M/s Naresh Kumar Ahuja, Karnal V. JCIT, Karnal

ITA 5660/DEL/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 5148 (ITAT-DELHI)
• Duration Of Justice: 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-06-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 04-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T VASANTHAN
• Assessee Lawyers: R C RAI
• Keywords: Gift; Initiation of penalty proceedings

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES SMC : DELHI SHRI BHAVNESH SAINI, JUDICIAL MEMBER ITA.NO.5660/DEL./2016 ASSESSMENT YEAR 2012-2013 M/S. NARESH KUMAR AHUJA, HOUSE NO.574, SECTOR-7, KARNAL 132 001. PAN AATPA0502A VS. THE JCIT KARNAL RANGE KARNAL. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI R.C. RAI, C.A. FOR REVENUE : SHRI T. VASANTHAN, SR. D.R. DATE OF HEARING : 08.08.2017 DATE OF PRONOUNCEMENT : 17.08.2017 ORDER THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A), KARNAL, DATED 06 TH SEPTEMBER, 2016 FOR A.Y. 2012-2013, CHALLENGING THE LEVY OF PENALTY UNDER SEC TION 271D OF THE I.T. ACT, 1961. 2. IN THIS CASE, AT THE TIME OF ASSESSMENT THE A.O. OB SERVED THAT THE ASSESSEE HAS ACCEPTED CASH DEPOSIT OF RS.8.60 LAKHS FROM SHRI SURESH KUMAR, RS.4 LAKHS FROM SMT. ANITA AHUJA A ND A PROPOSAL FOR LEVY OF PENALTY WAS FORWARDED TO THE JCIT AND SUB SEQUENTLY, AN OPPORTUNITY WAS PROVIDED TO THE ASSESSEE TO EXPLAIN AS TO WHY PENALTY UNDER SECTION 271D SHOULD NOT BE IMPOSED. THE JCIT, R EJECTED THE CONTENTION OF ASSESSEE AFTER CONSIDERING REPLY OF ASS ESSEE. THE JCIT REJECTED THE CONTENTION OF ASSESSEE WITH REGARD TO RS.4 LAKHS RECEIVED FROM SMT. ANITA AHUJA, IT SHOULD BE CONSIDERED AS GIFT FROM WIFE AND NOT AS LOAN. JCIT FURTHER OBSERVED THAT THERE WERE NO ME NTION OF ANY OCCASION FOR GIFT AND THERE WAS NO JUSTIFICATION FOR MAKING PAYMENT IN 2 ITA.NO.5660/DELL./2016 M/S. NARESH KUMAR AHUJA, KARNAL. CASH WHEN THERE WAS EASY ACCESS TO BANK CHANNELS AND ELECTRONIC CLEARING SYSTEM. THE JCIT ALSO OBSERVED THAT THERE WAS NO URGENCY OF CASH FOR SUCH TRANSACTION TO BE JUSTIFIED. THE JCIT FU RTHER OBSERVED THAT WITH REGARD TO RS.8.60 LAKHS FROM SHRI SURESH KUM AR, THE CONTENTION OF SHRI SURESH KUMAR THAT DUE TO URGENCY TO M AKE PAYMENT IN COMMODITY EXCHANGE THIS CASH AMOUNT WAS DEP OSITED, WAS NOT ACCEPTABLE SINCE THE ELECTRONIC CLEARING SYSTEM AND ONLINE INTERNET BANKING WAS AVAILABLE WITH SHRI SURESH KUMAR. THE JC IT ALSO OBSERVED THAT THE CONTENTION OF SHRI SURESH KUMAR THAT THER E WAS JOINT INVESTMENT WITH THE ASSESSEE IS NOT ACCEPTABLE IN V IEW OF HIS STATEMENT AND REPLY FILED WHEREIN HE HAS STATED THAT APAR T FROM THE TRANSACTION OF RS.8.60 LAKHS THERE WAS NO OTHER TRANSACTI ON WITH THE ASSESSEE. THE A.O. ACCORDINGLY, LEVIED THE PENALTY U NDER SECTION 271D OF THE I.T. ACT. 3. THE ASSESSEE CHALLENGED THE PENALTY ORDER BEFORE LD. CIT(A) AND WRITTEN STATEMENT OF THE ASSESSEE IS REPRODUCED IN TH E IMPUGNED ORDER IN WHICH THE ASSESSEE HAS BRIEFLY EXPLAINED THA T A.O. HAS NOT RECORDED ANY SATISFACTION NOR MADE ANY REFERENCE IN W HOLE ASSESSMENT ORDER ABOUT THE CONTRAVENING OF PROVISIONS OF SECTION 2 69SS AND 269T OF THE I.T. ACT. THEREFORE, PENALTY CANNOT BE IMPOSED. ASSESSEE RELIED UPON THE DECISION OF SUPREME COURT IN THE CASE OF CI T VS. JAI LAXMI RICE MILLS 379 ITR 521. THE ASSESSEE ALSO EXPLAINED THAT BOTH THE PARTIES ARE IDENTIFIABLE AND A.O. ACCEPTED THE GENUINE NESS OF THE TRANSACTIONS BY RECORDING THEIR STATEMENTS. THE SUBMISS IONS MADE BEFORE THE A.O. WERE REITERATED AND IT WAS ALSO SUBMI TTED THAT IT IS NOT A CASE OF LOAN OR DEPOSIT. IT WAS FURTHER SUBMITTED THAT TH ERE IS NO MATERIAL ON RECORD TO ESTABLISH THAT TRANSACTION HAVE BEE N AIMED AT CAMOUFLAGING ANY UNACCOUNTED MONEY AND THERE IS ALSO NO REBUTTAL TO THE CONTENTION OF ASSESSEE. IT WAS THEREFORE, SUBMITTED THA T PENALTY IS 3 ITA.NO.5660/DELL./2016 M/S. NARESH KUMAR AHUJA, KARNAL. NOT LEVIABLE. THE LD. CIT(A) HOWEVER, DID NOT ACCEPT TH E CONTENTION OF ASSESSEE AND DISMISS THE APPEAL OF ASSESSEE. 4. AFTER CONSIDERING THE RIVAL CONTENTIONS, I AM OF THE VIEW THAT PENALTY WOULD NOT BE LEVIABLE. LEARNED COUNSEL FO R THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW. 5. ON THE OTHER HAND, LD. D.R. RELIED UPON THE ORDE RS OF THE AUTHORITIES BELOW. 6. THE HONBLE SUPREME COURT IN THE CASE OF CIT VS. JAI LAXMI RICE MILLS (2015) 379 ITR 521(SC) HELD AS UND ER : FOR THE ASSESSMENT YEAR 1992-93 , THE ASSESSMENT ORDER WAS PASSED ON THE ASSESSEE ON FEBRUARY 26, 1996, EX-PARTE. WHILE FRAMING THE ASSESSMENT , THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HA D CONTRAVENED THE PROVISIONS OF SECTION 269SS OF THE INCOME-TAX ACT, 1961 , AND BECAUSE OF THIS THE ASSESS ING OFFICER WAS SATISFIED THAT PENALTY PROCEEDINGS UNDER SECTION 271D OF THE A C T WERE T O BE INITIATED. ON APPEAL, THE COMMISSIONER (APPEALS) BY ORDER DATED D EC E MBE R 5, 1996, SET ASIDE THE ASSESSMENT ORDER WITH A DIRECTION TO FRAME THE - AS SESSMENT DE NOVO AFTER AFFORDING ADEQUATE OPPORTUNITY TO THE ASSESSE E. MEANWH ILE PENA LTY UNDER SECTION 271D WAS LEVIED BY ORDER DATED SEPTEM BER 23, 1996, I . E ., BEFO R E THE APPEAL OF THE ASSESSEE AGAINST THE ORIGINAL ASS ESSMENT ORDER WAS HEARD A ND ALLO WED THEREBY SETTING ASIDE THE ASSESSMENT ORDER ITSE LF . AFTER REMAND, TH E ASS ES S I NG OFFICER PASSED A FRESH ASSESSMENT ORDER BUT IN THIS ASSESSMENT ORDER, NO SATISF AC TION REGARDING INITIATION OF PENALTY PROCEEDINGS UNDER SECTION 271D OF THE A CT W AS RECORDED. THE TRIBUNAL A S WELL AS THE HIGH COURT HELD THAT THE PENALTY O RDE R PASSED ON THE BASIS OF TH E O RIGINAL ASSESSMENT ORDER COULD NOT STILL SURVIV E W H EN THAT ASSESSMENT ORDER H AD B EE N SET ASIDE BECAUSE THE SATISFACTION RECORDED THERE IN FOR THE PURPOSE OF I N ITIATIO N O F THE PENALTY PROCEEDINGS WOULD ALSO NOT SUR V I VE. ON FURTHER APPEAL S : HELD, DISMISSING T H E APPEALS, THAT IN T THE FRESH ASSESSMENT ORDER THERE WAS NO SATISFACTION RECORDED R E GARDING PENALTY PROCEEDINGS UNDER SECTION 271D OF THE ACT THOUGH IN THAT ORDER THE ASSESSING OFFICER WANTED PENALTY PROCEEDING TO BE INITIATED UNDER SECTION 2 71 ( 1 )( C ) OF THE ACT . THUS, THE PENALTY UNDER SECTION 271D WAS WITHOUT ANY SAT IS FA CTI ON A N D , THEREFORE , NO SUCH PENALTY COULD BE LEVIED. 6.1. COPY OF THE ASSESSMENT ORDER UNDER SECTION 143(3 ) DATED 13 TH MARCH, 2015 IS FILED ON RECORD IN WHICH THE A.O. E XAMINED THE ISSUE OF SOURCE OF CASH DEPOSITS IN SAVINGS BANK ACC OUNTS AND CONSIDERED THE EXPLANATION OF ASSESSEE WITH REGARD TO RECEIPT OF THE ABOVE CASH AMOUNT. THE A.O. ACCEPTED THE EXPLANATION OF ASSESSEE 4 ITA.NO.5660/DELL./2016 M/S. NARESH KUMAR AHUJA, KARNAL. WITH REGARD TO CASH RECEIVED. A.O. IN THE ASSESSMENT ORDER DID NOT MENTION ANYTHING ABOUT THE ANY VIOLATION MADE BY ASSESS EE CONTRAVENING THE PROVISIONS OF SECTION 269SS SO AS TO LEVY PENALTY UNDER SECTION 271D OF THE I.T. ACT. THE A.O. DID NOT RE CORD ANY SATISFACTION WITH REGARD TO LEVY OF PENALTY IN THE ASSE SSMENT ORDER. THE A.O. EVEN DID NOT INITIATE THE PENALTY PROCEEDINGS UND ER SECTION 271D OF THE I.T. ACT. THEREFORE, THE ISSUE IS SQUARELY COVE RED BY THE JUDGMENT OF HONBLE SUPREME COURT IN THE CASE OF CIT V S. JAI LAXMI RICE MILLS (SUPRA). I, ACCORDINGLY, SET ASIDE THE PEN ALTY ORDERS AND CANCEL THE PENALTY. IN VIEW OF THE ABOVE, THERE IS NO NEED TO DECIDE THE PENALTY APPEAL ON MERITS. 7. IN THE RESULT, APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- (BHAVNESH SAINI) JUDICIAL MEMBER DELHI, DATED 17 TH AUGUST, 2017 VBP/- COPY TO 1. THE APPELLANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT SMC BENCH, DELHI 6. GUARD FILE // ASST. REGISTRAR // ITAT : DELHI BENCHES : DELHI.