DCIT, CHENNAI V. Dr.Sujay Anand, CHENNAI

ITA 447/CHNY/2011

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 5209 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 07-03-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P B SEKARAN
• Keywords: Tax effect

Judgement Text

IN THE INCOME - TAX APPELLATE TRIBUNAL CHENNAI B BENCH, CHENNAI. BEFORE SHRI.U.B.S. BEDI J.M. & SHRI. N.S. SAINI A.M. I.T.A. NO S . 447 AND 448 / MDS/2011 ASSESSMENT YEAR: 200 6 - 0 7 THE DEPUTY COMMISSIONER OF INCOME TAX , COMPANY CIRCLE V( 3 ), FOURTH FLOOR, MAI N BUILDING, 121 N.H. ROAD, NUNGAMBAKKAM, CHENNAI 34. VS. DR. SUJAY ANAND, 4, 10 TH ST., NANDANAM, NANDANAM EXTENSION, CHENNAI 35 [PAN:A A KPS5124P ] (APPELLANT) (RESPONDENT) REVENUE BY : SHRI P.B. SEKARAN ASSESSEE BY : NONE ORDER PER U.B.S. BEDI, J.M . TH E S E TWO APPEAL S OF THE DEPARTMENT ARE DIRECTED AGAINST THE SEPARATE ORDER S PASSED BY THE LD. CIT(A) V , CHENNAI BOTH DATED 08 . 11 .2010 RELEVANT TO THE ASSESSMENT YEAR 200 6 - 0 7 , WHEREBY THE DEPARTMENT HAS CHALLENGED DELETION OF PENALTY OF ` . 2.00 LAKH S AND ` .8.50 LAKHS IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271D AND 271E RESPECTIVELY. ITA NO. 447/MDS/2011 2 THE LD. COUNSEL FOR THE ASSESSEE, AT THE VERY OUTSET SUBMITTED THAT THOUGH THE CBDT HAS ENHANCED THE FINANCIAL LIMIT FOR FILING OF APPEAL BEFORE THE TRIBUNAL TO ` .3.00 LAKHS OF TAX EFFECT AS PER INSTRUCTION NO.3 OF 2011 DATED 09.02.2011, YET, HERE THE AMOUNT INVOLVED IS ` .2.00 LAKKS ONLY AND IT WAS PLEADED FOR DISMISSING THE APPEAL OF THE DEPARTMENT AS NOT MAINTAINABLE AND I.T.A. NO S . 447 & 448 /MDS /1 1 2 THE LD. DR HAS NOT RAISED ANY OBJECTION TO THE PLEA OF TH E ASSESSEE S COUNSEL SO FAR AS THE AMOUNT IS CONCERNED, BUT PLEADED THAT SINCE APPEAL HAS BEEN FILED, SO IT SHOULD BE DECIDED ON MERITS. 3 . WE HAVE CONSIDERED RIVAL SUBMISSIONS AND MATERIAL ON RECORD. SINCE THE TAX EFFECT UNDER SECTION 271D IS LESS THAN THE LIMIT PRESCRIBED BY THE CBDT VIDE EARLIER INSTRUCTION AS WELL AS INSTRUCTION NO.3/2011 DATED 09.02.2011 AND THE DEPARTMENT HAS NOT MADE OUT A CASE TO ESTABLISH THAT THE ISSUE FALLS WITHIN THE EXCEPTIONS PROVIDED I N THE SAID CIRCULAR / INSTRUCTION AND F URTHER IN THE CASE OF CIT V. ASSOCIATED AGENCIES, CHENNAI - 600 034 REPORTED IN 295 ITR 496, THE HON BLE MADRAS HIGH COURT HAS HELD THAT APPEALS CANNOT BE FILED IN VIOLATION OF THE SAID CIRCULAR. THE HON BLE MADRAS HIGH COURT HAD ALSO REFERRED TO THE JUDGMENT OF HON BLE MADHYA PRADESH HIGH COURT IN THE CASE OF CIT VS. DIGVIJAY SINGH REPORTED IN (2007) 292 ITR 314, THE JUDGMENT OF HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. ZOEB Y. TOPIWALS (2006) 284 ITR 379 AND ALSO ANOTHER JUDGMENT OF HON BLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. CAMCO COLOUR CO., (2002) 254 ITR 565 FOR THE PROPOSITION THAT DIRECTIONS ISSUED BY THE BOARD ARE BINDING ON THE DEPARTMENT AND APPEAL FILED WHERE THE TAX EFFECT IS LESS THAN THAT PROVIDE D IN THE SAID INSTRUCTION IS NOT MAINTAINABLE. 3 . 1 HENCE, IN VIEW OF THE SAID CIRCULAR S AND RESPECTFULLY FOLLOWING THE PRECEDENTS FROM HO N BLE JURISDICTIONAL HIGH COURT AS NOTED ABOVE, THE APPEAL UNDER SECTION 271D IS DISMISSED IN LIMINE BEING NOT MAINTAI NABLE. I.T.A. NO S . 447 & 448 /MDS /1 1 3 ITA NO. 448/MDS/2011 4. SO FAR AS PENALTY IMPOSED UNDER SECTION 271E IS CONCERNED, THE LD. CIT(A) HAS INCORPORATED THE SUBMISSIONS OF THE ASSESSEE UN SUMMARIZED MANNER AS UNDER: THE APPELLANT HAS PAID A SUM OF ` .8,50,000/ - IN CASH TO MRS. D. SAI LAJA HER MOTHER. THE LEARNED ASSESSING OFFICER HAS TREATED THE ABOVE AS A REPAYMENT OF LOAN, WHICH IN FACT IS NOT SO. EVEN ASSUMING THAT THE SAID AMOUNT IS A LOAN THE FACT THAT THE AMOUNT WAS PAID TO THE PETITIONER S MOTHER AND THAT THE SAME WAS DULY ACCOU NTED BY HIS MOTHER AND THAT THERE WAS NO CONCEALMENT OF INCOME HAS NOT BEEN CONSIDERED BY THE ASSESSING OFFICER AND HAS LEVIED A PENALTY OF ` .8,50,000/ - U/S 271(E) OF THE INCOME TAX ACT. 4.1 AFTER CONSIDERING VARIOUS DECISIONS AND NOTING THE FACT THAT VA RIOUS HIGH COURTS HAVE HELD THAT IF AMOUNTS REPAID TO A RELATIVE/SISTER CONCERN, THE TRANSACTIONS ARE GENUINE AND THERE IS NO CONCEALMENT OF INCOME, PENALTY UNDER SECTION 271E IS NOT ATTRACTED BY LISTING CERTAIN DECISIONS, THE LD. CIT(A) HAS CONCLUDED TO A LLOW THE APPEAL OF THE ASSESSEE AS UNDER: I HAVE CONSIDERED THE FACTS ON RECORD AND SUBMISSIONS MADE BY THE APPELLANT ALONG WITH THE CASE LAWS. I FIND THAT THE CONTENTION OF THE APPELLANT APPEARS TO BE GENUINE AND I HEREBY DELETE THE LEVY OF PENALTY U/S 2 71E. 5. THE LD. DR STRONGLY PLEADED THAT THE CONCLUSION DRAWN BY THE LD. CIT(A) IS VERY SKETCHY AND IT DOES NOT CONTAIN THE BASIS AS TO HOW PENALTY IS NOT IMPOSABLE IN THIS CASE. SO, IN ALL FAIRNESS, THE ORDER OF THE LD. CIT(A) SHOULD BE SET ASIDE AND M ATTER SHOULD BE RESTORED BACK ON HIS FILE FOR RECONSIDERATION OF THE ISSUE AFRESH, WHEREAS, DESPITE SERVICE OF NOTICE [AD ON RECORD], THE ASSESSEE DID NOT APPEAR AT THE TIME OF HEARING. SO, WE PROCEED TO DECIDE THE APPEAL AFTER CONSIDERING THE ARGUMENTS OF LD. DR AND MATERIAL ON RECORD. I.T.A. NO S . 447 & 448 /MDS /1 1 4 6. AFTER HAVING CONSIDERED THE ARGUMENTS OF THE LD. DR AND MATERIAL ON RECORD, WE FIND THAT THE LD. CIT(A) HAS JUST DELETED THE PENALTY OF ` .8,50,000/ - IMPOSED UNDER SECTION 271E WITHOUT ELABORATELY DISCUSSING OR CONSIDERIN G THE ISSUE IN HAND AND RELEVANT PROVISIONS OF LAW AND ALSO AS TO HOW THE CITED DECISIONS ARE RELATED TO THE FACTS OF THE CASE IN HAND. THEREFORE, IN THE INTEREST OF JUSTICE AND TO HAVE FAIR PLAY IN THE MATTER, WE FIND IT JUST AND APPROPRIATE TO SET ASIDE THE ORDER OF THE LD. CIT(A) AND RESTORE THE MATTER BACK ON HIS FILE WITH REGARD TO PENALTY UNDER SECTION 271E FOR RECONSIDERATION OF THE APPEAL AND TO DECIDE IT AFRESH BY PASSING SPEAKING ORDER AFTER GIVING DUE OPPORTUNITY TO THE ASSESSEE AS WELL AS TO THE ASSESSING OFFICER. WE HOLD AND DIRECT ACCORDINGLY. 7. AS A RESULT, THE APPEAL OF THE DEPARTMENT UNDER SECTION 271D IS DISMISSED AND THE APPEAL WITH REGARD TO PENALTY UNDER SECTION 271E IS ALLOWED FOR STATISTICAL PURPOSE. O RDER PRONOUNCED SOON AF TER THE CONCLUSION OF HEARING ON 0 9 .05 .2011 . SD/ - SD/ - ( N.S. SAINI ) ACCOUNTANT MEMBER (U.B.S. BEDI) JUDICIAL MEMBER CHENNAI, DATED, THE. 0 9 . 0 5 .2011 VM/ - TO: THE ASSESSEE/A.O./CIT(A)/CIT/D.R .