Nemai Ghosh, Burdwan V. Add.CIT.,Range-2, Durgapur, Durgapur

ITA 539/KOL/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7936 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2012
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2007-2008
• Appeal Filed On: 09-04-2012
• Court: TRIBUNAL
• Department Lawyers: K K DAS
• Assessee Lawyers: N O N E
• Keywords: Non-deduction of tax
• Section: 143(3); 246

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: KOL KATA () BEFORE , /AND ! ! ! ! , '# ) [BEFORE SHRI MAHAVIR SINGH, JM & SHRI SANJAY ARORA, AM] $ $ $ $ / I.T.A NO. 538/KOL/2012 %& '( %& '( %& '( %& '(/ // / ASSESSMENT YEAR : 2007-08 & $ $ $ $ / I.T.A NO. 539/KOL/2012 %& '( %& '( %& '( %& '(/ // / ASSESSMENT YEAR : 2007-08 NEMAI GHOSH VS. ADDL. COMMISSIONER OF INCOME- TAX, (PAN: AFLPG9858A) RANGE-2, DURGAPUR (*+ /APPELLANT ) (,-*+/ RESPONDENT ) FOR THE APPELLANT: N O N E FOR THE RESPONDENT: SHRI K. K. DAS DATE OF HEARING: 07.08.2012 DATE OF PRONOUNCEMENT: 07.08.2012 '. / ORDER IMMEDIATELY UPON CONCLUSION OF HEARING OF THIS APPE AL ON 7 TH AUGUST, 2012, THE BENCH PASSED THE FOLLOWING ORDER: 7 TH AUGUST, 2012 BOTH APPEALS OF ASSESSEE ARE ALLOWED. ORDER PRONOU NCED IN OPEN COURT. DETAILED ORDER WILL FOLLOW. PER BENCH: BOTH THESE APPEALS BY ASSESSEE ARE ARISING OUT OF SEPARATE ORDERS OF CIT(A)-DURGAPUR IN APPEAL NOS. 36 & 35/CIT(A)/DGP/2010-11 BOTH DATE D 19.01.2012. ASSESSMENTS WERE FRAMED BY ACIT, CIRCLE-2, DURGAPUR U/S. 143(3) OF T HE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR ASSESSMENT YEAR 2007- 08 VIDE HIS ORDER DATED 22.10.2009. PENALTIES IN DISPUTE WERE LEVIED BY ADDL. CIT, RANG E-2, DURGAPUR U/S. 271D AND 271E OF THE ACT VIDE HIS SEPARATE ORDERS BOTH DATED 30.08.2010. 2. THE ONLY COMMON ISSUE IN THIS TWO APPEALS OF AS SESSEE IS AS REGARDS TO THE ORDER OF CIT(A) UPHOLDING THE LEVY OF PENALTIES U/S. 271D AN D 271E OF THE ACT FOR AN AMOUNT OFRS. 2 LACS IN EACH. FOR THIS, ASSESSEE HAS RAISED FOLLOW ING GROUNDS OF APPEAL: GROUND FOR PENALTY U/S. 271D OF THE ACT: 2 ITA 538 & 539K/2012 NEMAI GHOSH A.Y. 07-08 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES L D. CIT(A) IS JUSTIFIED BY DISMISSING THE APPEAL PREFERRED BY THE ASSESSEE AND UPHOLDING THE ORDER OF ADDL. CIT, RANGE-2, DURGAPUR IN RESPECT OF PENALTY U/S. 271D OF THE I. T.ACT. GROUND FOR PENALTY U/S. 271E OF THE ACT: 1. WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES L D. CIT(A) IS JUSTIFIED BY DISMISSING THE APPEAL PREFERRED BY THE ASSESSEE AND UPHOLDING THE ORDER OF ADDL. CIT, RANGE-2, DURGAPUR IN RESPECT OF PENALTY U/S. 271E OF THE I. T.ACT. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE DEPOSIT AND REPAYMENT IN THE CASE OF LEVY OF PENALTYU/S. 271D AND 271E OF THE ACT IN EACH OF THE DEPOSIT AND REPAYMENT ISJUST RS. 20,000/-. IT MEANS THAT THE ASSESSEE HAS ACCEPTED CASH LOAN OR DEPOSIT FROM 10 PERSONS AMOUN TING TORS.20,000/- EACH AND REPAID ALSO. THE AO HAS LEVIED PENALTY FOR RECEIPT OF DEPOSIT IN CASH ATRS.20,000/- AND SUBSEQUENTLY, LEVIED THE PENALTY FOR REPAYMENT U/S. 271D AND 271E OF THE ACT RESPECTIVELY. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT(A), WHO CONFIRMED THE A CTION OF AO. AGGRIEVED, NOW ASSESEE IS IN APPEALS BEFORE US. 4. WE FIND THAT THE ADMITTED FACTS IN THE CASE OF A CCEPTING DEPOSIT AND REPAYMENT, I.E. IN BOTH THE EVENTS, ASSESSEE HAS ACCEPTED THE AMOUNT O F RS.20,000/- IN EACH OF THE CASE. THE ASSESSEE HAS ACCEPTED DEPOSIT OF RS.2 LACS FROM 10 PERSONS AND ALSO REPAID THE SAME AMOUNT. NOW QUESTION ARISES WHETHER ON THE AMOUNT OF RS.20, 000/- I.E. ACCEPTANCE OF LOAN OR DEPOSIT AND REPAYMENT THEREOF WILL ATTRACT PENALTY U/S. 271 D AND 271E OF THE ACT. THIS ISSUE HAS BEEN CLARIFIED BY THE CBDT VIDE CIRCULAR NO. 572 DATED 0 3.08.1990 WHEREIN IT HAS BEEN EXPLAINED AS UNDER: 43. SECTIONS 271C, 271D AND 271E, WHICH WERE INSER TED IN THE JNCOME-TAX ACT, WITH EFFECT FROM 1-4-1989 BY THE DIRECT TAX LAWS (AMENDM ENT) ACT, 1987, PROVIDE FOR THE IEVY OF PENALTIES FOR CERTAIN DEFAULTS. PENALTY UND ER SECTION 271C IS LEVIED FOR FAILURE TO DEDUCT TAX AT SOURCE. PENALTY UNDER SECTION 271D M AY BE LEVIED FOR FAILURE TO COMPLY WITH THE PROVISIONS OF SECTION 269SS, I.E., FOR TAK ING OR ACCEPTING ANY LOAN OR DEPOSIT IN EXCESS OF RS. 20,000 OTHERWISE THAN BY AN ACCOUNT P AYEE CHEQUE OR BANK DRAFT. PENALTY UNDER SECTION 271E MAY BE LEVIED FOR FAILURE TO COM PLY WITH THE PROVISIONS OF SECTION 269T RELATING TO REPAYMENT BY A COMPANY, INCLDING A BANKING COMPANY, A CO-OPERATIVE SOCIETY OR A FIRM, OF DEPOSITS, INCLUDING INTEREST, EXCEEDING RS. 10,000 IN THE AGGREGATE OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR BANK D RAFT. 43.1 THE INCOME-TAX AUTHORITY, WHICH CAN LEVY THESE PENALTIES, IS NOT MENTIONED IN ANY OF THESE SECTIONS. IN ORDER TO ENSURE THAT THESE PENAL TIES ARE IMPOSED BY SENIOR OFFICERS ONLY, A NEW SUB-SECTION (2) HAS BEEN INSERTED IN EA CH OF THE SAID SECTIONS 271C, 271D AND 271E TO PROVIDE THAT PENALTY UNDER EACH OF THES E SECTIONS SHALL BE IMPOSED BY THE DEPUTY COMMISSIONER. 3 ITA 538 & 539K/2012 NEMAI GHOSH A.Y. 07-08 43.2 A CONSEQUENTIAL AMENDMENT HAS BEEN MADE IN SE CTION 246 OF THE INCOME-TAX ACT RELATING TO FILING OF APPEALS BEFORE THE DEPUTY COM MISSIONER (APPEALS) OR COMMISSIONER (APPEALS), SO THAT APPEALS AGAINST ORD ERS MPOSING PENALTIES UNDER THE SAID SECTIONS 271C, 271D AND 271E SHALL NOW BE FILE D BEFORE THE COMMISSIONER (APPEALS) ONLY. 43.3 THESE AMENDMENTS WILL TAKE EFFECT FROM THE LST APRIL, 1990. [SECTIONS 41, 44, 45 AND 46 OF THE FINANCE ACT, 199 0] [SOURCE: EXCERPTS FROM DEPARTMENTAL CIRCULAR NO. 5 72, DATED 3RD AUGUST, 1990.1 AS PER CIRCULAR NO. 572 DATED 03.08.1990, THE PROVI SIONS OF SECTIONS 269SS AND 269T WILL ATTRACT ONLY IN CASES WHERE THE AMOUNT EXCEEDS RS.2 0,000/-. SUCH INSTRUCTIONS OF THE BOARD ARE BINDING ON THE FIELD OFFICERS AND, THEREFORE, THE P ENALTY LEVIED U/S. 271D AND 271E OF THE ACT IN THE PRESENT CASE IS BEYOND THE SCOPE OF LEVY AS THE CENTRAL BOARD OF DIRECT TAXES HAS CLARIFIED THE POSITION. IN SUCH SITUATION, THE PENALTY LEVIE D BY AO AND CONFIRMED BY CIT(A) IS DELETED. BOTH THE APPEALS OF ASSESSEE ARE ALLOWED. 5. IN THE RESULT, BOTH THE APPEALS OF ASSESSEE ARE ALLOWED. 6. ORDER PRONOUNCED IN OPEN COURT. SD/- SD/- ! ! ! ! , '# , (SANJAY ARORA) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER ( /# /# /# /#) )) ) DATED: 7TH AUGUST, 2012 01 %2 3 JD.(SR.P.S.) '. 4 ,5 6'5'7- COPY OF THE ORDER FORWARDED TO: 1 . *+ / APPELLANT SHRI NEMAI GHOSH, PROP. ABIR UDYOG, VIL L + P.O. PANDAVESWAR, DIST. BURDWAN-713285 2 ,-*+ / RESPONDENT ADDL.CIT, RANGE-2 DURGAPUR 3 . .% ( )/ THE CIT(A), DURGAPUR 4. .% / CIT, 5 . >? ,% / DR, KOLKATA BENCHES, KOLKATA -5 ,/ TRUE COPY, '.%@/ BY ORDER, /ASSTT. REGISTRAR .