ADDL CIT RG 8(2), MUMBAI V. SAWINDER SINGH KEER, MUMBAI

ITA 5182/MUM/2010

• Counselvise Citation: 518219914 RSA 2010
• Duration Of Justice: 1 year(s) 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-10-2011
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: H
• Assessment Year: 2005-2006
• Appeal Filed On: 23-06-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V V SHASTRI
• Assessee Lawyers: VIJAY C KOTHARI
• Keywords: Reasonable cause; Assessment record
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH: MUMBAI BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NO.5182/MUM/2010 (ASSESSMENT YEAR: 2005-06) INCOME TAX OFFICER 8(2)-2, ROOM NO.212/216A, 2ND FLOOR, AAYAKAR BHAVAN, M.K. ROAD MUMBAI -400 020 ....... APPELLANT VS SHRI SAWINDER SINGH KEER, FLAT NO.64, 6TH FLOOR, SILVER SEA CHS LTD., JUHU ROAD, JUHU, MUMBAI -400 049 ..... RESPONDENT PAN : AAUPS 5386 H APPELLANT BY : SHRI V.V. SHASTRI RESPONDENT BY : SHRI VIJAY C. KOTHARI DATE OF HEARING : 24. 08.2011 DATE OF PRONOUNCEMENT: 19.10.201 1 O R D E R PER R.S. PADVEKAR, JM: IN THIS APPEAL THE REVENUE HAS CHALLENGED THE IMPUG NED ORDER OF THE LD. CIT (A)-17 MUMBAI DATED 15.03.2010 FOR THE A.Y. 2005-06 DEALT WITH PENALTY LEVIED BY THE A.O. U/S.271D OF T HE ACT. THE REVENUE HAS TAKEN THE FOLLOWING EFFECTIVE GROUND:- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD. CIT (A) ERRED IN DELETING THE PENALTY OF ` 3,60,963/- U/S.271D WITHOUT APPRECIATING THE FACTS THAT SHRI SAWINDER SINGH KEER ITA 5182/M/2010 2 THE CONTRAVENTION OF THE PROVISIONS OF SECTION 269S S, THE ASSESSEE HAD ACCEPTED THE CASH LOANS AND ADVANCES. 2. THE FACTS PERTAINING TO THE ISSUE ARE IN NARROW COMPASS. THE ASSESSEE FILED THE RETURN OF INCOME FOR THE A.Y. 20 05-06 DECLARING TOTAL INCOME OF ` 1,43,990/-. THE RETURN FILED BY THE ASSESSEE WAS SELECTED FOR SCRUTINY AND ASSESSMENT WAS COMPLETED U/S.143(3 ) OF THE ACT. THE ASSESSEE IS A PARTNER IN M/S. TOP GEAR. AFTER COMPL ETION OF THE ASSESSMENT PROCEEDINGS, ADDL. CIT, RAGE 8(2), MUMBA I ISSUED SHOW CAUSE NOTICE DATED 8.5.2008 TO THE ASSESSEE SEEKING THE EXPLANATION ON THE PENALTY LEVIED U/S.271D SHOULD NOT BE LEVIED FOR THE CONTRAVENTION OF SEC.269SS OF THE I.T. ACT IN RESPE CT OF CERTAIN LOAN TRANSACTIONS AMOUNTING TO ` 88,000/-. THE ASSESSEE FILED THE REPLY STATING THAT WHENEVER HE WAS IN REQUIREMENT OF FUND S, HE WAS WITHDRAWING THE FUNDS FROM THE FIRM. HE FURTHER CON TENDED THAT ALL THE TRANSACTIONS ARE GENUINE AND NO PENALTY CAN BE LEVI ED. THE LD. CIT (A) REJECTED EXPLANATION OF THE ASSESSEE AND LEVIED THE PENALTY OF ` 3,60,963/- U/S.271D OF THE ACT. THE ASSESSEE CHALL ENGED THE PENALTY ORDER BEFORE THE LD. CIT (A) AND LD. CIT (A) DELETE D PENALTY. NOW, THE REVENUE IS IN APPEAL BEFORE US. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS OF THE PARTI ES AND PERUSED THE RECORDS. THE LD. D.R. SUBMITS THAT THERE IS NO REQUIREMENT OF MEANS REA FOR LEVYING THE PENALTY U/S.271D OF THE ACT. HE FU RTHER SUBMITS THAT THE EXPLANATION OF THE ASSESSEE IS VAG UE AND CANNOT BE TREATED AS THE REASONABLE CAUSE WITHIN MEANING OF SEC.269SS OF THE ACT. HE FURTHER SUBMITS THAT WHEN THE ASSESSEE HIM SELF HAS STATED THAT THE AMOUNTS WERE WITHDRAWN FROM THE FIRM THEN HOW IT CAN BE SAID THAT THE AMOUNTS WERE TAKEN FROM THE FAMILY ME MBERS. HE PLEADED FOR RESTORING THE ORDER OF THE A.O. PER CO NTRA, THE LD. COUNSEL ARGUES THAT THE ASSESSEE IS A PARTNER IN M/S. TOP G EAR AND AMOUNTS WERE WITHDRAWN ON THE PERSONAL ACCOUNT. SO FAR AS OTHER PERSONS LIKE SHRI SAWINDER SINGH KEER ITA 5182/M/2010 3 SARBAN SINGH KEER, JASMINDER KEER, MANIT KAUR ARE C ONCERNED, THESE ARE CLOSE RELATIVES OF THE ASSESSEE. HE FURTHER ARG UES THAT THE ASSESSEE WAS ISSUED THE SHOW CAUSE NOTICE ONLY IN RESPECT OF THE TRANSACTIONS AMOUNTING TO ` 88,000/- IN WHICH NO DETAILS OF THE ALLEGED DEPOSI TS OR LOANS WERE GIVEN. HE FURTHER ARGUES THAT NOTHING IS THERE ON RECORD TO SHOW THAT THE AMOUNTS TAKEN BY THE ASSESSEE WERE IN THE NATURE OF THE LOANS OR DEPOSITS. HE FURTHER PLEADED FOR CONF IRMING THE ORDER OF THE LD. CIT (A) OR ALTERNATIVELY, AT THE MOST PLEAD ED FOR RESTRICTING THE PENALTY OF ` 88,000/-. 4. WE FIND THAT IN THE PENALTY ORDER THE A.O. HAS S HOWN TOTAL FORTY TRANSACTIONS ON THE NAME OF M/S. TOP GEARS IN WHICH THE ASSESSEE IS A PARTNER. WHEN THE SHOW CAUSE NOTICE WAS ISSUED T O THE ASSESSEE THE PRESUMPTION IS THAT THE LD. ADDL CIT MUST HAVE EXAMINED THE ASSESSMENT RECORD AND ONLY AFTER EXAMINATION OF THE ASSESSMENT RECORD WOULD HAVE COME TO THE CONCLUSION THAT THERE WAS A VIOLATION OF SEC. 269SS BY THE ASSESSEE TO THE EXTENT OF ` 88,000/- ONLY. NOTHING IS THERE ON RECORD TO SHOW THAT SUBSEQUENTLY ANY FR ESH OR REVISED NOTICE WAS ISSUED SHOWING TOTAL AMOUNT OF ALLEGED V IOLATION TO ` 3,60,963/-. IT IS TRUE THAT IN THE SHOW CAUSE NOTI CE, THE AMOUNT OF THE LOAN TRANSACTIONS IS SHOWN AT ` 88,000/-, HENCE, AT THE MOST, THE PENALTY SHOULD HAVE BEEN CONFINED TO THE SAID AMOUN T. 5. NOW, LET US DEAL WITH THE ARGUMENTS OF THE PARTIES. SO FAR AS CONTENTION OF THE LD. D.R. THAT MEANS REA IS NOT REQUIRED, IN OUR OPINION, THERE IS NO QUARREL ON THIS PROPOSITION. WE FIND THAT THE EXPLANATION OF THE ASSESSEE IS ALSO GENERAL IN NATU RE WHICH IS REPRODUCED IN THE PENALTY ORDER. SO FAR AS THE AMO UNT TAKEN FROM M/S. TOP GEAR ARE CONCERNED, IN WHICH THE ASSESSEE IS A PARTNER, NOTHING IS BROUGHT ON RECORD TO SHOW THAT THE SAID AMOUNTS WERE IN THE NATURE OF THE LOANS OR DEPOSITS. IN RESPECT O F OTHER PARTIES I.E. I) SARBAN SINGH KEER, II) JASMINDER KEER, AND III) MANIT KAUR, ARE CONCERN, ASSESSEE HAS ALSO NOT FILED ANY EVIDENCE TO SHOW THE NATURE SHRI SAWINDER SINGH KEER ITA 5182/M/2010 4 OF THE SAID AMOUNTS. WE ARE UNABLE TO ARGUMENT OF LD. CONSEL THAT THERE WAS A REASONABLE CAUSE WITHIN MEANING OF SEC 273B FOR ACCEPTING THE DEPOSITS/LOANS FROM THE ABOVE PARTIES . AT THE SAME TIME, AS THE ADDL. CIT ISSUED THE SHOW CAUSE NOTICE TO THE EXTENT OF ` 88,000/-AND HENCE, IN OUR OPINION THE PENALTY IS TO BE RESTRICTED TO THAT AMOUNT ONLY I.E. ` 88,000/- . WE, THEREFORE, REVERSE THE ORDER OF THE LD. CIT (A) AND PARTLY RESTORE THE ORDER OF THE LD. ADDL CIT, MUMBAI AND SUSTAIN THE PENALTY TO THE EXTENT OF ` 88,000/-. 6. IN THE RESULT, REVENUES APPEAL IS PARTLY ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 1 9TH OCTOBER 2011. SD/- SD/- ( PRAMOD KUMAR ) ACCOUNTANT MEMBER ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI, DATED : 19TH OCTOBER 2011 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) -28, MUMBAI. 4) THE CIT-18, MUMBAI. 5) THE D.R. H BENCH, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN SHRI SAWINDER SINGH KEER ITA 5182/M/2010 5 SR.N. EPISODE OF AN ORDER DATE INITIALS CONCERNED 1 DRAFT DICTATED ON 29.09.2011 SR.PS 2 DRAFT PLACED BEFORE AUTHOR 03.10.2011 SR.PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER