Sonia Verma, Ludhiana V. ITO, Ward -1, Ludhiana

ITA 565/CHANDI/2022

AI Insights

The case involves Sonia Verma, who appealed against the penalty imposed by the Income Tax Department for accepting cash payments in violation of Section 269SS of the Income Tax Act, 1961. The penalty was initially confirmed by the CIT (Appeals), NFAC, Delhi. The assessee argued that the cash transactions were necessary due to her urgent financial need for her daughter's marriage and the buyer's inability to pay the full amount at once. The Tribunal considered the circumstances, including the economic hardship and the procedural delays in the property sale, and concluded that there was a reasonable cause for the violation, thus quashing the penalty.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 127542 (ITAT-CHANDIGARH)
• Duration Of Justice: 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 31-01-2023
• Assessment Year: 2017-2018
• Appeal Filed On: 25-07-2022
• Other Referred Cases: PCIT Vs M/s Tehal Singh Khara & Sons, CIT Vs Saini Medical Store, CIT Vs Sunil Kumar Goel
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Bonafide belief; Reasonable cause
• Section: 27; 37; 271D; 64; 13; 153

Judgement Text

आयकर अपील य अ धकरण,च डीगढ़ यायपीठ “एकल सद यीय’, च डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH ‘SMC’ CHANDIGARH ीमती दवा संह, या#यक सद य BEFORE: SMT. DIVA SINGH, JM आयकर अपील सं./ ITA No. 565/CHD/2022 नधा रण वष / Assessment Year : 2017-18 Sonia Verma,, House No.3469, M/s Verma Boutique, Mohalla-Lahorian, Jagraon, Ludhiana. बनाम VS The ITO, Ward 1, Ludhiana. थायी लेखा सं./PAN No: FRLPS9739B अपीलाथ /Appellant यथ /Respondent नधा रती क! ओर से/Assessee by : Shri Sudhir Sehgal, Advocate राज व क! ओर से/ Revenue by : Shri Akashdeep, JCIT, Sr.DR स ु नवाई क! तार&ख/Date of Hearing : 01.02.2023 उदघोषणा क! तार&ख/ Date of Pronouncement : 02.03.2023 आदेश/ORDER Th e p r e s e n t a p p e a l p e r t a i n i n g t o 2 0 1 7 - 1 8 a s s e s s m e n t y e a r h a s b e e n f i l e d b y t h e a s s e s s e e a s s a i l i n g t h e c o r r e ct n e s s o f t h e o r d e r d a t e d 3 1 . 0 5 . 2 0 2 2 o f th e N F A C , D e l h i ( i . e . N a ti o n a l F a c e l e s s A p p e a l C e n t r e ) a c t i n g a s F i r s t A p p e l l a t e Au t h o r i t y o n t h e f o l l o w i n g g r o u n d s : 1 . That the Ld. CIT (Appeals), NFAC, Delhi in law as well as on facts has erred in confirming penalty at Rs. 9,10,000/- U/s 271-D of the Income Tax Act, 1961 as imposed by the Ld. Joint Commissioner of Income Tax, Moga Range, Moga. ITA 565/CHD/2022 A.Y. 2017-18 Page 2 of 20 2 . That the Ld. CIT (Appeals), NFAC, Delhi in law as well as on facts has erred in not allowing the statutorily relief as specifically provided U/s 273-B of the Income Tax Act, 1961 to the appellant. 3 . That the Appellant craves leave to add, alter, amend, modify, or withdraw the grounds of appeal before the appeal is finally heard or disposed off. 2 . Th e r e l e v a n t f a c t s o f t h e c a s e a r e t h a t t h e a s s es s e e r e s i d e n t o f H o u s e N o . 3 4 6 9 , M o h a l l a L a h o r i a n , J a g r a o n D i s t t . L u d h i a n a f o r t h e c o n s i d e r a t i o n o f R s . 9 , 1 0 , 0 00 / - s o l d h e r f l at N o . 3 6 1 , G . F. B l k - G , P K T- 7 , S e c t o r 1 6 , R o h i n i , D e l h i t o S h r i P a w an K u m a r , C - 2 / 9 8 , B l o c k C , P o c k e t - 2 , S e c t o r 1 6 , R o h i n i , D e l h i in t h e y e a r u n d e r c o n s i d e r a t i o n . Th e s a l e p r o c e e d s w e r e a c c e p t ed i n c a s h . O n a c c o u n t o f t h i s f a c t , p e n a l t y u / s 2 7 1 D o f t h e A c t wa s l e v i e d u p o n t h e a s s e s s e e . 2 . 1 I n r e s p o n s e t o th e n o t i c e i s s u e d u / s 2 7 4 r e a d w it h S e c t i o n 2 7 1 D , t h e a s s e s s e e a s p e r r e c o r d f i l e d w r i t t e n s u b mi s s i o n s . Th e s e a r e e x t r a c t e d i n p a r a 3 o f t h e P e n a l t y o r d e r a n d a re r e p r o d u c e d h e r e i n a f t e r f o r c o m p l e t e n e s s : “3. The counsel of the assessee submitted that the assessee owns very small Janta flat and for the purpose of arranging funds for the marriage of her daughter, the assessee sold her impugned Janta flat for a total consideration of Rs.9,10,000/-. The registry for the sale of the aforesaid impugned Janta flat was duly executed on 22.11.2016 with Sub Registrar VI, New Delhi vide registration No. 11070. The sale consideration was received in cash on different dates i.e. Rs.150,000/- on 17.02,2016, Rs.160,000/- on 12.04.2016, Rs.240,000/- on 16.06.2016, F&170,00Q/- on 20.07.2016 and Rs.190,000/- on 10.10.2016. The full consideration was received upto 10.10.2016 and e-stamp for the registry of the impugned Janta flat was purchased on 10.10.2016 and due to administrative and procedural delays the registration was executed on 22.11.2016. It was also submitted that the sole reason for the sale of aforesaid impugned Janta flat was that the assessee was in-dire need ITA 565/CHD/2022 A.Y. 2017-18 Page 3 of 20 of funds for the purpose of materializing the marriage of her elder daughter as after her engagement on 07.01.2013, her marriage was repeatedly postponed due to shortage of funds. However, during that days there was acute slump in the immovable property market and the assessee was facing difficulty to locate its buyer. When the deal for the sale of impugned property was materialized, the buyer of the property told the assessee that he can not pay the whole sale consideration in lump sum in one day and will pay the same in parts. Thus the payments were received by the assessee in parts. The marriage of her daughter was fixed on 08.12.2016 at O.D. Clum, Kn Katsu Marg, Sector 13, Rohini (New Delhi). The assessee also submitted that due to incapability of her husband due to facing a major accident the assessee alone was having complete burden and responsibility to manage for the whole affairs of the marriage of her daughter.” (emphasis supplied) 2 . 2 Th e e x p l a n a t i o n s u p p o r t e d b y t h e d e c i s i o n s r e fe r r e d t o i n t h e o r d e r w e r e n o t a c c e p t e d . Th e A O i m p o s e d p e na l t y h ol d i n g a s u n d e r : “5. The submission of the assessee has been carefully gone through/considered. However I do not incline to agree with the same. The assessee, in this case, has failed to justify the reasonable cause for failure on five separate occasions during the year. She had reasonable time to accept the sale consideration by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account as she accepted the full consideration during 17.02.2016 to 10.10.2016 in 05 parts i.e. in a very long span of time (approx 08 months). She was having sufficient time to manage all the Marriage affairs of her daughter as stated in her submission. Further, the facts of the case is distinguishable from the cases relied upon by the assessee in her submission. Accordingly, after due consideration of all facts and circumstances of the case. I am satisfied that the assessee has contravened the proviso of Sec. 269SS of the Income-tax Act, 1961 and-it is a fit case for imposing penalty u/s 271D of the Income-tax Act, 1961. Accordingly., the penalty of Rs.9,10,000/- is hereby imposed u/s 271D of the Income- tax Act, 1961. The assessee is directed to pay the penalty of Rs.9,10,000/- as per notice of demand.” ITA 565/CHD/2022 A.Y. 2017-18 Page 4 of 20 3 . Th e i s s u e c a r r i e d i n a p p e a l be f o r e t h e F i r s t A p pe l l a t e A u t h o r i t y c h a l l e n g i n g t h e l e v y o f p e n a l t y w a s a l so u n s u c c e s s f u l. F o r t h e p u r p o s e s o f c o m p l e t e n e s s , i t i s n e c e s s a r y to b r i n g o u t t h e c o n t e n t i o n s o f t h e a s s e s s e e a s s u m m e d u p b y t h e F i rs t A p p e l l a t e A u t h o r i t y r e f e r r i n g t o f a c t s a s a v a i l a b l e b e f o r e t he A O : c ) The contentions of Appellant before the AO are as under:- i. Appellant sold the Janta Flat for arranging funds for marriage of her daughter. Registry for sale was executed on 22.11.2016 with Sub Registrar VI, Delhi. ii. Sale consideration was received in cash on 5 different dates upto 10.10.2016 and e-stamp was purchased on 10.10.2016. iii. Marriage of Appellants daughter was repeatedly postponed due to shortage of funds although the engagement happened on 07.01.2013. Appellant was in dire needs of funds to materialize her daughter marriage. iv. Buyer of flat told Appellant that he cannot pay in lump sum on single date and he paid it in parts. Marriage was fixed on 08.12.2016 in Rohini, Delhi. v. Husband of Appellant was in capacitated due to major accident so entire burden, of marriage was on Appellant. vi. Appellant relied on various case laws as outlined in para 4 of the order. (emphasis supplied) 3 . 1 Th e w r i t t e n s u b m i s s i o n s o f t h e a s s e s s e e a d v a n c ed b e f o r e t h e F i r s t A p p e l l a t e Au t h o r i t y a r e r e p ro d u c e d a t p a g e s 3 t o 1 7 o f t h e i m p u g n e d o r d e r . Th e s e c u l l e d o u t f r o m t h e w r i tt e n s u b m i s s i o n s f i l e d a r e s e t o u t i n p a g e 1 9 a n d 2 0 o f t h e i m p u g n e d o r d e r . Th e s e a r e r e p r o d u c e d h e r e i n a f t e r f o r c o m p l e t e n e s s : ITA 565/CHD/2022 A.Y. 2017-18 Page 5 of 20 a) The contentions of Appellant in brief are as under:- i. These funds were required for marriage of Appellants daughter. Buyer was not giving the payment in lump sum on one date. Appellant had to travel 400 kms from Jagraon to Delhi to receive the said payments in cash on 5 different dates. ii. Appellant was not sure whether the cheque issued by buyer would be passed or not, thus, she accepted the sale considerable in cash. iii. Appellant had a savings bank account with SBI, Jagraon. Appellant's son-in-law was in Delhi and venue of marriage was in Delhi. Appellant did most of shopping for wedding in Delhi. Appellant took all payments in cash in Delhi and utilized most of these funds in Delhi on shopping for wedding. Copies of two purchase bills were filed. iv. Had the Appellant taken the payment by cheque, it would have caused her genuine hardship as branches- other than parent branch do not allow cash withdrawal in excess of Rs.50,000/- per day. Even high value withdrawals are not permissible in ATM also. It was not feasible for Appellant to stay in Delhi for a number of days for purpose of making withdrawals from her bank account in Delhi. It was not feasible for Appellant to come to Jagraon and withdraw cash and go back to Delhi to do the shopping. v. Appellant had no knowledge that she cannot take payments in cash against sale of property. vi. No Capital Gain was attracted on sale of said property. vii. It is bonafide and genuine transaction and is no way related to evasion of tax. Section 269SS is not applicable on bonafide genuine transaction. viii. Appellant had proved the reasonable cause for failure to comply with provisions of section.269SS. Thus, statutory relief u/s 273 be allowed to Appellant. ix. Appellant has relied on number of judgments in support of her contentions. (emphasis supplied) 3 . 2 Th e e x p l a n a t i o n h a s b e e n d i s c a r d e d a g a i n r e s u l ti n g i n c o n f i r m i n g t h e p e n a l t y o r d e r . 4 . A g g r i e v e d t h e a s s e s s e e i s i n a p p e a l b e f o r e t h e ITA T. ITA 565/CHD/2022 A.Y. 2017-18 Page 6 of 20 5 . Th e l d . A R i n v i t i n g a t t e n t i o n t o t h e i m p u g n e d o rd e r r e l i e d h e a v i l y u p o n t h e s u b m i s s i o n s a s f o u n d a d v a n c e d i n pa r a 3 o f t he p e n a l t y o r d e r a n d a s s a i l e d t h e f i n d i n g s i n p a r a 5 su b m i t t i n g t h a t t h e a s s e s s e e ’ s h u s b a n d w a s do i n g s m a l l j o b w o r k w i th a g o l d s m i t h i n J a g r a o n a n d a d m i t t e d l y h a d n o a s s e s s a bl e i n c o m e a n d c o n s e q u e n t l y w a s a n o n - f i l er o f r e t u r n . I t ha s b e e n a r g u e d t h a t d u e t o h e r h u s b a n d ’ s i n c a p a c i t y o n a c c o u n t o f s o m e a c c i d e n t , t h e a ss e s s e e h a d t o do t h e r u n n i n g fr o m Ja g r a o n t o D e l h i f r e q u e n t l y f o r t h e s a l e o f t h e a s s e t a n d u t i li z e d t h e p r o c e e d i n g f o r m a k i n g p u r c h a s e s f o r m a r r i a g e c er e m on i e s o f h e r d a u g h t e r w h i c h w a s r e p e a t e d l y p o s t p o n e d o v e r t h e y ea r s f o r w a n t o f f u n d s . D u e t o a s l u m p i n t h e m a r k e t , t h e s a l e of t h e s a i d f l at c o u l d b e f i n a l i z e d w i t h g r e a t d i f f i c u l t y . I t w a s h is s u b m i s s i o n t h a t t h e a s s e s s e e h a s l e d e v i d e n c e s t o s h o w t h a t m a r r i a ge o f t h e a s s e s s e e ' s d a u g h t e r w a s f i n a l i ze d i n t h e y e a r 2 0 1 3 a n d b e i n g r e p e a t e d l y d e l a y e d o n a c c o u n t o f l a c k o f f u n d s u l t im a t e l y t o o k p l a c e i n 2 0 1 6 . Th e p r o c e e d s w e r e r e c e i v e d i n D e l h i a s t h e p u r c h a s e r o f t h e f l a t w h o i s i d e n t i f i e d a n d a l r e a d y n a m e d a l s o b e i n g a m a n o f s m a l l m e a n s e x p r e s s e d h i s i n a b i l i t y t o m a k e a l u m p s u m p a y m e n t a n d c o u l d m a k e s m a l l e r p a y m e n t s a s p e r r e c o r d o n f i v e d if f e r e n t d a t e s . I t w a s s u b m i t t e d th a t t h e s e f a c t s a r e r e c o r d e d i n t h e S a l e D e e d i t s e l f w h i c h i s a R e gi s t e r e d ITA 565/CHD/2022 A.Y. 2017-18 Page 7 of 20 d o c u m e n t . R e l y i n g o n t h e s e f a c t s o n r e c o r d , i t w a s s u b m i t t e d t h a t r e a s o n a b l e c a u s e f o r f a i l u r e , i f a n y h a s b e e n a d v a nc e d b y t h e a s s e s s e e r e p e a t e d l y b e f o r e t h e t a x a u t h o r i t i e s . 5 . 1 I n v i t i n g a t t e n t i on t o t h e i m p u g n e d o r d e r , s u b m is s i o n s a s a d v a n c e d b e f o r e t h e C I T( A ) w e r e a g a i n r e - i t e r a t e d as e x t r a c t e d i n t h e i m p u g n e d o r d e r . R e l y i n g o n t h e s a m e , i t w a s s ub m i t t e d t h a t n o t h i n g n e w h a s b e e n s a i d t h e r e i n . Th e e x p l a n a t i o n b e f o r e t h e F i r s t A p p e l l a t e A u t h o r i t y i s a m o r e d e t a i l e d e la b o ra t i o n o f t h e a r g u m e n t s o n t h e s a m e s e t o f f a c t s . S p e c i f i c a t t e nt i o n w a s i n v i t e d t o p a g e 1 2 a n d 1 3 o f t h e i m p u g n e d o r d e r w h er e i n t h e a s s e s s e e h a s r e l i e d u p o n t h e f o l l o w i n g d e c i s i o n s o f t h e j u r i s d i c t i o n a l H i g h C o u r t : 1. PCIT Vs M/s Tehal Singh Khara & Sons, Distt. Ferozepur, ITA No. 248 of 2017 (O&M) decision dated 1.07.2017 (2017) 64 I.T. REPS 420 (P&H). 2. CIT Vs Saini Medical Store (2005) 276 ITR 79 (P&H) 3. CIT Vs Sunil Kumar Goel (2009) 183 Taxman 53 (P&H). 5 . 2 A t t e n t i o n w a s al s o i n v i t e d t o th e f a c t a s n o t ice d i n t h e i m p u g n e d o r d e r i t s e l f n a m e l y th a t t h e a s s e s s ee d i d g o i n f o r s e t t i n g t h e i s s u e b e f o r e ' V i v a d S e V i s h w a s S c h e m e ' , h o w e v e r , c o u l d n o t m a k e t h e r e q u i s i t e p a y m e n t w h i c h f a c t h a d b e e n n o t i c e d b y t h e C I T( A ) a t p a g e 1 8 . ITA 565/CHD/2022 A.Y. 2017-18 Page 8 of 20 5 . 3 I n t h e s a i d b a c k d r o p , t h e f i n d i n g a r r i v e d a t b y t h e C I T( A ) a f f i r m i n g t h e p e n a l t y o r d e r a g a i n f o r t h e s a m e r e a so n s , i t w a s s u b m i t t e d , i s c on t r a r y t o l a w a nd f a c t s . I t w a s h is s u b m i s s i o n t h a t i t i s n o t i n d i s p u t e t h a t t h e a s s e s s e e h a s c o ns i s t e n t l y g i v e n a n e x p l a n a t i o n a n d i n t e r m s o f t h e j u d i c i a l p r e c e d en t a s s e t t l e d b y t h e j u r i s d i c t i o n a l H i g h C o u r t i n ( S l N o . 4 ) CIT vs. M/s. Harpal Singh Jaswant Singh in ITR No. 14 of 1995 dated 13.09.2006 (P&H); (Sl.No. 5) CIT vs. Speedways Rubber (P) Ltd. reported in [2010] 326 ITR 31 (P&H.); (Sl. No. 6) PC1T vs. M/s. Tehal Singh Khara & Sons, Village Changli Jadid, Ferozepur in ITA No. 248 of 2017 (O & M) and (Sl.No. 9) Judgment of Hon'ble High Court of Allahabad in the case of CIT-II, Agra Vs Smt. Dimpal Yadav ITA No. 174 of 2015 dated 21.08.2015 i t w a s h i s p r a y e r t h a t t h e p e n a l t y i m p o s e d m a y b e q u a s h e d. Th e s e d e c i s i o n s w e r e s p e c i f i ca l l y h i g h l i g h t e d w h i l e s i m u l t a n e o u s l y r e l i a n c e wa s a l s o p l a c e d u p o n t h e o t h er d e c i s i o n s a l s o f i l e d i n t h e P a p e r B o o k , n a m e l y Hindustan Steel Ltd. vs. State of Orissa [1972] 83 ITR 26 (SC); Motilal Lal Padampat Sugar Mills Co. Ltd. vs. State of Uttar Pradesh & Ors. reported in [1979] 118 ITR 326; Faridkot Bathinda Kshetriya Gramin Bank vs. JCIT : reported in [2003] 125 Taxman 268 (ASR.) (MAG.); CIT vs. Saini Medical Store reported in (2005) 276 ITR 79 (P&H); CIT vs. Sunil Kumar Goel reported in [2009] 183 Taxman 53 (P&H); CIT-1 vs. Smt. M Yesodha reported in [2013] 31 taxman.com 153 (Madras); CIT vs. Maheshwari Nirman Udyog reported in [2008] 170 Taxman 502 (Rajasthan); ITA 565/CHD/2022 A.Y. 2017-18 Page 9 of 20 CIT vs. Bhagwati Prasad Bajoria (HUF) reported in [2003] 133 Taxman 426 (GAU.); Mohanjeet Singh vs. CIT, Khanna reported in [2016] 70 taxmann.com 335 (Chandigarh-Trib.); Mohan Lal Thakral vs. CIT reported in [2018] 93 taxman.com 156 (Punjab & Haryana). O n f a c t s a t t en t i o n w a s a l s o i n v i t e d t o t h e P a p e r B o o k f i l e d w h e r e i n a t p a g e s 1 t o 6 i s t h e c o p y o f t h e S a l e D e e d w h e r e i n t h e s p e c i f i c a m o u n t s a s p er t h e d e p o s i t s i n t h e b a n k o n t h e s p e c i f i c d a t e s a r e m e n t i o n e d a t p a g e 4 . P a g e 1 t o 5 o f t h e P a p er B o o k i s t h e t yp e d c o p y o f t h e S a le D e e d a n d p a g e s 7 t o 1 3 a r e s c a n n e d c o p i e s . Th e s a i d f l a t , it w a s s u b m i t t e d , h a d b e e n p u r c h a s e d o n 0 9 . 0 4 . 2 0 1 2 f o r a n a m o u n t of R s . 6 , 5 0 , 0 0 0 / - a n d f i n a l l y s o l d o n 2 2 . 1 1 . 2 0 1 6 f o r t he s t a t ed a m o u n t . Ty p e d c o p y o f t h i s , i t w as s u b m i t t e d , h a d a l s o b e e n f i l ed w h i c h i s a t p a g e s 1 4 t o 1 9 a n d t h e s c a n n e d c o p y i s a v a i l a b l e a t p a g e s 2 0 t o 2 6 . O v e r a n d a b o v e t h i s , i t w a s s u b m i tt e d t h a t t h e a s s e s s e e h a s f i l e d s o m e p u r c h a s e b i l l s f o r c l o t h a nd j e w e l l e r y o n s p e c i f i c d a t e s a s p e r l e t t e r d a t e d 1 0 . 0 7 . 2 0 1 9 b e f o re A O . Th i s c o p y i s a t p a g e 2 7 o f t h e P a p e r B o o k. I t w a s s u b m i tt e d t h a t i t h a s f u r t h e r b e e n s u p p o r t e d b y a n a f f i d a v i t o f t h e a s s e ss e e a f f i r m i n g t h e s e f a c t s . 5 . 4 Th e a f f i d a v i t o f t h e a s s e s s e e f i l e d b e f o r e t h e t a x a u t h o r i t i e s w a s a l s o h e a v i l y r e l i e d u p o n . F o r t h e s a k e o f c o mpl e t e n e s s , i t i s a l s o r e p r o d u c e d h e r e u n d e r : ITA 565/CHD/2022 A.Y. 2017-18 Page 10 of 20 AFFIDAVIT I Sonia Verma W/o Sh. Mahinderi Pal Verma aged about 44 years resident of 3469, Mohalla Lahoria, Jagraon Distt. Ludhiana do hereby declare on solemn affirmation as under : 1. That the engagement of my elder daughter i.e. Smt. Chanchal was done on 07.01.2013 with Sh. Rahul Verma S/.o Sh. Vijay Kumar Verma resident of Rohini, Delhi. 2. That the marriage of my daughter Smt, Chanchal was materialized on 08.12.2016 at D.D. Club, Kn Katsu Marg, Sector 13, Rohini (New Delhi). 3. That I have sold my Janta flat at Flat No.36, area measuring 18 sq. feets, Ground Floor, without roof rights, Block -G, Pocket -7, Sector-16, Rohini, Delhi to Sh. Pawan Kumar, C2/98, Block C, Pocket -2, Sector -16, Rohini, Delhi -110089 for a total consideration of Rs.9,10,000/- which was received in cash on different dates as mentioned in the registered sale deed. 4. That the reason for the sale of aforesaid flat was that I was in need of funds for the purpose of materializing the marriage of my elder daughter. 5. That the sale consideration of the aforesaid flat was utilized by me for incurring expenses in relation to the marriage of my daughter. 6. That since my daughter's in laws were residing at Delhi and the venue of the marriage was also at Delhi, as such I done most of the shopping / expenditure etc. in connection with her marriage at Delhi. As such I took all the payments in Delhi and had spent most of it at Delhi itself. Thus the actual utilization of most of the aforesaid funds were at Delhi. 7. That if I took the sale consideration thorugh banking channels then under these circumstances this will cause genuine hardship for me because I maintain the bank account at Jagraon District Ludhiana and the expenditure was be incurred at Delhi. 8. That 1 was having no knowledge that I cannot take the payments in cash against the sale consideration of property and sale consideration was received in cash under a bonafide belief that I can take sale consideration in cash. Sd/- Deponent Verification I do hereby declare that my above statement is true and correct to the best of my knowledge and belief and nothing has been concealed in it. Sd/- Place : Jagraon Deponent Dated : 10.07.2019 ITA 565/CHD/2022 A.Y. 2017-18 Page 11 of 20 5 . 5 C o p i e s o f t h e p u r c h a s e b i l l s o f j e w e l l e r y a n d cl o t h a t p a g e s 3 1 a n d 3 2 w e r e h i g h l i g h t e d . Ty p e d c o p y o f t h e t ra ns a c t i o n s w i t h t h e S t a t e B a n k of I n d i a a t J a g r a on a r e a t p a g e s 3 3 t o 3 4 . P a g e 3 5 a n d 3 6 i s t h e o r ig i n a l s t a t e m e n t . Th e a s s e s s e e ' s hu s b a n d , i t w a s s u b m i t t e d , i s h a n d i c a p p e d o n a c c o u n t o f s o m e a c c i d en t a n d m e d i c a l b i l l s e v i d e n c i n g t h e f a c t o f a d m i s s i o n o n 30 . 0 8 . 2 0 1 3 t o 0 9 . 0 9 . 2 0 1 3 h a v e b e e n f i l e d a t p ag e s 3 7 t o 4 2 . Th e f a c t t h a t t h e a s s e s s e e ' s d a u g h t e r g o t m a r r i e d o n a s p e c i f i c d at e w a s f i l e d b y w a y o f e v i d e n c e o f m a r r i a g e c a r d , c o p y a v a i l a b l e a t p a g e s 4 3 a n d 4 4 . W r i t t e n s u b m i s s i o n s f i l e d b e f o r e N F A C a r e a t pa g e s 4 6 t o 6 5 . 5 . 6 I n t h e s a i d b a c kg r o u n d , i t w a s h i s s u b m i s s i o n t h a t p e n a l t y i m p o s e d m a y b e q u a s h e d a s a s s e s s e e h a s p l e a d e d r e a so n a b l e c a u s e f o r l a p s e , i f a n y . A t t e n t i o n w a s i n v i t e d t o Se c t i o n 2 7 3 B as c o n s i d e r e d b y t h e C o u r t s . 6 . L d . S r . D R M r . A k a s h D e e p h e a v i l y r e l y i n g u p o n t he r e s p e c t i v e o r d e r s o f t h e t a x a u t h o r i t i e s s u b m i t t e d t h a t t h e f a c t t h a t t h e r e i s a vi o l a t i o n i s e v i d e n t o n r e c o r d a n d o n t h e f a c t s o f t h e c a s e , t w o t a x a u t h o r i t i e s h a v e f o u n d t h a t i t i s n o t a j u s t i f i a b le c a s e o f r e a s o n a b l e c a u s e . I t w a s a l s o h i s s u b m i s s i on t h a t a r g u m e n t s o f i g n o r a n c e a n d h a r d s h i p h a v e n o r e l e v a nc e . R e l y i n g u p o n t h e o r d e r s , i t w a s h i s s u b m i s s i o n t h a t t h e a s se s s e e v e r y w e l l c o u l d h a v e a c c e p t e d t h e p a y m e n t i n c h e q u e s a n d w i t hd r a w n t h e s e ITA 565/CHD/2022 A.Y. 2017-18 Page 12 of 20 a t h e r c o n v e n i e n c e f o r h e r d a u g h t e r ’ s m a r r i a g e e t c . A c c o r d i n g l y , i t w a s h i s p r a y e r t h a t t h e o r d e r m a y b e s u s t a i n e d . 7 . I h a v e h e a r d t h e s u b m i s s i o n s a n d p e r u s e d t h e ma te r i a l o n r e c o r d . A s p e r a d m i t t e d f a c t s no t i n d i s p u t e s a le p r o c e e d s o f a s p e c i f i c f l a t w e r e r e c e i v e d i n c a s h b y t h e a s s e s s e e o n f i v e d i f f e r e n t o c c a s i o n s ; t h e a s s e s s e e ' s d a u g h t e r ’ s m a r r i a g e f i n a li z e d i n J a n u a r y , 2 0 1 3 g o t f r e q u e n t l y p o s t p o n e d o n a c c o u n t of l a c k of f u n d s a n d u l t i m at e l y t o o k p l a c e i n D e c e m b e r 2 0 1 6 ; th e b u y e r w h o i s n a m e d , h i s i d e n t i t y a n d p l a c e o f r e s i d e n c e i s k no w n ; a s p e r c o n s i s t e n t a r g u m e n t s , h e h a s e x p r e s s e d h i s i n a b i l i ty t o m a k e f u l l p a y m e n t f o r t h e J a n t a f l a t b y w a y o f a o n e t i m e p a ym e n t ; t h e a s s e s s e e o n a c c ou n t o f m e d i c a l i nf i r m i t y o f h e r h usb a n d t r a v e l l e d t o D e l h i t o c o l le c t t h e s a l e p ro c e e d s o n d i f f e re n t d a t e s a n d s i m u l t a n e o u s l y m a d e p u r c h a s e s f o r t h e w e d d i n g o f t he d a u g h t e r , t h e s e a r e s o m e o f t h e r e l e v a n t c o n s i s t e n t e x p l a n a t io n o n r e c o r d . D o c u m e n t a r y e v i d e n c e i n s u p p o r t o f t h e s e s u b m i s s i o ns i s a v a i l a b l e . Th e s e f a c t s a r e a l s o s t a t e d o n a n A f f i d av i t . Th i s r e m a i n s u n r e b u t t e d o n r e c o r d . T h e a r g u m e n t s t h a t t he a s s e s s e e c o u l d h a v e a r r a n g e d h e r a f f a i r s d i f f e r e n t l y i s a n ar g u m e n t b a s e d o n i f s a n d b u t s o f t h e m y r i a d p o s s i b l e w a y s of a d d re s s i n g a s i t u a t i o n . Th e s e a r g u m e n t s t o r e b u t t h e e x p l a n a t i on i n t h e p r e s e n t f a c t s o f th e c a s e a r e n o t re l e v a n t t o d e c i de w h e t h e r t h e r e ITA 565/CHD/2022 A.Y. 2017-18 Page 13 of 20 w a s a r e a s o n a b l e c a u s e f o r f a i l u r e o n t h e p a r t o f th e a s s e s s e e . Th e f a c t t h a t t h e r e i s a f a i l u r e i s a l s o n o t i n d i sp u t e . Th e s u p p o r t i n g a r g u m e n t f o r t h e j u s t i f i c a t i o n i n a c c e p ti n g c a s h o n 5 d i f f e r e n t o c c a s i o n s c a n v a s s i n g t h a t t h e a s s e s s e e ’ s a c t i o n w a s p r u d e n t a s s h e c o u l d n o t r e l y u p o n t h e p u r c h a s e r t o m a k e p a y m e n t s b y c h e q u e s w h i c h m a y o r m a y n o t b e h o n o u r ed a n d a s a r g u e d b e f o r e t h e F i r s t A p p e l l a t e A u t h o r i t y t h a t g et t i n g t he a m o u n t d e p o s i t e d b y w a y o f R TG S / C h e q u e i n h e r J a g r ao n a c c o u n t a n d t h e n t r a v e l l i n g w i t h c a s h w i t h d r a w n a t J a g r a o n t o D e l h i t o m a k e p u r c h a s e s w a s c o n s i d e r e d t o b e u n s a f e / im p r a c t ic a l a n d a l t e r n a t i v e l y / s i m u l t a n e o u s l y i t i s s e e n t h a t a s p e r r e c o r d , i t i s a l s o p l e a d e d p o s s i b l y t h a t t h e r e w a s a l i m i t o f c ash w i t h d r a w a l s f r o m A TM s . Th e s e s u b m i s s i o n s o n r e c o r d e v e n i f c a n va s s e d b y h i n d s i g h t t o j u s t i f y t h a t t h e a s s e s s e e c h o s e t h e si m p l e s t a n d s u r e s t w a y o f a cc e p t i n g t h e s a l e p r o c e e d s i n D e l hi a n d u s e d t he s a m e f o r m a k i n g p u r c h a s e s i n D e l h i f o r t h e o n c o m i n g m a r r i a g e o f h e r d a u g h t e r a l s o i n D e l h i r e ma i n u n - r e b u t t e d . I n a d d i t i o n , i g n o r a n c e o f l aw h a s a l s o b e en p l e a d e d . A gr e e i n g wi t h t h e a r g u m e n t s o f t he l d . S r . D R t h a t i g n o r a n c e o f l aw is n o e x c u s e. H o w e v e r , i t i s ne c e s s a r y t o k e e p i n m i n d t h e p ro v i si o n s o f l a w i n v o k e d . Th e i s s u e i s n o t t o b e d e c i d e d o n t h e p l e a o f i g n o r a n c e o f l a w a n d i s t o b e c o n s i d e r e d u n d e r t h e u m b r e l l a p r o vi s i o n o f ITA 565/CHD/2022 A.Y. 2017-18 Page 14 of 20 S e c t i o n 2 7 3 B o f t h e I n c o m e Ta x A c t , 1 9 6 1 . Th u s , t he p l e a d i n g t h a t t h e a s s e s s e e w a s i n i g n o r a n c e o f l a w a t b e s t ca n b e c o n s i d e r e d t o b e a s u b m i s s i o n s o a s t o a r g u e t h a t it i s n o t a c a s e o f w i l l f u l a n d d e l i b e r a t e d e f i a n c e o f l a w o n t h e p ar t o f t h e a s s e s s e e . I n t h e f a c t s o f t h e p r e s e n t c a s e , t h e e x pl a n a t i o n o n r e c o r d t o b e c on s i d e r e d i s w h e t h e r a r e a s o n a b l e c a us e f o r t h e v i o l a t i o n i s m a d e o u t o n f a c t s o r n o t . S e c t i o n 2 7 3 B o f t h e I n c o m e Ta x A c t s p e c i f i c a l l y l a y s d o w n t h at i n c a s e t h e a s se s s e e o f f e r s a n e x p l a n a t i o n s h o w i n g r e a s o n a b l e c a u s e f o r t h e f a i l u re , t h e n t h e p e n a l t i e s c o n s i d e r e d t h e r e i n i n c l u d i n g p e n a l t y u / s 2 7 1 D i s n o t a t t r a c t e d . I n t he f a c t s o f t h e p r e s e n t c a s e , a d m i t te d l y t h e a s s e s s e e h a s l e d s u f f i c i e n t e x p l a n a t i o n s c o n s i s t e n tl y o n r e c o r d w i t h e v i d e n c e w h i c h r e m a i n s u n r e b u t t e d t o p l e a d a re a s o n a b le c a u s e . N o d o ub t , w h a t w o u l d c o n s t i t u t e a re a s o n a b le c a u s e c a n n o t b e s p e c i f i c a l l y d e f i n e d b y a n y c l e a r d e f i n i ti o n i t i s t o b e c o n s i d e r e d o n t h e b a s i s o f a l l t h e p o s s i b l e f a c t o r s w h i c h m a y c o m e i n t o p l a y f o r t h e a c t i o n s o f t h e a s s e s s e e . The v e r y e x p r e s s i o n ‘ r e a s o n a b l e c a u s e ’ it s e l f c a n n o t b e s a t is f a c t o r i l y d e f i n e d f o r a l l p u r p o s e s , t i m e s a n d s i t u a t i o n s. The s i m p l e d i c t i o n a r y m e a n i n g o f ‘ r e a s o n a b l e ’ i s f a i r , p r a c t i cal a n d s e n s i b l e . O v e r a p e r i o d o f t i m e , i t h a s b e e n s e e n t h a t a r e a so n a b l e c a u s e i s a s t a n d a r d o f p ro o f t h a t i s a p p l ie d t o a s e t o f f act s o r a c t i o n s to ITA 565/CHD/2022 A.Y. 2017-18 Page 15 of 20 p r o v e w h e t h e r a r e a s o n a b l e p e r s o n w o u l d h a v e c om e to t h e s a me c o n c l u s i o n o r a c t e d i n t h e s a m e w a y g i v e n t h e t o t a li t y o f t h e c i r c u m s t a n c e s . T h u s , i t c a n b e f ai r l y d e s c r i b e d a s a n e x e r c i s e t o d e t e r m i n e w h e t h e r a r a t i o n a l e b a s i s f o r a c t i o n t a k en i s a v a i l a b l e o n r e c o r d o r n o t . I t m a y b e n e c es s a r y t o a l s o w e i g h j u d i c i o u s l y w h e t h e r t h e a c t i o n s a r e e x c e s s i v e o r m o d e r a t e t o a dd r e s s t h e s i t u a t i o n . A p p l y i n g t h e s e y a r d s t i c k s , c o n s i d e r i n g t h e c o n s i s t e n t e x p l a n a t i o n a v a i l a b l e o n r e c o r d , I a m s a t i s f i e d t h at t h e a s s e s s e e h a s s u c c e s s f u l l y m a d e o u t a c a s e d e m o n s t r a t i n g t h a t t h e r e w a s a r e a s o n a b l e c a u s e f o r h e r t o a c c e pt p a y m e n t s o n t he s p e c i f i c d a t e s a n d t h u s , t h e b on a f i d e e x p l a n a t i o n o f f e r e d b y t h e as s e s s e e i n t h e p e c u l i a r f a c t s o f t h e p r e s e n t c a s e , I f i n d d e s e r v e s to b e a c c e p t e d . Th e p e n a l t y , a c c o r d i n g l y , i s d i r e c t e d t o b e q u a s h e d. 8 . W h i l e c o m i n g t o t h e s a i d c o n c l u s i o n , I h a v e t a k en i n t o c o n s i d e r a t i o n t h e v a r i o u s d e c i s i o n s c i t e d i n t h e ord e r s a n d r e l i e d u p o n i n t h e p r o c e e d i n g s b e f o r e t h e I TA T. 9 . B e f o r e p a r t i n g , I d e e m i t a p p r o p ri a t e t o a d d r e s s th e s p e c i f i c o b j e c t i o n o f t h e l d . S r . D R n a m e l y t h a t i g n o r a n c e o f l a w i s n o t a n e x c u s e . I f i n d t ha t t h e s a i d s u b m i s s i o n c o r r e c t i n l a w i s n o t o p en t o d e b a t e a n d i s a v a l i d s u b m i s s i o n . H o w e v e r , i n t he p r e s e n t s e t o f f a c t s t h o u g h i t i s p l e a d e d , i t n e e d b e e m p h a s i z ed t h a t i t h a s ITA 565/CHD/2022 A.Y. 2017-18 Page 16 of 20 n o t b e e n t h e r e a s o n o r r a t i o n a l e f o r q u a s h i n g t h e pe n a l t y . A t t h e c o s t o f r e - i t e r a t i o n w h a t i s r e q u i r e d t o b e s e e n f or c o n f i r m i n g o r q u a s h i n g t h e p e n a l t y i m p o s e d i s t h e a v a i l a b i l i t y o f t h e s h e l t e r p r o v i d e d b y S e c t i o n 2 7 3 B o f t h e I n c o m e Ta x A c t t o th e g i v e n s e t o f f a c t s . Th e l e e - w a y g i v e n b y t h e p r o v i s i o n p e r m i t t in g t h e a s s e s s e e t o p l e a d r e a s o n a b l e c a u s e f o r t h e f a i l u r e h a s t o be e x a m i n e d f a i r l y . Th e s a i d a r g u m e n t , a c c o r d i n g l y , s t a n d s a d d re s s e d b y w a y o f q u a s h i n g t h e p e n a l t y i m p o s e d . C o n s i d e r i n g t h e p re d i c a m e n t o f t h e p r e s e n t a s s e s s e e a n d n o t i c i n g n e a r s i m i l a r d i f fi c u l t i e s e x p e r i e n c e d b y a s i z e a b l e n u m b e r o f m a r g i n a l t a x p ay e r s l a c k i n g p r o p e r a d v i c e , ap p r o p r i a t e e x p o s u r e I b e l i e v e t ha t I w o u l d b e f a i l i n g i n m y d u ty i n n o t h i g h l i g ht i n g a g a i n t h e urg e n t n e e d a n d r e q u i r e m e n t for the Tax Administration to take necessary steps on a war footing in disseminating relevant information to the public at large i.e. inform them on acceptable ways of transacting and the need to maintain financial trail of your documents etc. I find that it is necessary to address t h i s u r g e n t n e e d o f t h e t ime s e m p h a s i z i n g t h a t s t i l l m o r e e f f o r t s n e e d t o b e m a d e b y t h e t ax a u t h o r i t i e s t o d i s s e m i n a t e t h i s i n f o r m a t i o n . I t i s n e c e s s a r y t o cr e a t e a w a r e n e s s i n t h e p u b l i c d om a i n o f t h e v a r i ou s l e g a l r e q u i r e men t s w h i c h e v e n s m a l l t a x p a y e r s n e e d t o b e a w a re o f . Th e t a x au t h or i t i e s h a v e s u f f i c i e n t f u n d s f o r d i s s e m i n a t i n g i n f o r m a t i o n t o th e p u b l i c in ITA 565/CHD/2022 A.Y. 2017-18 Page 17 of 20 o r d e r t o e n s u r e t a x c o m p l i a n c e s . N o t l i m i t i n g t h e s e e f f o r t s t o t h e p o p u l a t i o n a t t e n d i n g C o n f e r e n c e s a n d m e g a e v e n t s i n 5 S t a r H o t e l s t h e e f f o r t s c o u l d a l s o b e f oc u s e d o n d i s s e m in a t i n g r e l e v a n t i n f o r m a t i o n t o t h e f r i n g e t a x p a y e r s a l s o w h o c o n s tit u t e a s i z e a b l e p o p u l a t i o n o f t h e I n d i a n e c o n o m y . D u e t o p o s s i b l e su d d e n s p u r t i n t h e i r s m a l l b us i n e s s e s e n a b l e d b y t h e d e v e l o p me nt a l e c o n o m i c f o r c e s i n t h e c o u n t r y o r o n e t i m e e v e nt o f s a l e o f a g r i c u l t u r a l / a n c e s t r a l p r o p e r t y e t c . , t h e c o n s e q u e nt s u d d e n d e p o s i t s i n t h e i r b a n k a c c o u n t s n e c e s s a r i l y t r i g g e rs a t t e n t i o n o f t h e t a x a d m i n i st r a t i o n . Th i s e v e n t s h o u l d n o t b e t he s t a r t o f p r o b l e m s i n i n t er a c t i o n s w i t h t he t a x a d m i n i s t r at i on . S i n c e t h e i m p o r t a n c e o f m a i n t a i n i n g f i n a n c i a l t r a i l o f d o c u m en t s i s n o t u n d e r s t o o d a n d f o r w a n t o f p r o pe r i n f o r m a t i o n , I h av e s e e n t h i s p o p u l a t i o n o f t e n l e f t f l a i l i n g l i k e f i s h o u t o f w a te r , i t n e e d s t o b e a d d r e s s e d . Th e r e l e v a n c e a n d i m p o r t a n c e o f m a i n t a i ni n g a f i n a n c i a l t r a i l o f d o c u m e n t s e t c . i t i s m y o p i n i on n e e d s t o b e u r g e n t l y p u b l i c i z e d t o t h e a f f e c t e d p o p u l a t i o n . Th e r e c e i p t o f m o n e y c a t a p u l t s t h e m i n u n k n o w n t e r r i t o r i e s o f t a x a d m i n i s t r a t i o n . The Assessing Officer too busy to meet his own targets may not be sufficiently equipped alone to help these hapless people to be tax compliant. I t i s m y h u m bl e o p i n i o n t h a t ITA 565/CHD/2022 A.Y. 2017-18 Page 18 of 20 t h e m i n d s e t o f th e e n t i r e t a x a dm i n i s t r a t i o n h a s t o c h a n g e . Th e j o u r n e y f r o m c o l o n i a l t i m e s t a x c o l l e c t o r s a s a u t h or i t a r i a n f i g u r e s t o p e o p l e f r i e n d l y t a x a d m i n i s t r a t i o n m u s t s t a r t . As an economy India is moving as a juggernaut towards 7 trillion dollars. For achieving this laudable aim, we necessarily need to financially empower and enable all citizens to be ready for this change. The drag on the system by ill equipped vulnerable citizens needs to be addressed on a priority a s i n t h e a b s e n c e o f a n y s u p p o r t , t h e y c a n f a l l p r e y t o a l i e n a t i n g a n d d i v i s i v e f o r c e s a n d c o ul d t r a g i c a l l y w r o n g l y t r u s t t h e d u b i o u s m a n i p u l a t o r s o f t h e s y s t em i n s t e a d o f p l a c i n g r e l i a n c e o n t h e g o o d a d v i c e a n d o f f i c e s o f s y s t e m a t i c s u p p o r t i v e t a x a d m i n i s t r a t i o n o f t h e c o u n t r y . Hence, in my opinion disseminating financial literacy information for ensuring compliances to the citizens cannot be postponed any further as in the absence of relevant information, the public at large comprising of small taxpayers are left floundering hopelessly in the sea of confusion due to administrative obduracy which fails to provide these people sound helpful advice/assistance and thus by default creating in them a sense of alienation with the Indian polity on account of the administrative apathy. Th e r i s k s o f r e s u l t a n t p u s h o f t h i s p o p u l a t i on i n a d v e r t e n t l y to w a r d s d i s h o n e s t m e a n s o f o n ly b e i n g s e e n t o b e c o m p l i a n t i n s h e e r n u m b e r s a nd p e r c e n t a g e s ITA 565/CHD/2022 A.Y. 2017-18 Page 19 of 20 s h o u l d n o t b e o v e r l o o k e d . Th i s p o p u l a t i o n i n t e r m s o f t o t a l f i n a n c i a l c o n t r i b u t i o n t o t h e f i na n c i a l k i t t y o f the c o u n t r y m a y n o t b e c o n t r i b u t i n g m u c h , h o w e v e r , t h e i m p a c t o n t he s o c i o - e c o n o m i c s y s t e m o f t h e c o u n t r y b y t h i s h u m a n p o p u l at i o n i n s h e e r n u m b e r s a s t h e y c o n s t i t u t e a s i z e a b l e p a r t o f t h e f a b r i c o f t h e c o u n t r y s h o u l d n o t b e t a k e n l i g h t l y a n d c a n n o l o n g e r be i g n o r e d . A country moving towards 7 trillion aspirations cannot afford to ignore the foundational bedrock requirements of these ambitions. Th e ne e d s o f t h e c h a ng i n g t i m e s h a v e t o b e m e t . Th e p r e p a r a t i o n s f o r t h e c h a n g e c a nn o t b e p o s t p o n e d . The necessity of creating and enabling the creation within the country high ethical standards with the highest possible compliances and an environment of fair functioning of the country cannot be ignored. This ground work needs to be done now. Th e s e m a r g i n a l t a x p a y e r s p r o v i d i n g t h e i m p e t u s t o t h e I nd i a n e c o n o m i c j u g g e rn a u t n e e d a l s o t o b e t a k e n o n b o a r d a n d c an n o t b e i g n o r e d . Their one and only exposure to the bureaucracy should not be one of pain and alienation. Infact, sound advice and help should be made available to them to ensure that they stay within the bounds of law. 1 0 . A c c o r d i n g l y , h i g h l i g h t i n g t h e s u g g e s t i o n s i n p ar a 9 Registry is directed to forward a copy of this order to the Chairman, CBDT for information and appropriate action, if deemed fit. ITA 565/CHD/2022 A.Y. 2017-18 Page 20 of 20 1 1 . I n t h e r e s u l t , a pp e a l o f t h e a s s e s s e e i s a l l o w ed . O r d e r p r o n o u n c e d i n t h e O p e n C o u r t o n 0 2 M a r c h , 2 0 23 . Sd/- ( दवा संह ) (DIVA SINGH) या#यक सद य/Judicial Member “प ू नम” आदेश क琉 灹ितिलिप अ灡ेिषत/ Copy of the order forwarded to : 1. अपीलाथ牸/ The Appellant 2. 灹瀄यथ牸/ The Respondent 3. आयकर आयु猴/ CIT 4. िवभागीय 灹ितिनिध, आयकर अपीलीय आिधकरण, च瀃डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड榁 फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar