Vijayaben G Zalavadia, Gandhinagar V. The Jt. CIT, Gandhinagar Range, Gandhinagar

ITA 491/AHD/2023

AI Insights

The case revolves around the imposition of a penalty under Section 271D of the Income Tax Act, 1961, for alleged contravention of Section 269SS, which prohibits acceptance of loans in cash exceeding Rs. 20,000. The assessee, Vijayaben G. Zalavadia, an agriculturist, was accused of accepting a cash loan of Rs. 1,42,000 from a cooperative society. However, the assessee contested that the loan was received through a banking channel, supported by bank statements and other documentary evidence. The Assessing Officer initially imposed the penalty, which was upheld by the CIT(A). The Tribunal, upon review, found that the transaction was indeed through a banking channel and not in cash, leading to the allowance of the appeal and the setting aside of the penalty.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 131566 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 30-08-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 08-06-2023
• Other Referred Cases: Vijayaben G. Zalavadia vs. JCIT for assessment year 2013-14 and 2016-17
• Laws Referred To: Section 271D, Section 269SS
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Tax effect
• Section: 271D

Judgement Text

THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH Before: Ms Suchitra Kamble, Judicial Member Vijay aben Go kalbh ai Zalavadia, Gand hi Nagar, Secto r-21, 1 03/2 CH Ty pe Gandhi Nagar, Gandhinagar, Gujarat PAN: AABPZ3 046L (Appellant) Vs The JCIT, Gandhin agar Range, Gandhin agar (Resp ondent) Asses see b y : Shri R. B. Patel, A. R. Revenue by : M s. Sa umy a Pan dey Ja in, Sr. D. R. Date of hearing : 31-08 -2 023 Date of pronouncement : 06-09 -2 023 आदेश /ORDER This appeal is filed by the assessee against the order dated 12-05-2013 passed by the ld. CIT(A) for assessment year 2011-12. 2. The grounds of appeal are as under:- Sr. No . Grounds of Appeal Tax effect relating to each Ground of appeal (see note below) ITA No. 491/Ahd/2023 Assessment Year 2011-12 I.T.A No. 491/Ahd/2023 A.Y. 2011-12 Page No. Vijayaben G. Zalavadia vs. JCIT 2 The order passed by Ld CIT(A) is against law, equity and natural justice. N.A. 2. The Ld. CIT(A) has erred in law and on facts in upholding the penalty levied U/S 271D by Ld. JCIT Gandhinagar of Rs. 1,42,000/- Rs. 1,42,000- 3. The Ld. CIT (A) has erred in law and on facts confirming impugned penalty initiated and levied in the absence of regular assessment. N.A. 4. The Ld. CIT (A) has erred in law and on facts in confirming and levying penalty in contravention of Section 269SS ignoring the fact that payments were through banking channel. N.A. 5. The appellant craves liberty to add. amend, alter or modify all or any grounds of appeal before final appeal. N.A. Total tax effect Rs. 1,42,000/- 3. The assessee is an agriculturist having agricultural income in the form of salary. The Assessing Officer on receipt of information from DDIT (Investigation) observed that assessee accepted loan of Rs. 1,42,000/- during relevant period from The Berna Gamni Seva Sahakari Mandali Limited. Based on the information, the Assessing Officer issued show cause notice dated 13-05-2019 for levy of penalty u/s. 271D in contravention of section 296SS of the Act. The assessee filed reply dated 20-05-2019 thereby stating that acceptance of loan of Rs. 1,42,000/- from the society was through I.T.A No. 491/Ahd/2023 A.Y. 2011-12 Page No. Vijayaben G. Zalavadia vs. JCIT 3 banking channel and not in cash. The assessee submitted the bank statement wherein transaction of taking the said loan was demonstrated along with documentary evidences. The Assessing Officer after taking cognizance of the reply of the assessee imposed penalty u/s. 271D amounting to Rs. 1,42,000/- for acceptance of cash loan in contravention of provisions of section 269SS of the Act. 4. Being aggrieved by the said penalty order, the assessee filed appeal before the ld. CIT(A). The ld. CIT(A) dismissed the appeal of the assessee. 5. The ld. Authorized Representative submitted that the issue contested in the present appeal has already been decided by the Tribunal in assessee’s own case for assessment year 2013-14 and 2016-17 being ITA Nos. 338 & 339/Ahd/2023 order dated 14-07-2023. The facts are identical and therefore the present appeal should also be allowed. 6. The ld. Departmental Representative relied upon the penalty order and the order of the ld. CIT(A) and further submitted that the certificate issued by the bank was not disputed but the adjustments were not matching or co- related and therefore the penalty was rightly imposed and confirmed by the ld. CIT(A) 7. Heard both the parties and perused the material available on record. It is pertinent to note that since the assessee was an agriculturist and deriving income related to agricultural activities, as on salary there was no regular assessment in assessee’s case. The Assessing Officer at no point of time I.T.A No. 491/Ahd/2023 A.Y. 2011-12 Page No. Vijayaben G. Zalavadia vs. JCIT 4 disputed the bank statement of the assessee wherein the amount of Rs. 1,42,000/- was transferred in The Berna Gamni Seva Sahakari Mandali Ltd. and the same was shown in the bank statement dated 26-03-2011. The transaction as well as the ledger along with the certificate was not doubted and in fact the contention of the ld. Departmental Representative that it was mismatching appears to be not correct and thus there was no cash involved in the present transaction. Therefore, section 269SS will not be applicable in the present case and the penalty levied u/s. 271D does not survive. Thus, the CIT(A) as well as the Assessing Officer was not correct in levying the penalty u/s. 271D of the Act. The appeal of the assessee is allowed. 8. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 06-09-2023 Sd/- (SUCHITRA KAMBLE) JUDICIAL MEMBER Ahmedabad : Dated 06/09/2023 आदेश क त ल प अ े षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/ आदेश से, उप/सहायक पंजीकार आयकर अपील य अ धकरण, अहमदाबाद