ITO, New Delhi V. Smt. Kavita Behal, New Delhi

ITA 6528/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97856 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-11-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC 2
• Next Hearing Date: 04-11-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 06-12-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GARIMA JAIN
• Assessee Lawyers: SANJEEV SAXENA; DEVINDER K JAIN CAS
• Keywords: Reasonable cause; Commercial expediency
• Section: 273B

Judgement Text

ITA NOS. 6528 & 6529/DEL/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-2, NEW DELHI BEFORE SHRI H.S. SIDHU, JUDICIAL MEMBER I.T.A. N OS. 6528 & 6529 /DEL/2013 A.Y R. : 2009 - 10 ITO, WARD-5(2), ROOM NO. 234-B, CR BUILDING, IP ESTATE, NEW DELHI VS. SMT. KAVITA BEHAL, 49, LAJPAT NAGAR-III RING ROAD, NEW DELHI (PANAAEPB271P) (APPELLANT) (APPELLANT) (APPELLANT) (APPELLANT) (RESPONDENT) (RESPONDENT) (RESPONDENT) (RESPONDENT) DEPARTMENT BY : MS. GARIMA JAIN, SR. DR ASSESSEE BY : SH. SANJEEV SAXENA & SH. DEVINDER K. JAIN, CAS DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : DATE OF HEARING : 05 0505 05- -- -11 1111 11- -- -201 201 201 2015 55 5 DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : DATE OF ORDER : 16 1616 16- -- -11 1111 11- -- -201 201 201 2015 55 5 ORDER ORDER ORDER ORDER REVENUE HAS FILED THESE APPEALS AGAINST THE RESPE CTIVE IMPUGNED ORDERS BOTH DATED 06.9.2013 PASSED BY THE LD. CIT(A)-V, NE W DELHI RELEVANT TO ASSESSMENT YEARS 2009-10. SINCE THE ISSUES INVOLVE D IN BOTH THE APPEALS ARE IDENTICAL, HENCE, THESE APPEALS ARE BEING CONSOLIDA TED BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE, BY DEALING WITH ITA NO. 65 28/DEL/2013. 2. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN ITA N O. 6528/DEL/2013 (AY 2009-10) :- ITA NOS. 6528 & 6529/DEL/2013 2 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY U/S. 271D OF THE I.T. ACT, 1961 OF RS. 27,01,600/-. 2. THAT THE ORDER OF THE LD. CIT(A) IS ERRONEOUS AN D IS NOT TENABLE ON FACTS AND IN LAW. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, A MEND OR FORGO ANY GROUND(S) OF THE APPEAL RAISED ABOVE AT THE TIME OF THE HEARING. 3. THE FOLLOWING GROUNDS HAVE BEEN RAISED IN ITA NO . 6529/DEL/2013 (AY 2009-10) :- 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY U/S. 271E OF THE I.T. ACT, 1961 OF RS. 22,85,000/-. 2. THAT THE ORDER OF THE LD. CIT(A) IS ERRONEOUS AN D IS NOT TENABLE ON FACTS AND IN LAW. 3. THAT THE APPELLANT CRAVES LEAVE TO ADD, ALTER, A MEND OR FORGO ANY GROUND(S) OF THE APPEAL RAISED ABOVE AT THE TIME OF THE HEARING. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E FILED HER RETURN OF INCOME ON 30.07.2009 DECLARING AN INCOME OF RS.1,78,400/- . THE CASE WAS FIXED FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED ON 30.12. 2011 AT AN INCOME OF RS. 1,78,400/-. AS PER A.O. ASSESSEE IS MAINTAINING THE BANK ACCOUNTS AND IN THESE ACCOUNTS NUMEROUS CASH DEPOSITS TOTALING TO R S. 27,01,600/- HAVE BEEN MADE BY THE HUSBAND OF THE ASSESSEE MR. DEEPAK BEHA L DURING THE A.Y. 2009- 10 ON VARIOUS DATES. IT IS ALSO SEEN THAT REPAYMENT WAS MADE IN CASH TOTALING RS. 22,85,000/- BY THE ASSESSEE TO HER HUSBAND ON VARIO US DATES DURING THE A.Y. ITA NOS. 6528 & 6529/DEL/2013 3 2009-10. THOUGH NO ADVERSE INFERENCE OF THE SAME WA S DRAWN IN THE ASSESSMENT ORDER BUT PENALTY U/S 271D WAS INITIATED BY LEARNED A.O. THEREAFTER THE AO TOOK UP THE CASE AND ISSUED SHOW CAUSE NOTI CE FOR PENALTY U/S 271D AND PASSED AN EX-PARTE ORDER DATED 27.09.2012 U/S 2 71D OF THE ACT IMPOSING THE PENALTY OF RS. 27,01,600/-. 5. AGAINST THE ABOVE PENALTY ORDER, THE ASSESSEE A PPEALED BEFORE THE LD. CIT(A), WHO VIDE IMPUGNED ORDER DATED 6.9.2013 HAS ALLOWED THE APPEAL OF THE ASSESSEE AND DELETE THE PENALTY IN DISPUTE. 6. AGGRIEVED WITH THE LD. CIT(A)S ORDER DATED 6.9. 2013, REVENUE IS IN APPEAL BEFORE THE TRIBUNAL. 7. LD. DR RELIED UPON THE ORDER OF THE ASSESSING O FFICER AND FURTHER RELIED UPON THE DECISION OF THE MADRAS HIGH COURT IN THE C ASE OF P. BASKAR VS. CIT 340 ITR 560 WHEREIN IT HAS BEEN HELD THAT EXCEPT FOR THE MERE STATEMENT THAT THE RECEIPT OF AMOUNT IN CASH WAS ON ACCOUNT OF BUSINES S EXIGENCY AND TO MEET THE LIQUIDITY, THERE WAS NO MATERIAL TO SHOW THAT IN FA CT THERE WAS A REAL EXIGENCY THAT COMPELLED THE ASSESSEE TO TAKE A CASH LOAN. P ENALTY HAD TO BE LEVIED. 8. ON THE OTHER HAND, LD. COUNSEL FOR THE ASSESSEE RELIED UPON THE ORDER OF THE LD. CIT(A) AND ALSO RELIED UPON THE FOLLOWING C ASES LAWS AND STATED THAT THE PRESENT CASE OF THE ASSESSEE IS SQUARELY COVERED B Y THESE CASE LAWS:- (A) KAMEN JASWANTLAL SHAH VS. ITO {2012) 19 TAXMANN.COM 99 (AHD.) - ITAT, AHMEDABAD (B) CIT VS. SREE KRISHNA PROMOTERS & BUILDERS [2011 ] 16 TAXMANN.COM 138 (KAR.) HIGH COURT OF KARNATAKA ITA NOS. 6528 & 6529/DEL/2013 4 (C) CIT VS. SHIVALIK LOHA MILLS LTD. 2007-TIOL-7 5-HC- P&H-IT (D) CIT VS. BANGALORE LEATHER & LEATHER CRAFTS LTD. [2012] 19 TAXMANN.COM 21 (KAR.) (E) CIT VS. LAKSHMI TRUST CO. [2008] 303 ITR 99 (MA D.) (F) CIT VS. BALAJI TRADERS [2008] 167 TAXMAN 27 (MA D.) (G) ADDL. CIT VS. BBL FOODS PVT. LTD. 2008-TIOL-29 9- ITAT-HYD. (H) RAJENDRA SURYAVANSHI VS. ACIT [2012]TAXMANN.COM 358 (PUNE) ITAT, PUNE BENCH. I) CIT VS. CADBURY INDIA LTD. [2011] 11 TAXMANN.CO M 66 DELHI HIGH COURT OF DELHI. (J) BRANCH MANAGER, PUNJAB NATIONAL BANK VS. ADDL. CIT [2011] 16 TAXMANN.COM 318 (LUCK.) ITAT, LUCKNOW. (K) CIT VS. LOKHPAT FILM EXCHANGE (CINEMA) [ 2008] 304 ITR 172 (RAJ.) RAJASTHAN HIGH COURT. (L) DCIT VS. AKHILESH KUMAR YADAV [2012] 26 TAXMANN.COM 264 (AGRA TRIBUNAL) (M) BRIGHT PLAY CENTRE VS. ADDL. CIT 2011-TIOL-712- ITAT- AHM (N) OMEC ENGINEERS VS. CIT [2007] 294 ITR 599 (JHAR ) (O) CIT VS. T. PERUMAL (INDL.) [2015] 370 ITR 313 (MAD.) ITA NOS. 6528 & 6529/DEL/2013 5 (P) CIT VS. SPEEDWAYS RUBBER PVT. LTD. [2010] 326 I TR 31 (P&H). 9. I HAVE HEARD BOTH THE PARTIES AND PERUSED THE R ELEVANT RECORDS, ESPECIALLY THE ORDERS OF THE REVENUE AUTHORITIES A S WELL AS THE CASE LAWS CITED BY BOTH THE PARTIES. I FIND THAT LD. FIRST APPE LLATE AUTHORITY HAS ELABORATELY DISCUSSED THE ISSUE IN DISPUTE BY CONSIDERING THE SUBMISSIONS OF THE LD. COUNSEL OF THE ASSESSEE AND ADJUDICATED THE ISSUE IN DISP UTE AS UNDER:- 6. AFTER CONSIDERING NATURE OF TRANSACTIONS THE I SSUE TO BE EXAMINED IN THE CASE UNDER CONSIDERATION WHETHER PE NALTY UNDER SECTION 271 D IS LEVIABLE WHEN ASSESSEE WAS H AVING REASONABLE CAUSE. I NOTICED THAT WHILE INTRODUCING SECTION 269SS, SECTION 273B WAS ALSO INCORPORATED IN THE ST ATUTE WHICH PROVIDES THAT NO PENALTY SHALL BE IMPOSABLE O N A PERSON OR AN ASSESSEE, AS THE CASE MAY BE, FOR ANY FAILURE REFERRED TO IN THE SAID PROVISION IF THE ASSESSEE P ROVES THAT THERE WAS A REASONABLE CAUSE FOR SUCH FAILURE. IN O THER WORDS, PENALTY IS NOT AUTOMATIC UNDER SECTION 271D ON MERE VIOLATIONS OF PROVISIONS OF SECTION 269SS.THE WORDS REASONABLE CAUSE' HAVE NOT BEEN DEFINED UNDER THE ACT, BUT THEY COULD RECEIVE THE SAME INTERPRETATION WHICH IS GIVEN TO THE EXPRESSION 'SUFFICIENT CAUSE'. THEREFORE, IN TH E CONTEXT OF THE PENALTY PROVISIONS, THE WORDS 'REASONABLE CAUS E' WOULD MEAN A CAUSE WHICH IS BEYOND THE CONTROL OF THE ASS ESSEE. REASONABLE CAUSE' OBVIOUSLY MEANS A CAUSE WHICH PR EVENTS A REASONABLE MAN OF ORDINARY PRUDENCE ACTING UNDER NORMAL CIRCUMSTANCES, WITHOUT NEGLIGENCE OR INACTION OR WA NT OF ITA NOS. 6528 & 6529/DEL/2013 6 BONAFIDES. BEFORE IMPOSITION OF PENALTY UNDER THESE SECTIONS, THE ASSESSING OFFICER MUST BE SATISFIED, NOT ARBITR ARILY BUT JUDICIOUSLY, THAT THE ASSESSEE HAS WITHOUT REASONAB LE CAUSE FAILED TO COMPLY WITH THE PROVISIONS. WHILE CONSIDE RING REASONABLENESS ONE SHOULD KEEP IN MIND COMMERCIAL EXPEDIENCY AND OBJECT OF THE SECTION FOR WHICH IT W AS INSERTED. IT IS TO SEE WHETHER THE TRANSACTION IS I N ACCORDANCE WITH COMMERCIAL EXPEDIENCY. IF I SEE THE FACTS OF T HE CASE UNDER CONSIDERATION IN CONSOLIDATED WAY, I NOTICED THAT THE ASSESSEE HAS DEMONSTRATED THE FUNDS WERE ARRANGED I N CASH ON URGENT REQUIREMENT OF THE BUSINESS WHICH IS IN A CCORDANCE WITH COMMERCIAL EXPEDIENCY OF ASSESSEE'S BUSINESS W HICH WAS BEING CLOSED DURING THE YEAR AS THE REMAINING S TOCK OF CLOTH WAS BEING SOLD TO CLEAR THE OUTSTANDING OF TH E BUSINESS BY PAYING TO OUTSTANDING CREDITORS. I NOTICED THAT THE ASSESSEE WAS ENGAGED IN THE BUSINESS OF EXPORT OF G ARMENTS. IT WAS SUBMITTED THAT IN CASE OF URGENCY IN BUSINES S, THE ASSESSEE TOOK LOAN FROM HER HUSBAND EACH AMOUNTING BELOW RS. 20,000/-. THE A.O. DID NOT DOUBTED ABOUT THE GENUINENESS OF THE TRANSACTIONS AS THE ASSESSMENT O RDER WAS PASSED WITHOUT ANY ADVERSE INFERENCE AND THE RETURN ED INCOME WAS ACCEPTED WITHOUT ANY ADDITIONS OR DISALLOWANCES. FROM THE FACTS OF THE CASE, WE FIND THAT THE ASSESSEE TOOK SMALL AMOUNTS OF MONEY FROM TIME TO T IME AND REPAID BACK IN SMALL AMOUNTS WAS IN ACCORDANCE WITH COMMERCIAL EXPEDIENCY OF ASSESSEE'S BUSINESS AS THE DEMAND OF BUSINESS OF THE ASSESSEE WAS SUCH AT THAT POINT OF ITA NOS. 6528 & 6529/DEL/2013 7 TIME. THE BONA FIDE TRANSACTIONS OF THE ASSESSEE CA RRIED OUT IN ACCORDANCE WITH COMMERCIAL EXPEDIENCY AND BUSINESS NEED AMOUNTS TO REASONABLE CAUSE AND IN THE CASE OF REAS ONABLE CAUSE THE PENALTY ULS. 271D IS NOT LEVIABLE. IT IS FURTHER STRENGTHENED FROM THE FACT THAT AO HAS ACCEPTED TH E RETURNED INCOME AND HAS NOT DISPUTED THE FACT THAT THESE TRANSACTIONS ARE RECORDED IN BOOKS OF ALC'S. 7. FROM THE MATERIAL ON RECORD, THERE IS NOTHING T O INDICATE THAT THE AMOUNT RECEIVED AND REPAYMENT IS A LOAN OR UNAC COUNTED FOR. IT IS ENTERED IN THE ACCOUNTS DULY MAINTAINED BY BOTH. IN FACT, THE PURPOSE FOR WHICH THE SAID AMOUNT WAS REC EIVED IS ALSO CLEAR FROM THE MATERIAL ON RECORD AND THEREFOR E THERE IS NOTHING TO INDICATE THAT THIS AMOUNT IS PAID AS LOA N OR DEPOSIT. IN THE ABSENCE OF SUCH MATERIAL ON RECORD KEEPING I N MIND THE RELATIONSHIP BETWEEN THE PARTIES THE NATURE OF TRAN SACTION COUPLED WITH THE FACT THAT THE ASSESSEE WAS UNDERGO ING A FINANCIAL DIFFICULTY, IF. I DO NOT SEE ANY MERIT I N THIS APPEAL. 8. I THEREFORE, DELETE THE PENALTY OF RS. 27,01,60 0/- LEVIED BY THE AO U/S. 27LD OF THE ACT. 10. IN VIEW OF THE ABOVE, I AM OF THE VIEW THAT N O INTERFERENCE IS CALLED FOR IN THE WELL REASONED ORDER PASSED BY THE LD. CIT(A), B ECAUSE THE LD. CIT(A) HAS DECIDED THE ISSUE IN DISPUTE IN FAVOR OF THE ASSESS EE AFTER APPRECIATING THE EVIDENCE FILED BY THE ASSESSEE AS WELL AS VARIOUS D ECISIONS RENDERED BY THE HONBLE HIGH COURTS AND THE DECISIONS OF THE VARIO US ITAT BENCHES. I FURTHER FIND ITA NOS. 6528 & 6529/DEL/2013 8 THAT THERE IS NOTHING TO INDICATE THAT THE AMOUNT R ECEIVED AND REPAYMENT IS A LOAN OR UNACCOUNTED FOR. IT IS ENTERED IN THE ACCOU NTS DULY MAINTAINED BY BOTH. IN FACT, THE PURPOSE FOR WHICH THE SAID AMOUNT WAS REC EIVED IS ALSO CLEAR FROM THE MATERIAL ON RECORD AND THEREFORE, THERE IS NOTHING TO INDICATE THAT THIS AMOUNT IS PAID AS LOAN OR DEPOSIT. I FIND CONSIDERABLE COGENC Y IN THE ASSESSEES SUBMISSION THAT IN THE ABSENCE OF SUCH MATERIAL ON RECORD KEE PING IN MIND THE RELATIONSHIP BETWEEN THE PARTIES THE NATURE OF TRANSACTION COUP LED WITH THE FACT THAT THE ASSESSEE WAS UNDERGOING A FINANCIAL DIFFICULTY. I ALSO FIND THAT THE CASE LAW RELIED UPON BY THE LD. DR IS BASED ON DIFFERENT FA CTS I.E. THERE IS NO MATERIAL TO SHOW THE REAL EXIGENCY TO TAKE CASH LOAN. HOWEVER, IN THE CASE LAWS CITED BY THE LD. COUNSEL OF THE ASSESSEE THERE WAS DEFINITE SUFFICIENT CAUSE TO ESTABLISH THE REAL EXIGENCY OF TAKING THE CASH LOANS. I AL SO FIND THAT THE LD. CIT(A) HAS RIGHTLY OBSERVED THAT ASSESSEE HAS DEMONSTRATED THE FUNDS WERE ARRANGED IN CASH ON URGENT REQUIREMENT OF THE BUSINESS WHICH IS IN ACCORDANCE WITH COMMERCIAL EXPEDIENCY OF ASSESSEES BUSINESS WHICH WAS BEING CLOSED DURING THE YEAR AS THE REMAINING STOCK OF CLOTH WAS BEING SOLD TO CLEAR THE OUTSTANDING OF THE BUSINESS BY PAYING THE OUTSTANDING CREDITORS AND AS A RESULT, THE ASSESSEE HAS UNDERGONE A FINANCIAL CRISIS, HENCE, LD. CIT( A) HAS RIGHTLY DELETED THE PENALTY IN DISPUTE. IN VIEW OF ABOVE, I FIND NO I NFIRMITY IN THE IMPUGNED ORDER ITA NOS. 6528 & 6529/DEL/2013 9 PASSED BY THE LD. CIT(A), HENCE, I UPHOLD THE SAME BY DISMISSING THE APPEAL FILED BY THE REVENUE. 11. IN THE RESULT, BOTH THE APPEALS OF THE REVENU E STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16/11/2015. S SS SD DD D/ // /- -- - [ [[ [H.S. SIDHU H.S. SIDHU H.S. SIDHU H.S. SIDHU] ]] ] JUDICIAL JUDICIAL JUDICIAL JUDICIAL MEMBER MEMBER MEMBER MEMBER DATE 16/11/2015 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES