Rahul Kundu, Burdwan V. I.T.O.,Ward-1(2), Burdwan

ITA 641/KOL/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7405 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 01-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: SUBHO CHAKRABORTY
• Keywords: Reasonable cause
• Section: 143(3); 271D; 22

Judgement Text

ITA NO. 641/KOL/2019 A.Y. 20 13-2014 RAHUL KUNDU 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA C BENCH, KOLKATA [VIRTUAL COURT HEARING] BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT & SHRI A.T. VARKEY, JUDICIAL MEMBER I.T.A. NO. 641/KOL/2019 ASSESSMENT YEAR: 2013-2014 RAHUL KUNDU,....................................... ...............................................APPE LLANT BHATCHALLA, SRIPALLY, BURDWAN-713101 [PAN:AKFPK7524A] -VS.- INCOME TAX OFFICER,.................. .....................RESPONDENT WARD-1(2), BURDWAN, AAYAKAR BHAWAN, KACHARI ROAD, COURT COMPOUND, BURDWAN APPEARANCES BY: SHRI SUBHO CHAKRABORTY, ADVOCATE, APPEARED ON BEHAL F OF THE ASSESSEE SHRI SUPRIYO PAL, ADDL. CIT , APPEARED ON BEHALF OF THE REVENUE DATE OF CONCLUDING THE HEARING : AUGUST 12, 2021 DATE OF PRONOUNCING THE ORDER : AUGUST 18, 2021 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), BURDWAN DATED 04.01.2019, WHEREBY HE CONFIRMED THE PENALTY OF RS.1,95,000/- I MPOSED BY THE ASSESSING OFFICER UNDER SECTION 271D OF THE INCOME TAX ACT, 1961 . 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO IS ENGAGED IN THE BUSINESS OF TRADING IN PACKAGED MILK. IN THE AS SESSMENT COMPLETED UNDER SECTION 143(3) VIDE AN ORDER DATED 17.03.2016 , THE TOTAL INCOME OF THE ASSESSEE WAS DETERMINED BY THE ASSESSING OFFICE R AT RS.5,69,860/- AS AGAINST THE TOTAL INCOME OF RS.1,99,940/- RETURNED BY THE ASSESSEE. AS NOTED BY THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A LOAN OF RS.1,95,000/- WAS RECEIVED B Y THE ASSESSEE IN CASH ITA NO. 641/KOL/2019 A.Y. 20 13-2014 RAHUL KUNDU 2 FROM HIS BROTHER SHRI NABARUN KUNDU ON 31.03.2013 I N CONTRAVENTION OF THE PROVISION OF SECTION 269SS OF THE ACT. HE, THER EFORE, INITIATED THE PENALTY PROCEEDINGS UNDER SECTION 271D OF THE ACT A ND ISSUED SHOW-CAUSE NOTICE TO THE ASSESSEE. IN REPLY TO THE SAID NOTICE , A LETTER WAS FILED BY THE ASSESSEE STATING THAT HE HAD TO ARRANGE LOAN OF RS. 1,95,000/- IN CASH FROM HIS BROTHER SHRI NABARUN KUNDU FOR BUSINESS EXIGENC Y ON 31.03.2014, WHICH WAS A SUNDAY. HE ALSO SUBMITTED THAT THE SAME WAS BANK HOLIDAY AND, THEREFORE, THE SAID LOAN COULD NOT BE AVAILED BY CROSS CHEQUE OR BANK DRAFT. THIS EXPLANATION OF THE ASSESSEE WAS NOT FOU ND SATISFACTORY BY THE ASSESSING OFFICER AND HOLDING THAT THE SAME DID NOT CONSTITUTE THE REASONABLE CAUSE FOR AVAILING THE LOAN BY THE ASSES SEE IN CONTRAVENTION OF THE PROVISION OF SECTION 269SS, HE PROCEEDED TO IMP OSE THE PENALTY OF RS.1,95,000/- UNDER SECTION 271D OF THE ACT. 3. THE PENALTY IMPOSED BY THE ASSESSING OFFICER UND ER SECTION 271D WAS CHALLENGED BY THE ASSESSEE IN THE APPEAL FILED BEFORE THE LD. CIT(APPEALS) AND THE SUBMISSION MADE BEFORE THE ASS ESSING OFFICER WAS REITERATED ON BEHALF OF THE ASSESSEE BEFORE THE LD. CIT(APPEALS) IN SUPPORT OF HIS CASE THAT THERE BEING A REASONABLE C AUSE FOR ACCEPTING THE LOAN IN QUESTION FROM HIS BROTHER IN CASH, THE IMPO SITION OF PENALTY UNDER SECTION 271D WAS NOT TENABLE. THE LD. CIT(APPEALS) DID NOT FIND MERIT IN THE SUBMISSION MADE ON BEHALF OF THE ASSESSEE. ACCO RDING TO HIM, THE ASSESSEE, AS RIGHTLY OBSERVED BY THE ASSESSING OFFI CER, SHOULD HAVE OPTED ONLINE BANKING MODE OR SHOULD HAVE UTILIZED DEBIT O R CREDIT CARDS FOR ARRANGING THE AMOUNT REQUIRED BY HIM WHICH WAS AVAI LABLE ON BANK HOLIDAY. HE ACCORDINGLY HELD THAT THERE WAS NO REAS ONABLE CAUSE FOR THE ACCEPTANCE OF LOAN OF THE ASSESSEE FROM HIS BROTHER IN CASH IN CONTRAVENTION OF THE PROVISION OF SECTION 269SS. T HE LD. CIT(APPEALS), THEREFORE, CONFIRMED THE PENALTY IMPOSED BY THE ASS ESSING OFFICER UNDER SECTION 271D BY HIS APPELLATE ORDER DATED 04.01.20 19. AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PRE FERRED THIS APPEAL BEFORE THE TRIBUNAL. ITA NO. 641/KOL/2019 A.Y. 20 13-2014 RAHUL KUNDU 3 4. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. AS SUBMITTED BY THE LD. COUNSEL ON BEHALF OF THE ASSESSEE BEFORE THE AUTHORITIES BELOW AS WELL AS BEFORE THE TRIBUNAL, THE LOAN AMOUNT IN QUESTION WAS RECEIVED BY THE ASSESSEE IN CASH FROM HIS BROTHER SHRI NABARUN KUNDU AND THIS P OSITION HAS NOT BEEN DISPUTED EITHER BY THE AUTHORITIES BELOW OR EVEN BY THE LD. D.R. AT THE TIME OF HEARING BEFORE US. IN THE CASE OF ITO VS.- SUNIL M. KASLIWAL [(2003) 80 TTJ (PUNE) (TM) 1] CITED BY THE LD. COUN SEL FOR THE ASSESSEE, IT WAS HELD BY THE TRIBUNAL THAT THE PROVISIONS OF SEC TION 269SS OF THE ACT APPLY TO LOANS/DEPOSITS TAKEN FROM ANY OTHER PERSO N AND THE SAID EXPRESSION ANY OTHER PERSON APPEARING IN SECTION 269SS OF THE ACT MEANS PERSONS WHO ARE NOT VERY CLOSELY CONNECTED WI TH THE ASSESSEE. IT WAS HELD THAT WHERE THE TRANSACTIONS HAD TAKEN PLAC E WITH CLOSELY RELATED PERSONS IN THE FAMILY AND THE GENUINENESS OF THE TR ANSACTIONS IS NOT DOUBTED, PENALTY UNDER SECTION 271D OF THE ACT COUL D NOT BE LEVIED. A SIMILAR VIEW HAS BEEN EXPRESSED BY THE BANGALORE BE NCH OF THE TRIBUNAL IN THE CASE OF G.D. SUBRAYA SHEREGAR VS.- ITO (200 6) 10 ITR 378, WHEREIN CONTRAVENTION OF PROVISION OF SECTION 269SS WAS HEL D TO BE NOT APPLICABLE IN A TRANSACTION BETWEEN A FATHER AND SON. AS POINT ED OUT BY THE LD. COUNSEL FOR THE ASSESSEE, KOLKATA BENCH OF THIS TRI BUNAL HAS FOLLOWED BOTH THESE DECISIONS OF THE COORDINATE BENCHES TO D ELETE THE PENALTY IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271D OF THE ACT AS CONFIRMED BY THE LD. CIT(APPEALS) IN THE CASE OF RA NJIT ROY VS.- JCIT VIDE ITS ORDER DATED MARCH 29, 2019 PASSED IN ITA NO. 22 54/KOL/2017 WHERE THE LOAN TRANSACTION WAS BETWEEN THE RELATED PARTIE S. RESPECTFULLY FOLLOWING THE RATIO OF ALL THESE DECISIONS OF THIS TRIBUNAL, WE HOLD THAT THE PENALTY IMPOSED BY THE ASSESSING OFFICER UNDER SECT ION 271D AND CONFIRMED BY THE LD. CIT(APPEALS) IN THE CASE OF LO AN TRANSACTION BETWEEN TWO BROTHER IS NOT SUSTAINABLE AND CANCELLING THE S AME, WE ALLOW THIS APPEAL OF THE ASSESSEE. ITA NO. 641/KOL/2019 A.Y. 20 13-2014 RAHUL KUNDU 4 5. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON AUGUST 18, 20 21. SD/- SD/- (A.T. VARKEY (P.M. JAGTAP) JUDICIAL MEMBER VICE-PRESIDENT KOLKATA, THE 18 TH DAY OF AUGUST, 2021 COPIES TO : (1) RAHUL KUNDU, BHATCHALLA, SRIPALLY, BURDWAN-713101 (2) INCOME TAX OFFICER, WARD-1(2), BURDWAN, AAYAKAR BHAWAN, KACHARI ROAD, COURT COMPOUND, BURDWAN (3) COMMISSIONER OF INCOME TAX (APPEALS), BURDWAN , (4) COMMISSIONER OF INCOME TAX , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER SENIOR PRIVATE SE CRETARY/DDO, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.