Sh. Deepak Minda, New Delhi V. Addl.CIT, New Delhi

ITA 6728/DEL/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 6423 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-03-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 21-12-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 11-12-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P DANKANUNJNA SR LD
• Keywords: Reasonable cause
• Section: 273B; 68

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SMC-1 NEW DELHI BEFORE SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND SH. SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER ITA NO. 6728/DEL/2014 AY: 20 05-06 DEEPAK MINDA, VS ADDITIONAL CIT, A-67/2, G.T. KARNAL ROAD, RANGE 20, DELHI-110052 NEW DELHI. (PAN: AADPM6422B) (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAKESH GUPTA, ADV. SHRI SOMIL AGGARWAL, ADV. RESPONDENT BY : SHRI P. DANKANUNJNA, SR. LD. DR DATE OF HEARING: 21.12.2015 DATE OF PRONOUNCEMENT : 14.03.2016 ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER THE PRESENT APPEAL HAS BEEN FILED BY THE ASSESSEE A SSAILING THE CORRECTNESS OF THE ORDER DATED 15.09.2014 OF CI T(A)-XXII, NEW DELHI PERTAINING TO 2005-06 ASSESSMENT YEAR ON VARI OUS 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 ASS ESSEE WHEREIN ON FACTS THE ASSESSEE HAD BEEN FOUND IN ASS ESSMENT PROCEEDINGS U/S 147/148 TO HAVE REPAID A LOAN OF RS . 13 LACS TO SH. HARISH BINDAL & TARUN BINDAL IN CASH. THE LEVY OF PENALTY WAS CHALLENGED UNSUCCESSFULLY IN APPEAL BEFORE THE CIT (A) ON I.T.A. 6728/DEL/2014 ASSESSMENT YEAR: 2005-06 2 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 PROCEEDINGS VIDE LETTER DATED 21.03.2013 IS REPRODUCED HEREUNDER:- '.......REPAYMENT OF LOANS IN CASH IS COVERED BY SE CTION 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. AL L 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 COVERED IN THIS CASE. THE ASSESSEE AGREED THAT ONLY SECTION 26 9T IS PARTLY COVERED IN THIS CASE AS THE NEAR 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 T HE BASIS OF THE SAME, IT WAS SUBMITTED BY THE LD. AR THAT IN TH E FACTS OF THE PRESENT CASE RE-OPENING WAS DONE ON THE BASIS OF TA X EVASION PETITION ALLEGEDLY FILED BY SH. B.D.GUPTA, SOME ANO NYMOUS PERSON, WHO IN FACT WAS SH. HARISH BINDAL, WHO IS T HE NEAR RELATIVE OF THE ASSESSEE. THE SAID SUBMISSION, IT W AS STATED, WAS MADE BEFORE THE ACIT VIDE LETTER DATED 31.12.2012 A ND IS PLACED I.T.A. 6728/DEL/2014 ASSESSMENT YEAR: 2005-06 3 AT PAPER BOOK PAGE-3. FOR READY-REFERENCE, RELEVANT EXTRACT THERE FROM IS REPRODUCED HEREUNDER:- 'WE BRING TO YOUR KIND NOTICE THAT REPAYMENT OF LOANS IN CASH IS COVERED BY SECTION 269T OF THE INC OME 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. 13 LACS IS PAID AFTER WITHDRAWING THE FUNDS FRO M CANARA BANK OF HIS FIRM JAY INDUSTRIES. HENCE SOURC E OF REPAYMENT OF LOANS IS ALREADY PROVED BY DOCUMENTARY EVIDENCE. HENCE SECTION 68 OF INCOME TA X ACT IS NOT COVERED IN THIS CASE. THE ASSESSEE AGREE D THAT ONLY SECTION 269 T IS PARTLY COVERED IN THIS C ASE AS THE NEAR RELATION MR. HARISH BINDAL DEMANDED CASH AND HE HAS ACCEPTED THE RECEIPT OF CASH AGAINST THE IR LOAN ACCOUNT. SECTION 269T WAS INTRODUCED WITH A VIEW TO COUNT ER 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 DROPPE D. WE REQUEST YOUR HONOUR 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 COMP LAIN IS BASICALLY FROM MR.HARISH BINDAL WHO IS NEAR RELA TIVE TO THE ASSESSEE AND THEIR DISPUTE FOR SO MANY ISSUE S IS STILL PENDING IN THE HIGH COURT. THIS COMPLAINT IS MADE BY HARISH BINDAL BY USING THE NAME OF B.D.GUPTA JUS T TO HARASS THE ASSESSEE.' 3. INVITING ATTENTION TO THE SUBMISSIONS DATED 28.0 8.2014 ADVANCED BEFORE THE LD. CIT (A), COPY OF WHICH IS P LACED AT PAGES 17-42 ALONG WITH ANNEXURES, IT WAS SUBMITTED THAT T HESE I.T.A. 6728/DEL/2014 ASSESSMENT YEAR: 2005-06 4 SUBMISSIONS WOULD ADDRESS REASONABLE CAUSE AND IS R ELIED UPON. FOR READY-REFERENCE, RELEVANT EXTRACT FROM THE IMPU GNED ORDER IS REPRODUCED HEREUNDER:- 'AS REQUIRED BY YOUR HONOUR, I AM ENCLOSING THE FOLLOWING DOCUMENTS FOR REASONABLE CAUSE AS PROVIDE D 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. 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 BROTHER-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 P ROBLEMS CREATED BY SH. HARISH BINDAL, THE SAID AMOUNT NECES SARILY HAD TO BE PAID IN CASH SO AS TO RETURN THE LOAN TAKEN FROM HIM. IT WAS SUBMITTED THAT SH. HARISH BINDAL REFUSED TO TAKE PA YMENTS BY CHEQUE. IN VIEW OF THE DELICACY OF THE RELATIONSHIP WITH THE SAID RELATIVE THE INSISTENCE OF PAYMENT IN CASH COULD NO T BE IGNORED. IN SUPPORT OF THE SAID CLAIM, ATTENTION WAS INVITED TO COPY OF THE COMPLAINT DATED 04.05.2005 FILED IN THE POLICE STAT ION BEFORE THE I.T.A. 6728/DEL/2014 ASSESSMENT YEAR: 2005-06 5 SHO, SHALIMAR BAGH, U/S 498A/406 DIARY NO.7946 DATE D 05.05.2005 (COPY PLACED AT PAGES 18 TO 21 OF THE PA PER BOOK). LD.AR PLEADED THAT IN ORDER TO BUY PEACE THE ASSESS EE HAD AGREED TO REPAY THE LOAN IN CASH AS INSISTED INSTEAD OF BY CHEQUE. IT WAS SUBMITTED THAT THE ASSESSEE'S EXPLANATION THAT THE PAYMENT HAD BEEN MADE IN CASH ON ACCOUNT OF THE PECULIAR UNFORT UNATE DELICATE SITUATION CAN CONSTITUTE A REASONABLE CAUS E. ACCORDINGLY IT WAS HIS PRAYER THAT THE PENALTY MAY BE QUASHED. IN THE ALTERNATE IT WAS SUBMITTED THE ASSESSEE HAS ALSO RA ISED ADDITIONAL GROUNDS, CANVASSING THAT THE PENALTY IS TIME-BARRED AND DESERVES TO BE QUASHED. 5. THE LD. DR, RELYING UPON THE IMPUGNED ORDER SU BMITTED THAT IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE COUL D HAVE REPAID THE LOAN BY CHEQUE AS THAT WOULD HAVE SAVED THE ASS ESSEE FROM A FUTURE ALLEGATION THAT THE LOAN WAS NEVER REPAID. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE MATERIAL AVAILABLE ON RECORD. CONSIDERING THE SAME, WE FIND THAT THE FACT THAT SH. HARISH BINDAL AND SMT. SUNITA BIN DAL HAD A VIOLENT ACRIMONIOUS RELATIONSHIP IS EVIDENCE ON REC ORD WHICH HAS NOT BEEN DISPUTED BY THE REVENUE. THE REFERENCE TO THE INCIDENTS I.T.A. 6728/DEL/2014 ASSESSMENT YEAR: 2005-06 6 SET OUT IN THE POLICE COMPLAINT MADE BY SMT. SUNITA BINDAL READ OUT BY THE LD. AR CITING INSTANCES OF MENTAL AND PH YSICAL HARASSMENT NECESSITATING SEEKING POLICE PROTECTION AND INTERVENTION HAS NOT BEEN REBUTTED BY THE REVENUE. THE CORRECTNESS OF THE SAME HAS NOT BEEN ASSAILED. IN T HESE PECULIAR FACTS AND CIRCUMSTANCES IN THE FACE OF THE TURMOIL IN THE FAMILY CAN CONSTITUTE A REASONABLE CAUSE. THE SOURCE OF CA SH PAYMENT ON FACTS HAS BEEN EXPLAINED BY THE ASSESSEE AND IS NOT DISPUTED. IN THESE PECULIAR FACTS IN THE ABSENCE OF ANY REBUT TAL OR THE EVIDENCES RELIED UPON, WE ARE OF THE VIEW THAT IN T ERMS OF PROVISIONS OF SECTION 273B OF THE ACT, THE ASSESSEE HAS SUCCESSFULLY DEMONSTRATED THE EXISTENCE OF A REASON ABLE CAUSE AS ENVISAGED BY THE SAID SECTION. THUS ACCEPTING THE E XPLANATION THE PENALTY IS DIRECTED TO BE QUASHED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14TH MARCH, 2 016. SD/- SD/- (J. SUDHAKAR REDDY) (SUDHANSHU SRIVASTAVA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: THE 14TH MARCH, 2016 GS I.T.A. 6728/DEL/2014 ASSESSMENT YEAR: 2005-06 7 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR TRUE COPY BY ORDER ASSISTANT REGISTRAR I.T.A. 6728/DEL/2014 ASSESSMENT YEAR: 2005-06 8