NARAYANJI GAJAKWALE PVT. LTD., Jaipur V. JCIT, Jaipur

ITA 813/JPR/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5625 (ITAT-JAIPUR)
• Duration Of Justice: 4 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: misc
• Appeal Filed On: 12-09-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: POONAM RAI; DCIT
• Keywords: Reasonable cause; Condonation of delay
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 271D; 264; 13

Judgement Text

- VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 813 & 1005/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08 & 2010-11 M/S. NARAYANJI GAJAKWALE (P) LTD. 855, AAKRON KA RASTA, KISHANPOLE BAZAR, JAIPUR CUKE VS. THE JCIT CENTRAL RANGE JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AABCN 7259 A VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT JKTLO DH VKSJ LS@ REVENUE BY: SMT. POONAM RAI, DCIT - DR FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI S.K. GOGRA, CA AND SHRI S.S. GOGRA, ADVOCATE LQUOKBZ DH RKJH[K@ DATE OF HEARING : 12/01/2017 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 16/01/2017 VKNS'K@ ORDER PER BHAGCHAND, AM BOTH THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAINST COMMON ORDER OF THE LD. CIT(A)- 4, JAIPUR DATED 03-06-20 16 FOR THE ASSESSMENT YEARS 2007-08 AND 2010-11 RESPECTIVELY REGARDING IM POSING THE PENALTY OF RS. 68,000 & RS. 60,000/- U/S 271D OF THE ACT RE SPECTIVELY. ITA NO. 813/JP/2016 M/S. NARYANJI GAJAKWALE (P) LTD. VS. JCIT, CENTRAL RANGE, JAIPUR 2 2.1 DURING THE COURSE OF HEARING, LD. AR OF THE ASS ESSEE PRAYED FOR CONDONATION OF DELAY IN ASSESSEES ITA NO. 1005/JP/ 2016 FOR THE ASSESSMENT YEAR 2010-11 AS UNDER:- 1. THAT THE LD. CIT(A) JAIPUR DISMISSED THE APPEALS FOR THE ASSESSMENT YEARS 2007-08 AD 2010-11 VIDE HIS ORDER DATED 3-06-2016. THE APPELLANT UNDER THE BONA FIDE IMPRESSION SUBMITTED SINGLE APPEAL BEFORE THE HON'B LE ITAT AGAINST THE ORDER OF THE CIT WHICH WAS PASSED BY H IM AS SINGLE ORDER. THE APPELLANT IN FORM NO. 36 IN COLUM N NO. 3 & 3B MENTIONED THE REFERENCE OF APPEAL FOR BOTH THE Y EARS. SUBSEQUENTLY, IT WAS REALIZED BY THE APPELLANT THAT THE TWO APPEALS SHOULD HAVE BEEN FILED BEFORE THE HON'BLE ITAT IN RESPECT OF ABOVE BOTH THE YEARS. VIDE APPLICATION DATED 11- 11-2016 THE APPELLANT REQUESTED TO THE HON'BLE ITA T TO TREAT THE APPEAL FILED ON 12-09-2016 FOR THE A.Y. 2007-08 . SINCE THE MISTAKE COMMITTED BY THE NOTICED VOLUNTARILY, T HEREFORE, THE SEPARATE APPEAL IN RESPECT OF THE ASSESSMENT Y EAR 2010- 11 IS BEING SUBMITTED. THE DELAY OF 63 DELAYS IN FI LING OF THE APPEAL MAY PLEASE BE CONDONED. 2. THAT THE DELAY MAY PLEASE BE CONDONED KEEPING IN VIEW OF INTEREST OF JUSTICE AND IN FAVOUR OF THE PO OR APPLICANT. 3. THAT THE APPEAL FEE OF RS. 500/- FOR A.Y. 2010-1 1 HAS BEEN DEPOSITED ON 8-1-2016 AND COPY OF THE CHALLAN IS ENCLOSED WITH MEMO OF APPEAL. 4. THAT AN AFFIDAVIT IN SUPPORT OF THE CONDONATION APPLICATION IS SUBMITTED HEREWITH. IT IS THEREFORE, HUMBLY PRAYED THAT THE DELAY OCCUR RED DUE TO BONAFIDE AND REASONABLE CAUSE WHICH MAY KINDLY BE CONDONED FOR IMPARTING JUSTICE TO THE ASSESSEE. ITA NO. 813/JP/2016 M/S. NARYANJI GAJAKWALE (P) LTD. VS. JCIT, CENTRAL RANGE, JAIPUR 3 2.2 THE LD. DR OBJECTED TO THE CONDONATION APPLICA TION OF THE ASSESSEE FOR LATE FILING OF THE APPEAL. 2.3 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. KEEPING IN VIEW OF THE FACTS A ND CIRCUMSTANCES OF THE ASSESSEE, THE CONDONATION APPLICATION FOR LATE FILI NG OF THE APPEAL OF THE ASSESSEE IS ALLOWED IN VIEW OF THE JUDGMENT OF HO N'BLE APEX COURT IN THE CASE OF COLLECTOR, LAND ACQUISITION VS. MST. KA TIJI AND OTHERS, 167 ITR 471 WHEREIN THE HON'BLE COURT HAS OBSERVED AS UNDER:- THE LEGISLATURE HAS CONFERRED POWER TO CONDONE DE LAY BY ENACTING SECTION 5 OF THE LIMITATION ACT, 1963, IN ORDER TO ENABLE THE COURTS TO DO SUBSTANTIAL JUSTICE TO PARTIES BY DISPOSING OF MATTERS ON MERITS. THE EXPRESSION ' SUFFICIENT CAUS E ' IN SECTION 5 IS ADEQUATELY ELASTIC TO ENABLE THE COURTS TO APPLY TH E LAW IN A MEANINGFUL MANNER WHICH SUBSERVES THE ENDS OF JUSTI CE--THAT BEING THE LIFE-PURPOSE OF THE EXISTENCE OF THE INSTITUTIO N OF COURTS. A JUSTIFIABLY LIBERAL APPROACH HAS TO BE ADOPTED ON P RINCIPLE. THUS THE ASSESSEE'S APPLICATION FOR CONDONATION OF DELAY IS ALLOWED. 3.1 APROPOS ASSESSEE'S SOLITARY GROUND FOR IMPOSITI ON OF PENALTY U/S 271D OF THE ACT IN BOTH THE APPEALS, THE FACTS AS E MERGES FROM THE ORDER OF THE LD. CIT(A) IS AS UNDER:- 4. I HAVE DULY CONSIDERED ASSESSEE'S SUBMISSION A ND ALSO CAREFULLY GONE THROUGH ASSESSMENT ORDER AND PENALTY ORDERS PASSED U/S 271D OF THE I.T. ACT. I HAVE ALSO TAKEN A NOTE OF FACTUAL MATRIX OF THE CASE AS WELL AS APPLICABLE CA SE LAWS RELIED UPON. ITA NO. 813/JP/2016 M/S. NARYANJI GAJAKWALE (P) LTD. VS. JCIT, CENTRAL RANGE, JAIPUR 4 ON PERUSAL OF THE SUBMISSION FOR THE A.Y. 2007-08 AND 2010-11, IT IS SEEN THAT ASSESSEE DURING THE F. Y. 2006-07 AND 2009-10 UNDER APPEAL HELD RECEIVED A SUM OF RS. 68,000/- AND RS. 60,000/- IN CASH. IN THIS REGARD, ASSESSEE AS CONTENDED THAT THE TRANSACTIONS PERTAINING TO SUM O F RS. 68,000/- AND RS. 60,000/- IS IN THE NATURE OF CURRE NT ACCOUNT ON URGENT BASIS TO MEET BUSINESS LIABILITY. EXPLANA TION GIVEN IN THIS REGARD DOES NOT SEEM TO BE BONAFIDE AS ASSE SSEE FAILED TO EXPLAIN EXACT NATURE OF URGENT BUSINESS REQUIR EMENT. IT IS SUBMITTED THAT A/C MAINTAINED BY THE ASSESSEE IS A COMPOSITE A/C WHICH CONTAIN DETAILS OF ENTRIES IN C HEQUE (ESPECIALLY FOR SALARY TRANSACTION AND LOAN TRANSAC TIONS) AND CASH TRANSACTIONS BUT EVEN AFTER REPEATED REQUEST, NO SUCH LEDGER A/C OR CASH BOOK OF COMPANY. THEREFORE, IN V IEW OF FACTS AND CIRCUMSTANCES OF THE CASE WHICH ASSESSEE HAS FAILED TO JUSTIFY ITS CONTENTION. PENALTY LEVIED OF RS. 68 ,000/-AND RS. 60,000/- U/S 271D OF THE ACT IS HEREBY JUSTIFIE D. ASSESSEE'S BOTH APPEALS ARE FAILING IN GR. NO. 1. 5. IN THE RESULT, THE APPEAL IN ITA NO. 286/12-13 PERTAINING TO PENALTY ORDER PASSED U/S 271D OF THE ACT STANDS DISMISSED FOR A.Y. 2007-08 6. IN THE RESULT, THE APPEAL IN ITA NO. 369/12-13 PERTAINING TO PENALTY ORDER PASSED U/S 271D OF THE ACT STANDS DISMISSED FOR A.Y. 2010-11. 3.2 DURING THE COURSE OF HEARING, THE LD. AR OF THE SUBMITTED THAT THE ASSESSEE COMPANY HAD RECEIVED THE FOLLOWING FUNDS/ AMOUNTS FROM ITS DIRECTOR ON ACCOUNT OF CURRENT ACCOUNT TRANSACTION S IN THE ASSESSMENT YEARS 2007-08 AND 2010-11. A.Y. 2007-08 A.Y. 2010-11 S.N. NAME OF DIRECTOR DATE AMOUNT TAKEN NAME OF DIRECTOR DATE AMOUNT TAKEN 1. DINESH MEENA 5-04-16 20,000 DINESH MEENA 3-04-0 9 20,000 2. DINESH MEENA 28-12-06 14,000 RAMKARAN MEENA 2-0 4-09 20,000 ITA NO. 813/JP/2016 M/S. NARYANJI GAJAKWALE (P) LTD. VS. JCIT, CENTRAL RANGE, JAIPUR 5 3. JITENDRA MEENA 5-04-06 20,000 RAMSWAROOP MEENA 1-04-09 20,000 4. JITENDRA MEENA 28-04-05 14,000 - - - TOTAL 68,000 TOTAL 60,000 THE LD. AR OF THE ASSESSEE FURTHER CONTENDED THAT T HE FUNDS TAKEN BY THE ASSESSEE FROM ITS DIRECTOR IN ITS REGULAR COURSE OF BUSINESS FROM CURRENT ACCOUNT MAINTAINED BY THE ASSESSEE COMPANY IN ITS B OOKS OF ACCOUNT. THESE FUNDS ARE RECEIVED TO MEET URGENT NEEDS OF CO MPANY TIME TO TIME. THE LD. AR FURTHER SUBMITTED THAT TRANSACTIONS ARE IN BETWEEN A CLOSELY HELD COMPANY AND ITS DIRECTORS IMPLYING THAT ONE IN DIVIDUAL MANAGING THE AFFAIRS OF THE TWO CONCERNS AND THE TRANSACTIONS DO NOT PARTAKE THE NATURE OF DEPOSIT. THE ENTIRE TRANSACTION IS UNDERTAKEN WI TH BONA FIDE INTENTION. SHRI RAMSWAROOP MEENA ALSO FILED A COPY OF AFFIDAVI T DATED 21-11-2011 THAT ONE PERSON WAS MANAGING THE ENTIRE BUSINESS AF FAIRS OF ENTIRE GROUP. THERE IS A JOINT FAMILY CONSISTING OF ALL FOUR BROT HERS I.E. RAMSWAROOP MEENA, RAMKARAN MEENA, RAJENDRA MEENA, JINTENDRA ME ENA AND THEIR FAMILIES. THE LD. AR FURTHER SUBMITTED THAT THE RET URN INCOME IS ACCEPTED. THE CONFIRMATION OF ACCOUNTS WERE SUBMITTED TO THE LOWER AUTHORITIES BUT THE LOWER AUTHORITIES CONFIRMED THE PENALTY U/S 271 D ON THE ASSESSEE. THE LD. AR OF THE ASSESSEE RELIED ON FOLLOWING CASE LAWS TO THIS EFFECT. 1. DILLU CINE ENTERPRISES (P) LTD. VS. ADDL. CIT (2 002) TAX PUBLISHER (DT) 733 HYDERABAD TRIBUNAL. HELD THAT THE ACTIVE DIRECTOR OF THE ASSESSEE COMPANY IS CL EARLY NOT ITA NO. 813/JP/2016 M/S. NARYANJI GAJAKWALE (P) LTD. VS. JCIT, CENTRAL RANGE, JAIPUR 6 COVERED BY THE EXPRESSION ANY OTHER PERSON OCCURRING IN SECTION 269SS OF THE ACT. FURTHER HELD THAT MERE TECHNICAL BREACH OF PROVISIONS, WHILE TRANSA CTIONS WERE HELD TO BE GENUINE DO NOT ATTRACT PROVISIONS O F SECTION 269SS, THEREFORE, WHERE ONE OF THE DIRECTORS OF ASS ESSEE COMPANY BROUGHT FUNDS FROM HIS PERSONAL ACCOUNT WHE NEVER ASSESSEE WAS IN REQUIREMENT OF FUNDS WHETHER TRANSA CTIONS BETWEEN ASSESSEE AND DIRECTOR OF ASSESSEE DO NOT FA LL WITHIN MISCHIEF SOUGHT TO BE REMEDIED BY THE SECTION AS TH ERE IS NO CASE AGAINST ASSESSEE THAT THESE TRANSACTIONS HAD A NYTHING TO DO WITH EVASION OF TAX OR CONCEALMENT OF INCOME. 2. CIT VS. IDHAYAN PUBLICATION LTD. (2006) TAX PUBL ISHER (DT) 1251-MADRAS HIGH COURT HELD THAT : AMOUNT RECEIVED BY A PRIVATE COMPANY FROM ITS DIRECTOR NEI THER LOAN NOR DEPOSIT SINCE THE TRANSACTION DID NOT FALL WI THIN THE MEANING OF LOAN OR ADVANCE THERE WAS NO VIOLATION O F SECTION 269SS. 3. CIT VS. AJANA DYEING & PRINTING MILLS (2003) 264 ITR 505 (RAJ) HELD THAT WHILE LEVYING PENALTY U/S 271D FOR VIOLATION OF PROVISIONS OF SECTION 269SS ADJUST MENT OF RS. 20,000/- IS TO BE ALLOWED WHICH IS PERMISSIBLE U/S 269SS. 4. SUDHA AGRO & CHEMICAL INDUSTRIES VS. ADDL. CIT (2016) TAX PUBLISHER (DT) 2783 ( VISHAKHAPATNAM TRIBUNAL ) HELD THAT AFTER TAKING INTO CONSIDER ATION OF JUDGEMENT OF RAJ. HIGH COURT IN CASE OF AJANTA DYIN G & PRINTING MILLS HELD THAT PENALTY SHALL BE LEVIED AFTER EXCLUDING RS. 20,000/- IN EACH CASE AS PERMISSIBLE U/S 269SS OF THE ACT. 3.3 DURING THE COURSE OF HEARING, THE LD. DR RELIED ON THE ORDERS OF LOWER AUTHORITIES. 3.4 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOTED FROM THE AVAILABLE RECORDS THAT THE ASSESSEE ITA NO. 813/JP/2016 M/S. NARYANJI GAJAKWALE (P) LTD. VS. JCIT, CENTRAL RANGE, JAIPUR 7 HAD RECEIVED FUNDS IN CASH FROM ITS DIRECTORS AMOUN TING TO RS. 68,000/- FOR THE ASSESSMENT YEAR 2007-08 AND RS. 60,000/- FO R THE ASSESSMENT YEAR 2010-11 RESPECTIVELY FOR MEETING OUT THE URGENT BUS INESS NEEDS OF THE ASSESSEE COMPANY FOR WHICH THE ASSESSEE HAD SUBMITT ED THE CONFIRMATION OF ACCOUNTS TO THE LOWER AUTHORITIES. IT IS NOTED T HAT THE RETURN OF INCOME FILED BY THE ASSESSEE IS ACCEPTED AND THERE WAS NO CASE AGAINST THE ASSESSEE THAT THESE TRANSACTIONS HAD ANYTHING TO DO WITH EVASION OF TAX OR CONCEALMENT OF INCOME. IT MAY BE NOTED THAT SECTION 271D READ WITH SECTION 269SS WAS INTRODUCED BY THE LEGISLATURE TO DISCOURAGE THE MENACE OF BLACK MONEY. SINCE THESE TRANSACTIONS AR E GENUINE, THIS ELEMENT OF BLACK MONEY IS TOTALLY RULED OUT. IT IS FURTHER NOTED THAT ON SIMILAR TYPE OF ISSUE THE ITAT COORDINATE BENCH IN THE CASE OF SMT. KUSUM DHAMANI VS. ADDL. CIT VIDE ITS ORDER DATED 13 -06-2014 IN ITA NO. 847/JP/2011 FOR THE ASSESSMENT YEAR 2006-07 HAD DELETED THE PENALTY U/S 271D OF THE ACT BY OBSERVING AS UNDER:- 4.0 WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUS ED THE RELEVANT MATERIAL AVAILABLE ON RECORD. FROM THE REC ORD THERE IS NO SHRED OF DOUBT ABOUT THE GENUINENESS OF THE TRANSAC TIONS AND THEIR DISCLOSURE IN THE BOOKS OF ACCOUNT AND RETURNS OF B OTH THE ASSESSEE WHO HAPPEN TO BE HUSBAND AND WIFE, CARRYING ON THE BUSI NESS AS SISTER CONCERNS. SECTION 271D READ WITH SECTION 269SS WAS INTRODUCED BY THE LEGISLATURE TO DISCOURAGE THE MENACE OF BLACK MONEY . SINCE THESE TRANSACTIONS ARE GENUINE, THIS ELEMENT OF BLACK MON EY IS TOTALLY RULED OUT. THE ASSESSEE HAS GIVEN AN EXPLANATION IN OUR V IEW IS NOT UNREASONABLE AND IS BASED ON BUSINESS EXIGENCIES AL SO FOR PAYMENTS TO LABOURERS AND LENDERS. UNDER THESE CIRCUMSTANCES, W E ARE OF THE VIEW THAT THE TRANSACTIONS BEING GENUINE AND THE ASSESS EE HAVING OFFERED ITA NO. 813/JP/2016 M/S. NARYANJI GAJAKWALE (P) LTD. VS. JCIT, CENTRAL RANGE, JAIPUR 8 REASONABLE EXPLANATION JUSTIFYING THESE CASH TRANSA CTIONS, THE IMPUGNED PENALTY U/S 271D IS NOT LEVIABLE. OUR VIE W IS FORTIFIED BY THE JUDGEMENT OF HON'BLE JURISDICTIONAL HIGH COURT IN T HE CASE OF CIT VS. RAJ KUMAR SHARMA (SUPRA) AND THE JUDGEMENT OF HON'B LE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. SAINI MED ICAL STORE (SUPRA) WHICH IS FOLLOWED BY HON'BLE P & H HIGH COURT IN THE CASE OF CIT VS. SUNIL KUMAR GOEL (SUPRA). THUS IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND THE DECISIONS RELIED ON ABOVE, THE PENALTY IS DELETED. RESPECTFULLY FOLLOWING THE DECISION OF ITAT COORDIN ATE BENCH IN THE CASE OF SMT. KUSUM DHAMANI VS. ADDL. CIT (SUPRA) AN D ALSO IN VIEW OF THE FOLLOWING CASE LAWS AS RELIED UPON BY THE LD. AR OF THE ASSESSEE NAMELY :- 1. DILLU CINE ENTERPRISES (P) LTD. VS. ADDL. CIT (2002) TAX PUBLISHER (DT) 733 HYDERABAD TRIBUNAL. 2. CIT VS. IDHAYAN PUBLICATION LTD. (2006) TAX PUBLISHER (DT) 1251-MADRAS HIGH COURT 3. CIT VS. AJANA DYEING & PRINTING MILLS (2003) 264 ITR 505 (RAJ) 4. SUDHA AGRO & CHEMICAL INDUSTRIES VS. ADDL. CIT (2016) TAX PUBLISHER (DT) 2783 ( VISHAKHAPAT NAM TRIBUNAL ) I DIRECT TO DELETE THE PENALTY OF RS. 68,000/- AND 60,000/- RESPECTIVELY U/S 271D OF THE ACT SUSTAINED BY THE LD. CIT(A) IN ASSESSEE'S CASE FOR BOTH THE ASSESSMENT YEARS (SUPRA). THUS THE APPEALS OF THE ASSESSEE ARE ALLOWED ITA NO. 813/JP/2016 M/S. NARYANJI GAJAKWALE (P) LTD. VS. JCIT, CENTRAL RANGE, JAIPUR 9 4.0 IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 /01/ 2017 SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 16 /01/ 2017 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S. NARAYANJI GAJAKWALE (P) LTD. J AIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE JCIT, CENTRAL RANGE, JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 813/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR