Sri Narayan Chandra Ghosh, Hooghly V. JCIT, Rg-I, Hooghly, Hooghly

ITA 397/KOL/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9591 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 06-03-2014
• Court: TRIBUNAL
• Keywords: Question of law
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : KOLKATA [BEFORE HONBLE SRI ABY T.VARKEY, JM & DR.A.L.SAI NI, AM] I.T.A NO. 397/KOL/201 4 ASSESSMENT YEAR : 2008-0 9 SHRI NARAYAN CHANDRA GHOSH -VS.- J.C.I.T. , RANGE-I, HOOGHLY HOOGHLY [PAN : ADIPG 1555 F] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI CHIRADIP MAHA LANABISH, C.A. FOR THE RESPONDENT : SHRI RAJAT KUMAR KUREEL, JCIT, SR.DR DATE OF HEARING : 04.01.2017. DATE OF PRONOUNCEMENT : 06 . 01.2017. ORDER PER ABY T.VARKEY, JM THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A)-XXXVI, KOLKATA DATED 10.12.2013 FOR A.Y 2008-09. 2. THE SOLE GROUND RAISED BY THE ASSESSEE IS AGA INST THE PENALTY LEVIED BY JOINT COMMISSIONER OF INCOME TAX WHICH HAS BEEN SUSTAINED BY THE LD. CIT(A) U/.S 271D OF THE ACT OF RS.1,00,000/- IMPOSED FOR CONTRAVENTION OF SECTION 269SS OF THE ACT. 3. AT THE OUTSET ITSELF THE LD. AR TOOK OUR ATTE NTION TO THE FACT THAT UNDISPUTEDLY THE LOAN AMOUNT HAS NOT EXCEEDED RS.20,000/- I.E. THE A SSESSEE HAS TAKEN LOAN FROM FIVE PERSONS OF RS.20,000/- EACH. ACCORDING TO THE LD. C OUNSEL AS PER THE DEPARTMENTS CIRCULAR NO.572 DATED 03.08.1990, THE PENALTY U/S 2 71D OF THE ACT WOULD BE ATTRACTED ONLY IF LOAN OR DEPOSIT IS IN EXCESS OF RS.20,000/- . THEREFORE SINCE THE DEPARTMENT IS BOUND BY CBDT CIRCULAR, THE PENALTY SHOULD NOT HAV E BEEN LEVIED ON THE ASSESSEE. ON THE OTHER HAND, THE LD. DR TOOK OUR ATTENTION TO SE CTION 269SS OF THE ACT WHEREIN THE LAW STIPULATES LOAN OR DEPOSIT OF RS.20,000/- OR MO RE. THEREFORE ACCORDING TO HIM THE LD. 2 ITA NO.397/KOL/2014 SRI NARAYAN CHANDRA GHOSH A.YR.2008-09 2 CIT(A) RIGHTLY CONFIRMED THE ORDER OF THE AO. HE DO ES NOT WANT TO INTERFERE WITH THE ORDER OF THE LD. CIT(A). 4. WE HAVE HEARD THE PARTIES AND PERUSED THE R ECORDS. WE FIND THAT IN A SIMILAR CASE WHEREIN THE ASSESEE HAD TAKEN LOAN OF RS.20,000/- F ROM SEVERAL PERSONS AND SIMILAR PENALTY U/S 271D WAS IMPOSED BY THE JT. COMMISSIONE R WAS BEFORE THE HONBLE BOMBAY HIGH COURT. THE VERY SAME PLEA THAT THE ASSE SSEE HAS RAISED BEFORE US THAT IS THE CIRCULAR OF THE CBDT (SUPRA) WHICH WAS RELIED U PON BY THE TRIBUNAL TO CANCELL THE PENALTY WAS UPHELD BY THE HONBLE BOMBAY HIGH COURT AS UNDER :- 4. IT IS NOW WELL SETTLED THAT CIRCULARS ISSUED BY CSDT ARE STATUTORY IN CHARACTER AND ARE BINDING ON THE DEPARTMENTAL AUTHORITIES. THE AUTHOR ITIES INCLUDING AA AND OTHER CONSEQUENTLY WOULD BE BOUND BY THAT CIRCULAR. IN TH E INSTANT CASE, CBDT FOR THE PURPOSE OF ATTRACTING S. 271 D HAS SET OUT THAT THE LOAN OR DEPOSIT SHOULD BE IN EXCESS OF RS. 20,000. IT IS TRUE THAT WHAT CBDT HAS STATED MAY BE CONTRARY TO THE EXPRESS LANGUAGE OF S. 269SS WHICH USES THE EXPRESSION 'TWENTY THOUSAND RU PEES OR MORE'. THE LAW AND THE CBDT CIRCULARS CAN BE SPELLED OUT FROM THE FOLLOWIN G JUDGMENTS OF THE SUPREME COURT. IN NAVNIT LAL C. JAVERI VS. K.K. SEN, AAC (1965) 56 IT R 198 (SC), A CONSTITUTION BENCH OF THE SUPREME COURT OBSERVED 'IT IS CLEAR THAT A CIRC ULAR OF THE KIND WHICH WAS ISSUED BY THE BOARD WOULD BE BINDING ON ALL OFFICERS AND PERS ONS EMPLOYED IN THE EXECUTION OF THE ACT UNDER S. 5(8) OF THE ACT.' NAVNIT LAL (SUPRA) W AS FOLLOWED IN ELLENNAN LINES LTD. VS. CIT 1972 CTR (SC) 71 : (1971) 82 LTR 913 (SC). IN V C-O BANK VS. ERR (1999) 154 CTR (SC) 88 : (1999) 237 HR 889 (SC), THE LAW WAS RESTA TED AND IT WAS HELD THAT CIRCULARS OF CBDT ARE LEGALLY BINDING ON THE REVENUE AND THIS BI NDING CHARACTER ATTACHES TO THE CIRCULARS EVEN IF THEY BE FOUND NOT IN ACCORDANCE W ITH THE CORRECT INTERPRETATION OF THE SECTION AND THEY DEPART OR DEVIATE FROM SUCH CONSTR UCTION, WHEN THEY ARE ISSUED IN EXERCISE OF THE STATUTORY POWERS UNDER S. 119. IT W AS HOWEVER CLARIFIED THAT THE BOARD CANNOT PRE- EMPT A JUDICIAL INTERPRETATION OF THE S COPE AND AMBIT OF THE PROVISION AND FURTHER COULD NOT IMPOSE A BURDEN ON THE TAXPAYER H IGHER THAN WHAT THE ACT ITSELF, ON A TRUE INTERPRETATION, ENVISAGES. IT WAS OBSERVED THA T THE BOARD HAS THE STATUTORY POWER UNDER S. 119 TO TONE DOWN THE RIGOUR OF THE LAW FOR THE BENEFIT OF THE ASSESSEE BY ISSUING CIRCULARS TO ENSURE A PROPER ADMINISTRATION OF THE FISCAL STATUTE. IN CST VS. INDRA INDUSTRIES (200 I) 168 CTR (SC) 50 : (200 I) 248 TT R 338 (SC), THE COULT FURTHER OBSERVED THAT THE TAXING AUTHORITY CANNOT BE HEARD TO ADVANCE AN ARGUMENT THAT IT IS CONTRARY TO THAT INTERPRETATION. 5. CONSIDERING THE CIRCULAR ISSUED BY THE CBDT AND THE LOAN BEING NOT IN EXCESS OF RS. 20,000 FROM EACH PERSON THE INTERPRETATION GIVEN BY THE TRIBUNAL TO THE SAID CIRCULAR, THE QUESTION OF LAW DOES NOT ARISE AND CONSEQUENTLY, TH E SAID APPEAL IS DISMISSED. THE AO COULD NOT HAVE ACTED CONTRARY TO THE CIRCULAR. 3 ITA NO.397/KOL/2014 SRI NARAYAN CHANDRA GHOSH A.YR.2008-09 3 5. ADMITTEDLY THE ASSESSEE HAS RECEIVED LOAN OF RS.20,000/- FROM FIVE PERSONS AND THAT THE LOAN AMOUNT DID NOT EXCEED RS.20,000/- SO THE ORDER OF THE HONBLE BOMBAY HIGH COURT IS RELIED UPON TO ORDER DELETION OF PEN ALTY OF RS.1,00,000/- LEVIED U/S 271D OF THE ACT. 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 06.01.2017. SD/- SD/- [DR.A.L.SAINI] [ ABY T.VARKEY ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 06. 01.2017. [RG PS] COPY OF THE ORDER FORWARDED TO: 1. SRI NARAYAN CHANDRA GHOSH,TALDANGA, G.T.ROAD, P. O., CHANDANNAGAR, DIST. HOOGHLY, PIN-712136. 2. J.C.I.T., RANGE-1, HOOGHLY. 3. CIT(A)-XXXVI, KOLKATA. 4. CIT-XX, KOLK ATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSTT.REGISTRAR, ITAT, KOLKATA BENCHES 4 ITA NO.397/KOL/2014 SRI NARAYAN CHANDRA GHOSH A.YR.2008-09 4