST THE ACTION OF THE LD. CIT(A) IN CONFIRMING THE LEVY O F PENALTY OF RS. 7 LACS LEVIED BY THE ASSESSING OFFICER U/S 271D OF TH E INCOME TAX ACT, 1961 (IN SHORT 'THE ACT'). IT IS PERTINENT TO MENTION HERE THAT EARLIER THE AS SESSEE HAD PREFERRED APPEAL BEFORE THE TRIBUNAL AGAINST THE OR DER OF CIT(A) DATED 27.1.2017 AGITATING THE CONFIRMATION OF LEVY OF IMP UGNED PENALTY. THE TRIBUNAL VIDE ORDER DATED 11.8.2017 REMANDED THE MA TTER BACK TO THE FILE OF THE CIT(A) FOR DECISION AFRESH. THE LD. CIT(A) A GAIN CONFIRMED THE PENALTY SO LEVIED BY THE ASSESSING OFFICER VIDE IMP UGNED ORDER DATED 22.01.2019, HENCE, THE ASSESSEE IS AGAIN IN APPEAL BEFORE THIS TRIBUNAL. 4. AT THE OUTSET, LD. COUNSEL FOR THE ASSESSEE HAS INVITED OUR ATTENTION TO THE PROVISIONS OF SECTION 269SS OF THE ACT, AS WERE APPLICABLE FOR THE ASSESSMENT YEAR UNDER CONSIDERAT ION, ALLEGEDLY IN VIOLATION OF WHICH THE ASSESSING OFFICER HAS LEVIED THE IMPUGNED PENALTY. THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMI TTED THAT THE ASSESSEE HAD RECEIVED AMOUNT OF RS. 7 LACS, IN CAS H, AS AGAINST ADVANCE FOR THE SALE OF PROPERTY. THAT SUBSEQUENTLY SECTION 269SS OF THE ACT ITA NO. 396-CHD-2019- SHRI ONKAR SONI, MANDI 3 MAKING PROHIBITION FOR RECEIPT OF ADVANCE AGAINST P ROPERTY HAS BEEN INTRODUCED W.E.F. 1.6.2015. THAT PRIOR TO 1.6.2015 , THERE WAS NO PROHIBITION IN RECEIVING ADVANCES IN CASH AGAINST S ALE OF PROPERTY. THE LD. COUNSEL HAS FURTHER INVITED OUR ATTENTION TO T HE STATEMENT DATED 27.11.2009 OF THE PAYER NAMELY SHRI RAM PAL MALIK RECORDED BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDING S. IN HIS STATEMENT SHRI RAM PAL MALIK HAS DULY CONFIRMED THAT HE HAD P AID THE AMOUNT OF RS. 7 LACS FOR PURCHASE OF PROPERTY TO THE ASSESSEE . EVEN THE COPY OF THE AGREEMENT TO SELL DULY NOTARIZED BY THE NOTARY PUBL IC WAS ALSO PRODUCED BEFORE THE ASSESSING OFFICER. THE ASSESSING OFFICER CONSIDERING THE STATEMENT OF SHRI RAM PAL MALIK, WHICH WAS CORROBO RATED WITH THE COPY OF AGREEMENT TO SELL DATED 1.2.2007, DID NOT MAKE A NY ADDITION INTO THE INCOME OF THE ASSESSEE IN THIS RESPECT. HOWEVER, L ATER ON, THE PENALTY PROCEEDINGS U/S 271D OF THE ACT HAVE BEEN INITIATE D BY THE JCIT TREATING THE SAID AMOUNT AS LOAN RECEIVED IN CASH A ND HE ACCORDINGLY HELD THAT THE ASSESSEE HAD VIOLATED THE PROVISIONS OF SECTION 269 SS OF THE ACT AND THEREBY IMPOSED PENALTY U/S 271D OF TH E ACT. 5. BEFORE THE BENCH, THE LD. COUNSEL FOR THE ASSESS EE CONTENDED THAT THE ASSESSEE HAD DULY PROVED THE FACTUM OF RECEIPT OF THE AFORESAID MONEY IN CASH AS ADVANCE AGAINST THE SALE OF PROPER TY AND ALSO PLEADED THAT THE SALE DEED OF THE PROPERTY, HOWEVER, WAS E FFECTED IN THE NAME OF THE FATHER OF PAYER NAMELY SHRI SUNDER LAL. HE ALSO PRODUCED THE COPY OF THE SALE DEED IN THIS RESPECT. HOWEVER, THE LD. CIT(A) DID NOT AGREE WITH THE CONTENTION OF THE ASSESSEE OBSERVING THAT THERE WAS A LONG DELAY ITA NO. 396-CHD-2019- SHRI ONKAR SONI, MANDI 4 BETWEEN THE DATE OF RECEIPT OF MONEY IN THE YEAR 20 07 AND THE EXECUTION OF SALE DEED IN THE YEAR 2014. 6. I HAVE HEARD THE RIVAL CONTENTIONS OF THE LD. AU THORIZED REPRESENTATIVES OF BOTH THE PARTIES. THE FACT WHIC H EMERGES FROM THE FILE IS THAT THERE IS NO DENIAL OR REBUTTAL OF EXEC UTION OF AGREEMENT TO SELL BY THE ASSESSEE WITH SHRI RAM PAL MALIK CORROB ORATED WITH THE STATEMENT OF SHRI RAM PAL MALIK RECORDED ON 27.11.2 009 BY THE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS. IT IS ALSO AN IMPORTANT FACT ON THE FILE THAT THE ASSESSING OFFICER DID NOT DOUBT THE VERACITY OF THE STATEMENT OF SHRI RAM PAL MALIK AND, THEREFORE, DID NOT MAKE ADDITION EITHER TO THE INCOME OF THE ASSESSEE OR I NTO THE INCOME OF SHRI RAM PAL MALIK IN RESPECT OF THE SAID AMOUNT OF RS. 7 LACS RECEIVED BY THE ASSESSEE IN CASH FROM SHRI RAM PAL MALIK. SH RI RAM PAL MALIK DULY CONFIRMED IN HIS STATEMENT THAT THE SAID AMOUN T WAS GIVEN BY HIM IN CASH TO THE ASSESSEE AS ADVANCE AGAINST SALE OF PROPERTY. PENALTY PROCEEDINGS U/S 271D OF THE ACT WERE INITIATED MUCH AFTER I.E. IN THE YEAR 2014 BY THE JCIT, HENCE, IT CANNOT BE SAID THAT THE SAID AGREEMENT TO SELL OR THE AVERMENTS MADE IN THE STAT EMENT RECORDED OF SHRI RAM PAL MALIK ON 27.11.2009 WAS AN AFTERTHOUGH T OR AFTERWARDS CREATED EVIDENCES. SINCE THE ASSESSEE HAS DULY EST ABLISHED, EVEN PRIOR TO THE INITIATION OF PENALTY PROCEEDINGS ABOUT THE TRA NSACTION OF RECEIPT OF ADVANCE IN CASH AGAINST THE SALE OF PROPERTY AND TH ERE WAS NO PROVISION OF SECTION 269SS IN THE STATUTE, AS IT STOOD DURIN G THE RELEVANT PERIOD. ITA NO. 396-CHD-2019- SHRI ONKAR SONI, MANDI 5 IN VIEW OF THIS, THERE IS NO JUSTIFICATION ON THE P ART OF THE LOWER AUTHORITIES IN LEVYING PENALTY U/S 271D OF THE ACT . 7. SO FOR AS THE OBSERVATIONS OF THE LD. CIT(A) TH AT THE SALE DEED WAS EXECUTED AFTER A LONG TIME, IN MY VIEW, IS NOT RELEVANT AS THE SALE DEED WAS FINALLY EXECUTED OR NOT. ONE MAY FIND MANY INSTANCES WHERE AGREEMENT TO SELL IS EXECUTED BETWEEN THE PARTIES B UT FINALLY FOR ONE REASON OR THE OTHER, THE SALE DEED COULD NOT BE EXE CUTED. SINCE DURING THE ASSESSMENT PROCEEDINGS AND PRIOR TO THE INITIAT ION OF PENALTY PROCEEDINGS, THE ASSESSEE HAD DULY PROVED THE EXECU TION OF AGREEMENT TO SELL AND RECEIPT OF ADVANCE THEREOF, HENCE, IN MY V IEW, THERE IS NO JUSTIFICATION ON THE PART OF THE LOWER AUTHORITIES EITHER IN LEVYING OR IN CONFIRMING THE PENALTY. THE SAME IS ACCORDINGLY ORD ERED TO BE DELETED. THE APPEAL OF THE STANDS ALLOWED. ORDER DICTATED AND PRONOUNCED IN THE OPEN COURT IMM EDIATELY ON COMPLETION OF HEARING. SD/- ( / SANJAY GARG) / JUDICIAL MEMBER DATED : 07.11.2019 .. '+ ,- .- / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. # / / CIT 4. # / ( )/ THE CIT(A) 5. -01 2 , % 2 , 34516 / DR, ITAT, CHANDIGARH 6. 15 7$ / GUARD FILE ITA NO. 396-CHD-2019- SHRI ONKAR SONI, MANDI 6 '+ # / BY ORDER, 8 ' / ASSISTANT REGISTRAR .