Sh. P.C. Minda, New Delhi V. Addl.CIT, New Delhi

ITA 6727/DEL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97724 (ITAT-DELHI)
• Duration Of Justice: 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 10-09-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 11-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR B R R KUMAR
• Assessee Lawyers: DR RAKESH GUPTA; SOMIL AGRAWAL ADVS
• Keywords: Reasonable cause
• Section: 68; 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER I.T.A .NO. - 6727 /DEL/201 4 (ASSESSMENT YEAR - 200 5 - 06 ) P.C.MINDA, A - 67/2, G.T.KARNAL ROAD, NEW DELHI - 110052. PAN - AADPM6421C ( APPELLANT) VS ADDL.CIT, RANGE - 20, NEW DELHI (RESPONDENT ) APPELLANT BY DR. RAKESH GUPTA & SH. SOMIL AGRAWAL, ADVS. RESPONDENT BY DR.B.R.R.KUMAR, SR.DR ORDER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE ASSAILING THE CORRECTNESS OF THE ORDER DATED 15.09.2014 OF CIT(A) - XXII, NEW DELHI PERTAINING TO 2005 - 06 ASSESSMENT YEAR ON VARIOUS GROUNDS. THE RELEVANT FACTS OF THE CASE ARE THAT PENALTY U/S 271E R.W.S 274 OF THE INCOME TAX ACT, 1961 WAS LEVIED UPON THE ASSESSEE WHEREIN ON FACTS THE ASSESSEE HAD BEEN FOUND IN ASSESSMENT PROCEEDINGS U/S 147/148 TO HAVE REPAID A LOAN OF RS. 6 LACS TO SH. HARISH BINDAL & TARUN BINDAL IN CASH. THE LEVY OF PENALTY WAS CHALL ENGED UNSUCCESSFULLY IN APPEAL BEFORE THE CIT(A) ON VARIOUS GROUNDS INCLUDING THE GROUNDS OF REASONABLE CAUSE. AGGRIEVED BY THIS, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. THE BACKGROUND OF THE CASE AS CANVASSED BEFORE THE AO IN THE PENALTY PROCEEDI NGS VIDE LETTER DATED 21.03.2013 IS REPRODUCED HEREUNDER: - .REPAYMENT OF LOANS IN CASH IS COVERED BY SECTION 269T OF INCOME TAX ACT. THE ASSESSEE IS VERY NEAR RELATIVE OF MR. HARISH BINDAL (BROTHER - IN - LAW) AND MR.TARUN BINDAL WHO IS SON OF MR. HARISH BINDAL. ALL REPAYMENT OF LOANS OF RS.13 LACS IS PAID AFTER WITHDRAWING THE FUNDS FROM CANARA BANK OF HIS FIRM JAY INDUSTRIES. HENCE, THE SOURCE OF REPAYMENT OF LOANS IS ALREADY PROVED BY DOCUMENTARY EVIDENCE. HENCE, SECTION 68 OF INCOME TAX ACT IS NOT C OVERED IN THIS CASE. THE ASSESSEE AGREED THAT ONLY SECTION 269T IS PARTLY COVERED IN THIS CASE AS THE NEAR DATE OF HEARING 10 .0 9 .2015 DATE OF PRONOUNCEMENT 10 . 1 0 .2015 I.T.A .NO. - 6727/ DEL/201 4 PAGE 2 OF 5 RELATIVE MR. HARISH BINDAL DEMANDED CASH AND HE HAS ACCEPTED THE RECEIPT OF CASH AGAINST THEIR LOAN AMOUNT . 2. ADDRESSING THE ABOVE LETTER REPRODUCED IN THE PENALTY ORDER, ATTENTION WAS INVITED TO PAPER BOOK PAGE NO.3. ON THE BASIS OF THE SAME, IT WAS SUBMITTED BY THE LD. AR THAT IN THE FACTS OF THE PRESENT CASE RE - OPENING WAS DONE ON THE BASIS OF TAX EVASION PETITION ALLEGEDLY FILED BY SH.B .D.GUPTA, SOME ANONYMOUS PERSON WHO INFACT WAS SH. HARISH BINDAL WHO IS THE NEAR RELATIVE OF THE ASSESSEE. THE SAID SUBMISSION IT WAS STATED WAS MADE BEFORE THE ACIT VIDE LETTER DATED 31.12.2012 AS IS PLACED AT PAPER BOOK PAGE - 3. FOR READY - REFERENCE, RELE VANT EXTRACT THEREFROM IS REPRODUCED HEREUNDER: - WE BRING TO YOUR KIND NOTICE THAT REPAYMENT OF LOANS IN CASH IS COVERED BY SECTION 269T OF THE INCOME TAX ACT. THE ASSESSEE IS VERY NEAR RELATIVE OF MR. HARISH BINDAL (SON IN LAW) AND MR. TARUN BINDAL WHO IS SON OF MR. HARISH BINDAL. ALL REPAYMENT OF LOANS OF RS. 6 LACS IS PAID AFTER WITHDRAWING THE FUNDS FROM CANARA BANK OF HIS FIRM JAY INDUSTRIES. HENCE SOURCE OF REPAYMENT OF LOANS IS ALREADY PROVED BY DOCUMENTARY EVIDENCE. HENCE SECTION 68 OF INCOME T AX ACT IS NOT COVERED IN THIS CASE. THE ASSESSEE AGREED THAT ONLY SECTION 269 T IS PARTLY COVERED IN THIS CASE AS THE NEAR RELATION MR. HARISH BINDAL DEMANDED CASH AND HE HAS ACCEPTED THE RECEIPT OF CASH AGAINST THEIR LOAN ACCOUNT. SECTION 269T WAS INTROD UCED WITH A VIEW TO COUNTER THE EVASION OF TAX. IN THE INSTANT CASH THE SOURCE OF REPAYMENT OF LOAN IS PROVED WITH ALL DOCUMENTARY EVIDENCE. THE ALLEGATION MADE IN THE TAX EVASION PETITION RECEIVED FROM SHRI.B.D.GUPTA MAY BE DROPPED . WE REQUEST YOUR HON OUR TO DROP THIS PROCEEDINGS U/S 147/148 OF INCOME TAX ACT BECAUSE THIS IS THE COMPLAINT FROM AN ANONYMOUS PERSON AND WHOSE IDENTITY IS NOT VERIFY BY THE DEPARTMENT. THIS COMPLAIN IS BASICALLY FROM MR.HARISH BINDAL WHO IS NEAR RELATIVE TO THE ASSESSEE AND THEIR DISPUTE FOR SO MANY ISSUES IS STILL PENDING IN THE HIGH COURT. THIS COMPLAINT IS MADE BY HARISH BINDAL BY USING THE NAME OF B.D.GUPTA JUST TO HARASS THE ASSESSEE. (EMPHASIS PROVIDED) 3. INVITING ATTENTION TO THE SUBMISSIONS DATED 28.08.2014 ADVA NCED BEFORE THE CIT(A) COPY OF WHICH IS PLACED AT PAGES 17 - 42 ALONGWITH ANNEXURES IT WAS SUBMITTED THAT THESE SUBMISSIONS WOULD ADDRESS REASONABLE CAUSE AND IS RELIED UPON. FOR READY - REFERENCE, RELEVANT EXTRACT FROM THE IMPUGNED ORDER IS REPRODUCE D HEREUNDER: - AS REQUIRED BY YOUR HONOUR, I AM ENCLOSING THE FOLLOWING DOCUMENTS FOR REASONABLE CAUSE AS PROVIDED U/S 273B OF I.T.ACT: - 1. COPY OF BANK STATEMENT OF JAY INDUSTRIES FROM WHERE THE CASH WAS WITHDRAWN AND PAID TO MR. HARISH BINDAL AND MR. TARUN BINDAL. I.T.A .NO. - 6727/ DEL/201 4 PAGE 3 OF 5 2. COPY OF DRAWING A/C OF THE ASSESSEE WHERE ACCOUNT OF THE ASSESSEE WAS DEBITED ON THE DAY OF CASH PAYMENTS TO HARISH BINDAL AND TARUN BINDAL IS SON OF MR. HARISH BINDAL. 3. MR. HARISH BINDAL IS A SON - IN - LAW OF THE ASSESSEE WHO INSISTED FOR CASH PAYMENT DUE TO LONG DISPUTE IN FAMILY (COPY OF DISPUTES ARE ENCLOSED). 4. IT WAS HIS SUBMISSION THAT ON ACCOUNT OF THE PROBLEMS CREATED BY SH. HARISH BINDAL WHO WAS THE SON - IN - LAW OF THE ASSESSEE, THE SAID AMOUNT NECESSARILY HAD TO BE PAID IN CASH SO AS TO R ETURN THE LOAN TAKEN FROM HIM. IT WAS SUBMITTED THAT SH. HARISH BINDAL REFUSED TO TAKE PAYMENTS BY CHEQUE. IN VIEW OF THE DELICACY OF THE RELATIONSHIP WITH THE SAID RELATIVE THE INSISTENCE OF PAYMENT IN CASH COULD NOT BE IGNORED AS THEY RESULTED IN DIS PUTES BETWEEN THE HUSBAND AND WIFE I.E SH. HARISH BINDAL AND THE DAUGHTER OF THE ASSESSEE. IN SUPPORT OF THE SAID CLAIM, ATTENTION WAS INVITED TO COPY OF THE COMPLAINT DATED 04.05.2005 FILED IN THE POLICE STATION BEFORE THE SHO, SHALIMAAR BAGH, U/S 498A/ 406 DIARY NO.7946 DATED 05.05.2005 (COPY PLACED AT PAGES 18 TO 21 OF THE PAPER BOOK). READING THEREFROM IT WAS SUBMITTED THAT SMT. SUNITA BINDAL HAD SOUGHT POLICE PROTECTION FOR HER LIFE AND PROPERTY REFERRING TO INCIDENTS OF PHYSICAL, INTIMIDATION AND MAN - HANDLING BY HER HUSBAND AND SON ON DIFFERENT DATES WHERE ON SOME OCCASION PRESSURE IS PUT ON HER TO RELINQUISH HER INTEREST AS AN OWNER OF AE - 167, SHALIMAR BAGH IN THEIR FAVOUR AND R E F E R E N C E I S A L S O M A D E TO INSTANCE OF BREAKING OPEN HER ALMIRAH AND TAKING AWAY HER JEWELLER Y AND CASH. REFERENCE IS ALSO MADE TO A BEATING TO WHICH S H E WAS SUBJECTED TO WHEREIN HER IMMEDIATE NEIGHBOUR DR. ANJANI GOYAL, RESIDENT OF AE - 188, SHALIMAAR BAGH CAME TO HER RESCUE A N D CALLED HER FATHER, SH.P.C.MINDA AND GOT HER ADMITTED FOR TREATMENT AT SUNDERL AL JAIN HOSPITAL. IN THE SAID BACK GROUND, LD.AR PLEADED THAT THE HUSBAND AND WIFE WERE HAVING CONSTANT FAMILY PROBLEMS AND IN ORDER TO PACIFY THE SAME AND MEET THE UNDUE DEMANDS OF THE SON - IN - LAW THE FATHER HAD AGREED TO REPAY THE LOAN IN CASH AS INSIST ED INSTEAD OF BY CHEQUE. THE SON - IN - LAW WHO WAS AN ADVOCATE BY PROFESSION IT WAS STATED WOULD ALONGWITH ONE OF HIS SONS WOULD HARASS THE DAUGHTER OF THE ASSESSEE AND IN THE CIRCUMSTANCES REASONABLE CAUSE WAS MAINTAINABLE. IN THE SAID BACKGROUND IT WAS HIS SUBMISSION THAT THE DECISION BY THE CIT(A) HOLDING THAT THE REFERENCE TO THE POLICE COMPLAINS IN THE CONTEXT OF MARITAL PROBLEMS AND THE FIRS ARE IN THE CONTEXT OF THE BOUNCING OF SOME CHEQUES IN 2005 IS NOT RELEVANT IS NOT I.T.A .NO. - 6727/ DEL/201 4 PAGE 4 OF 5 APPRECIATING THE REALITY OF THE FATHER. THUS, THE ASSESSEE S EXPLANATION THAT THE PAYMENT HAD BEEN MADE IN CASH ON ACCOUNT OF THE PECULIAR UNFORTUNATE DELICATE SITUATION IN WHICH THE FATHER WAS TRYING TO SETTLE THE MARITAL DISPUTE S OF HIS DAUGHTER IT WAS SUBMITTED CAN CONSTITUTE A RE ASONABLE CAUSE. ACCORDINGLY IT WAS HIS PRAYER THAT THE PENALTY MAY BE QUASHED. IN THE ALTERNATE IT WAS SUBMITTED THE ASSESSEE HAS ALSO RAISED ADDITIONAL GROUNDS, CANVASSING THAT THE PENALTY IS TIME - BARED AND DESERVES TO BE QUASHED. 5. THE LD. SR.DR, SH.B. R.R.KUMAR RELYING UPON THE IMPUGNED ORDER SUBMITTED THAT IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE COULD HAVE REPAID THE LOAN BY CHEQUE AS THAT WOULD HAVE SAVED THE ASSESSEE FROM A FUTURE ALLEGATION THAT THE LOAN WAS NEVER REPAID. THUS, THE EXPLANATI ON OFFERED IT WAS HIS SUBMISSION DESERVES TO BE REJECTED. 6. HAVING HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. CONSIDERING THE SAME, I FIND THAT THE FACT THE ASSESSEE S DAUGHTER WAS MARRIED TO SH. HARISH BINDAL IS NOT DISPU TED. THE FACT THAT SH. HARISH BINDAL AND SMT. SUNITA BINDAL HAD A VIOLENT ACRIMONIOUS RELATIONSHIP IS AN EVIDENCE ON RECORD WHICH HAS NOT BEEN DISPUTED BY THE REVENUE. THE REFERENCE TO THE INCIDENTS SET OUT IN THE POLICE COMPLAINT MADE BY SMT. SUNITA BIN DAL READ OUT BY THE LD. AR CITING INSTANCES OF MENTAL AND PHYSICAL HARASSMENT NECESSITATING SEEKING POLICE PROTECTION AND INTERVENTION HAS NOT BEEN REBUTTED BY THE REVENUE. THE CORRECTNESS OF THE SAME HAS NOT BEEN ASSAILED. IN THESE PECULIAR FACTS AND CI RCUMSTANCES IN THE FACE OF THE TURMOIL IN THE FAMILY RELATIONS OF HIS DAUGHTER, THE ACTION OF THE FATHER IN MEETING THE UNDUE REQUIREMENTS OF THE SON - IN - LAW IN THE HOPE OF SAVING THE MARITAL HARMONY OF HIS DAUGHTER TO MY MIND CAN CONSTITUTE A REASONABLE CAUSE. THE SOURCE OF CASH PAYMENT ON FACTS HAS BEEN EXPLAINED BY THE ASSESSEE AND IS NOT DISPUTED. IN THESE PECULIAR FACTS IN THE ABSENCE OF ANY REBUTTAL OR THE EVIDENCES RELIED UPON, I AM OF THE VIEW THAT IN TERMS OF PROVISIONS OF SECTION 273B OF THE A CT, THE ASSESSEE HAS SUCCESSFULLY DEMONSTRATED THE EXISTENCE O F REASONABLE CAUSE AS ENVISAGED BY THE SAID SECTION. THUS ACCEPTING THE EXPLANATION THE PENALTY IS DIRECTED TO BE QUASHED. I.T.A .NO. - 6727/ DEL/201 4 PAGE 5 OF 5 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 1 0 T H OF NOVEMBER, 2015. (DIVA SINGH) JUDICIAL MEMBER DATED: 1 0 /11 /2015 * AMIT KUMAR * COPY FORWARDED TO: 1. APPELLANT 2. RESPON DENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI