Dy. Commissioner of Income Tax, Lucknow V. M/s Halwasiya Properties Pvt. Ltd., Lucknow

ITA 707/LKW/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 5170 (ITAT-LUCKNOW)
• Duration Of Justice: 2 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2008-2009
• Appeal Filed On: 18-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ALOK MITRA
• Assessee Lawyers: J J MEHROTRA
• Keywords: Reasonable cause
• Section: 273B

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH A, LUCKNOW BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER ITA NO.707/LKW/2013 A.Y.:2008 - 09 DY.C.I.T., RANGE - 3, LUCKNOW. VS. M/S HALWASIYA PROPERTIES PVT. LTD. 1, HALWASIYA COURT, HAZARATGANJ, LUCKNOW. PAN:AAACH9708D (APPELLANT) (RESPONDENT) C.O.NO.52/LKW/2013 (IN ITA NO.707/LKW/2013) A.Y.:2008 - 09 M/S HALWASIYA PROPERTIES PVT. LTD. 1, HALWASIYA COURT, HAZARATGANJ, LUCKNOW. PAN:AAACH9708D VS. DY.C.I.T., RANGE - 3, LUCKNOW. (OBJECTOR) (RESPONDENT) REVENUE BY SHRI ALOK MITRA, D.R. ASSESSEE BY SHRI J. J. MEHROTRA, C.A. DATE OF HEARING 26/11/2013 DATE OF PRONOUNCEMENT 2 7 /12/2013 O R D E R PER A. K. GARODIA, A.M. THE APPEAL IS FILED BY THE REVENUE AND THE CROSS OBJECTION IS FILED BY THE ASSESSEE, WHICH ARE DIRECTED AGAINST THE ORDER OF CIT ( A) - I, LUCKNOW DATED 08/07/2013 FOR ASSESSMENT YEAR 2008 - 2009. 2 2. THE GROUNDS RAISED BY REVENUE IN ITS APPEAL ARE AS UNDER: 1. THE LD. CIT ( A) HAS ERRED IN LAW AND ON FACTS OF THE CASE IN CANCELING THE PENALTY U/S 271E OF THE IT. ACT, 1961 IMPOSED BY THE A.O. AS THE FINDINGS GIVEN BY CIT ( A) DO NOT BRING OUT THE EXISTENCE OF ANY REASONABLE CAUSE FOR VIOLATION OF PROVISION OF SECTION 269T OF THE I.T. ACT, 1961. 2. APPELLANT CRAVES LEAVE TO ADD OR AMEND THE GROUND OF APPEAL, AS STATED ABOVE AS AND WHEN NEED OF DONG SO ARISES WITH THE PRIOR PERMISSION OF THE HON'BLE BENCH. 3. THE GROUNDS RAISED BY THE ASSESSEE IN ITS CROSS OBJECTION ARE AS UNDER: 1. THAT THE LD. CIT(A) IS FULLY JUSTIFIED IN CANCELLING THE PENALTY LEVIED U/S 271E OF THE INCOME TAX ACT AS THERE WAS A REASONABLE CAUSE WITHIN THE MEANING OF SECTION 273B OF THE INCOME TAX ACT, 1961. 2. THAT THE LD. CIT ( A) IS FULLY JUSTIFIED IN CANCELLING THE PENALTY U/S 271E OF THE INCOME TAX ACT AND IN HOLDING THAT THE BREACH IS ONLY OF TECHNICAL OR VENIAL NATURE AND THEREFORE NO PENALTY IS LEVIABLE FOR THE SAME. 3. THAT THE GROUND OF APPEAL NO. 1 TAKEN BY THE REVENUE IS NOT ARISING OUT OF THE ORDER OF THE LD. CIT ( A) AND, THEREFORE, THE SAME IS INFRUCTUOUS AND DESERVES TO BE DISMISSED. 4. THAT THE RESPONDENT CRAVES LEAVES TO ADD, ALTER, AMEND OR WITHDRAW ANY OR ALL THE GROUNDS OF CROSS OBJECTIONS ON OR BEFORE THE DATE OF HEARING. 3 4. THE BRIEF FACTS, TILL THE STAGE OF IMPOSITION OF PENALTY, ARE NOTED BY LEARNED CIT ( A) IN PARA 4 OF HIS ORDER AND THE SAME IS REPRODUCED BELOW FOR THE SAKE OF READY REFERENCE: 4. THE FACTS OF THE CASE AS CULLED OUT FROM THE SUBMISSIONS AND THE REPORT ARE THAT SH. AMBRISH TONDON WHO IS PROPRIETOR OF M/S TECHNOCRAFT INTERNATIONAL HAD GIVEN INTEREST FREE LOAN OF RS. 50 LACS TO SH. S. S. HALWASIYA BY CHEQUE NO. 001476 ON 01.112007 FROM HIS CITI BANK ACCOUNT IN HIS PERSONAL CAPACITY. THIS LOAN WAS REPAID TO HIM BY THE APPELLANT AT THE BEHEST OF SH. SUDHIR S. HALWASIYA ON 03.12.2007. FOR THE PURPOSE, AN ACCOUNT PAYEE PAY ORDER OF RS. 50 LACS WAS ISSUED IN FAVOUR OF SH. AMBRISH TONDON FROM THE ACCOUNT OF THE APPELLANT IN ORIENTAL BANK OF COMMERCE. THIS PAY ORDER WAS CREDITED IN THE BANK OF INDIA ACCOUNT OF SH. AMBRISH TONDON ON 05.12.2007. 5. THIS PENALTY WAS DELETED BY LEARNED CIT(A) BY MAKING FOLLOWING OBSERVATIONS: ' IN VIEW OF THE DISCUSSIONS MADE ABOVE, 1 AGREE WITH THE APPELLANT THAT REPAYMENT OF LOAN TO SH. SUDHIR S. HALWASIYA BY DRAWING AN ACCOUNT PAYEE PAY ORDER NOT IN HIS FAVOUR BUT IN THE FAVOUR OF SH. AMBRISH TONDON AT THE EXPRESS INSTRUCTIONS OF SH. SUDHIR S. HALWASIYA WAS A BONAFLDE TRANSACTION AND THERE IS NO FINDING RECORDED IN THE PENALTY ORDER THAT IT WAS MADE WITH A VIEW TO EVADE TAX. THE BREACH WAS OF TECHNICAL OR VENIAL NATURE WHICH DOES NOT CALL FOR LEVY OF HARSH P ENALTY OF RS. 50 LACS. IT IS, THEREFORE, HELD THAT THERE WAS REASONABLE CAUSE FOR VENIAL AND TECHNICAL BREACH IN COMPLYING WITH THE PROVISIONS OF SECTION 269T OF THE ACT HENCE, PENALTY U/S 271E IS NOT LEVIABLE. PENALTY ORDER, DATED 29.09.2011 U/S 271E OF T HE ACT IMPOSING A PENALTY OF RS. 50 LACS IS THEREFORE CANCELLED. 6. LEARNED D.R. OF THE REVENUE SUPPORTED THE PENALTY ORDER WHEREAS LEARNED A.R. OF THE ASSESSEE SUPPORTED THE ORDER OF LEARNED CIT(A). 4 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE PENALTY HAS BEEN DELETED BY LEARNED CIT(A) ON THE BASIS THAT THERE WAS REASONABLE CAUSE AND SINCE THE PROVISIONS OF SECTION 273B ARE APPLICABLE IN RESPECT OF PENALT Y U/S 271E ALSO, HE DELETED THE PENALTY. LEARNED CIT(A) HAS ALSO OBSERVED THAT THE ACCOUNT OF SHRI SUDHIR S. HALWASIYA WITH THE ASSESSEE COMPANY IS IN THE NATURE OF CURRENT ACCOUNT ON WHICH , NO INTEREST IS PAYABLE. ON THIS ASPECT, WE FIND THAT WHETHER INTEREST IS PAYABLE OR NOT IS NOT RELEVANT TO DECIDE AS TO WHETHER A PARTICULAR ACCOUNT IS DEPOSIT / LOAN ACCOUNT OR NOT. BUT STILL WE FIND THAT IN THE FACTS OF THE PRESENT CASE, THE ACCOUNT OF SHR I SUDHIR S. HALWASIYA WITH THE ASSESSEE COMPANY IS NOT A LOAN ACCOUNT OR DEPOSIT ACCOUNT. WE FIND THAT THE COPY OF THIS ACCOUNT IS AVAILABLE AT PAGES 14 TO 21 OF THE PAPER BOOK. THE OPENING BALANCE IN THIS ACCOUNT IS CREDIT BALANCE OF RS. 7,83,055.86 AND THEREAFTER , THERE ARE VARIOUS DEBITS AND CREDITS IN THIS ACCOUNT IN EVERY MONTH. THE DEBITS ARE IN THE NATURE OF PAYMENT OF HOUSING LOAN EMI AND PAYMENT OF MOBILE PHONE BILL ETC. SIMILARLY, THE CREDITS ARE ALSO IN RESPECT OF EMI OF CAR LOAN PAID BY SHRI SUDHIR S. HALWASIYA ON BEHALF OF THE ASSESSEE COMPANY. THERE ARE SOME RECEIPTS BY WAY OF CHEQUE ALSO AND SIMILARLY THERE ARE SOME PAYMENTS BY WAY OF CHEQUE S . WE ALSO FIND THAT THE IMPUGNED PAYMENT OF RS.50 LAKHS BY WAY OF DEMAND DRAFT FAVOURING SHRI AMBR ISH TANDON WAS PAID ON 3 RD DECEMBER, 2007. ON THIS DATE, THE NET CREDIT BALANCE IN THE ACCOUNT OF SHRI SUDHIR S. HALWASIYA WAS ONLY RS.10,16,671.86 AND THEREFORE, THIS IMPUGNED PAYMENT OF RS.50 LAKHS ON THIS DATE BY WAY OF DEMAND DRAFT CANNOT BE SAID TO B E TOWARDS REPAYMENT OF LOAN OR DEPOSIT WHICH IS NOT EXISTING ON THIS DATE. THE TOTAL CREDIT BALANCE IS RS.10.16 LAKHS AND THIS PAYMENT OF RS.50 LAKHS ON THIS 5 DATE CANNOT BE SAID TO BE PAYMENT /REPAYMENT OF LOAN OR DEPOSIT WHICH IS NOT EXISTING ON THIS DAT E. THEREAFTER ALSO , THERE ARE SEVERAL RECEIPTS AND PAYMENT EVERY MONTH AND IN ADDITION TO RECEIPT AND PAYMENT BY WAY OF CHEQUE , THERE ARE DEBITS AND CREDITS TOWARDS EMI AND PAYMENT OF MOBILE BILL ETC. UNDER THESE FACTS, WE ARE OF THE CONSIDERED OPINION T HAT THIS PAYMENT OF RS.50 LAKHS BY WAY OF DEMAND DRAFT IN FAVOUR SHRI AMBRISH TANDON DOES NOT ATTRACT PENALTY IMPOSED BY THE ASSESSING OFFICER U/S 271E OF THE ACT. WE THEREFORE, DECLINE TO INTERFERE IN THE ORDER OF CIT(A) ON THIS ISSUE. 8. IN THE RESULT, THE APPEAL OF THE REVENUE AND THE CROSS OBJECTION OF THE ASSESSEE ARE DISMISSED. (ORDER WAS PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED ON THE CAPTION PAGE) SD/. SD/. (SU NIL KUMAR YADAV) ( A. K. GARODIA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 2 7 T H DECEMBER, 2013. *C.L.SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. DR, ITAT, LUCKNOW