M/s. DRL Logtistics Pvt. Ltd., Bengaluru V. The Additional Commissioner of Income Tax, Range - 2(1), Bengaluru

ITA 814/BANG/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7033 (ITAT-BANGALORE)
• Duration Of Justice: 8 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-12-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: misc
• Appeal Filed On: 10-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR PRADEEP KUMAR ACIT
• Assessee Lawyers: V SRINIVASAN
• Keywords: Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH : BANGALORE BEFORE SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI JASON P. BOAZ, ACCOUNTANT MEMBER ITA NOS.813 AND 814/BANG/2017 ASSESSMENT YEAR : 2012-13 M/S. DRL LOGISTICS PVT. LTD., # 33, KOMAL MANSION, MTB ROAD, NEAR MINERVA CIRCLE, BENGALURU. PAN : AADCD 2510 L VS. THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE 2[1], BENGALURU. APPELLANT RESPONDENT ASSESSEE BY : SHRI. V. SRINIVASAN, ADVOCATE REVENUE BY : DR. PRADEEP KUMAR, ACIT DATE OF HEARING : 18.12.2017 DATE OF PRONOUNCEMENT : 22.12 .2017 O R D E R PER SUNIL KUMAR YADAV, JUDICIAL MEMBER THESE APPEALS ARE PREFERRED BY THE ASSESSEE AGAINS T THE RESPECTIVE ORDERS OF CIT(A) ON FOLLOWING GROUNDS: GROUNDS OF APPEAL IN ITA NO.813/BANG/2017 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS LEVYING PENALTY U/S 271D OF THE ACT AGAINST THE APPELLANT, ARE OPPOSED TO LAW, EQUI TY, WEIGHT OF EVIDENCE, PROBABILITIES FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED CIT[A] IS NOT JUSTIFIED IN UPHOLDING THE PENALTY IMPOSED U/S 271-D OF THE ACT WITHOUT APPRECIATING THAT THE APPELLANT HAS NOT COMMITTED ANY DEFAULT ACTIONABLE U/S 271-D OF THE ACT AND CONSEQUENTLY, T HE IMPUGNED ORDER PASSED IS BAD IN LAW AND THE SAME DESERVES TO BE CANCELLED. 2.1 THE LEARNED CIT[A] OUGHT TO HAVE APPRECIATED TH AT THE APPELLANT HAD RECEIVED CERTAIN AMOUNTS FROM ITS DIRECTORS AND MEMBERS OF T HE FAMILY OF THE DIRECTORS AND THUS, THE AMOUNTS SO RECEIVED CANNOT BE REGARDED AS A LOAN OR DEPOSITS FROM ANY OTHER PERSON TO LEVY PENALTY U/S. 271-D OF THE ACT AND HENCE, THE PENALTY LEVIED ITA NOS.813 AND 814/BANG/2017 PAGE 2 OF 5 DESERVES TO BE CANCELLED. 3. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT[ A] OUGHT TO HAVE APPRECIATED THAT THE APPELLANT WAS PREVENTED BY REA SONABLE CAUSE IN COMPLYING WITH THE PROVISIONS OF SEC. 269SS OF THE ACT AND THAT THERE WAS NO ANIMUS TO DEFY THE STATUTORY PROVISIONS OF THE ACT AND THE REFORE, THE PENALTY IMPOSED OUGHT TO HAVE BEEN CANCELLED. 3.1 THE LEARNED CIT[A] OUGHT TO HAVE APPRECIATED TH AT THE FAILURE TO COMPLY WITH THE PROVISIONS OF SEC 269 SS OF THE ACT WAS DUE TO REAS ONABLE CAUSE ON ACCOUNT OF THE IGNORANCE OF STATUTORY PROVISIONS AND THEREFORE, TH E PENALTY IMPOSED DESERVES TO BE CANCELLED. 4. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT[A] OUGHT TO HAVE APPRECIATED THAT THE PENALTY LEVIED OF RS. 10,50,000/- AND RS. 10,25,000/ AGGREGATING TO RS. 20,75,000/- IN RESPECT OF THE AMOUNTS RECEIVED BY T HE APPELLANT FROM SMT. NALINI K DHARAMSHI IS EXCESSIVE ESPECIALLY WHEN THE AMOUNTS RECEIVED IN CASH WAS ONLY RS. 10,50,000/- AND THEREFORE, THE PENALTY SUSTAINED BY THE LEARNED CIT [A] IS LIABLE TO REDUCED SUBSTANTIALLY. 5. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT[A] OUGHT TO HAVE APPRECIATED THAT THE PENALTY LEVIED OF RS. 87,000/- AND RS. 92, 500/- AGGREGATING TO RS. 1,79,500/-IN RESPECT OF THE AMOUNTS RECEIVED BY THE APPELLANT FROM SMT. NALINI K DHARAMSHI IS EXCESSIVE ESPECIALLY WHEN THE AMOUNTS RECEIVED IN CASH WAS ONLY RS. 92,500/- AND THEREFORE, THE PENALTY SUSTAINED BY THE LEARNED CIT[A] IS LIABLE TO REDUCE D SUBSTANTIALLY. 6. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT[A] OUGHT TO HAVE APPRECIATED THAT THE PENALTY LEVIED OF RS. 8,20,000/- IN RESPECT OF THE AMOUNTS RECEIVED BY THE APPELLANT FROM SMT. KOMAL K DHARAMSHI IS UNJUSTIFIED AS THE APPELLANT H AD RECEIVED THE SAID AMOUNTS THROUGH BANKING CHANNELS AND THEREFORE, THE PENALTY SUSTAIN ED BY THE LEARNED CIT[A] IS LIABLE TO BE DELETED. 7. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGED A T THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBLY PRAYS THAT THE APPEAL MAY BE ALLOWED AND JUSTICE RENDERED AND THE APPELLANT MAY BE AWARDED COSTS IN PROSECUTI NG THE APPEAL AND ALSO ORDER FOR THE REFUND OF THE INSTITUTION FEES AS PART OF THE COST. GROUNDS OF APPEAL IN ITA NO.814/BANG/2017 1. THE ORDERS OF THE AUTHORITIES BELOW IN SO FAR AS LE VYING PENALTY U/S 271E OF THE ACT AGAINST THE APPELLANT, ARE OPPOSED TO LAW, EQUITY, WEIGHT O F EVIDENCE, PROBABILITIES FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE LEARNED C!T[A] IS NOT JUSTIFIED IN UPHOLDING TH E PENALTY IMPOSED U/S 271-E OF THE ACT WITHOUT APPRECIATING THAT THE APPELLANT HAS NOT COM MITTED ANY DEFAULT ACTIONABLE U/S 271-E OF THE ACT AND CONSEQUENTLY, THE IMPUGNED ORDER PASSED IS BAD IN LAW AND THE SAME DESERVES TO BE CANCELLED. 2.1 THE LEARNED CIT[A] OUGHT TO HAVE APPRECIATED T HAT THE APPELLANT HAD REPAID CERTAIN AMOUNTS TO ITS DIRECTORS AND MEMBERS OF THE FAMILY OF THE D IRECTORS AND THUS, THE AMOUNTS SO REPAID CANNOT BE REGARDED AS A LOAN OR DEPOSITS REPAID TO ANY OTH ER PERSON TO LEVY PENALTY U/S. 271-E OF THE ACT AND HENCE, THE PENALTY LEVIED DESERVES TO BE CANCEL LED. 3. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT[A] OUGHT TO HAVE APPRECIATED THAT THE ITA NOS.813 AND 814/BANG/2017 PAGE 3 OF 5 APPELLANT WAS PREVENTED BY REASONABLE CAUSE IN COMP LYING WITH THE PROVISIONS OF SEC. 269T OF THE ACT AND THAT THERE WAS NO ANIMUS TO DEFY THE STATUT ORY PROVISIONS OF THE ACT AND THEREFORE, THE PENALTY IMPOSED OUGHT TO HAVE BEEN CANCELLED. 3.1 THE LEARNED CIT[A] OUGHT TO HAVE APPRECIATED T HAT THE FAILURE TO COMPLY WITH THE PROVISIONS OF SEC. 269T OF THE ACT WAS DUE TO REASONABLE CAUSE ON ACCOUNT OF THE IGNORANCE OF STATUTORY PROVISIONS AND THEREFORE, THE PENALTY IMPOSED DESER VES TO BE CANCELLED. 4. WITHOUT PREJUDICE TO THE ABOVE, THE LEARNED CIT[A] OUGHT TO HAVE APPRECIATED THAT THE PENALTY LEVIED OF RS. 1,25,000/- IN RESPECT OF AMOUNT REPAI D TO SRI. KUSHALCHAND D SHAH IS EXCESSIVE ESPECIALLY WHEN THE AMOUNT WAS NOT REPAID IN CASH A ND THEREFORE, THE PENALTY SUSTAINED BY THE LEARNED CIT[A] IS LIABLE TO REDUCED SUBSTANTIALLY. 5. FOR THE ABOVE AND OTHER GROUNDS THAT MAY BE URGED A T THE TIME OF HEARING OF THE APPEAL, YOUR APPELLANT HUMBLY PRAYS THAT THE APPEAL MAY BE ALLOW ED AND JUSTICE RENDERED AND THE APPELLANT MAY BE AWARDED COSTS IN PROSECUTING THE APPEAL AND ALSO ORDER FOR THE REFUND OF THE INSTITUTION FEES AS PART OF THE COSTS. 2. DURING THE COURSE OF HEARING, THE LEARNED COUNSE L FOR THE ASSESSEE INVITED MY ATTENTION TO ANNEXURE -7 ATTACHED TO STATEMENT OF PARTICULARS IN FORM 3 CD REQUIRED TO BE FILED BEFORE THE AO WITH THE SUBMISSION THAT ASSESSEE HAS RECEIV ED CERTAIN AMOUNT FROM 6 PERSONS OF WHICH DETAILS ARE IN THE STATEMENT IN WHICH IT HAS BEEN CATEGORICALLY MENTIONED THAT ACCEPTANCE HAS BEEN MADE BY CHEQUE BUT NECESSARY EV IDENCE WAS NOT AVAILABLE IN THE POSSESSION OF THE ASSESSEE. FOR THE SAKE OF REFERE NCE, THE DETAILS FURNISHED ARE EXTRACTED HEREUNDER: ANNEXURE 11 PARTICULARS OF EACH LOAN OR DEPOSIT IN AN AMOUNT EX CEEDING THE LIMIT SPECIFIED IN SECTION 269SS TAKEN OR ACCEPTED DURING THE PREVIOUS YEAR:- SL. NO. NAME ADDRESS PAN AMOUNT OF LOAN OR DEPOSIT TAKEN OR ACCEPTED WHETHER THE LOAN OR DEPOSIT WAS SQUARED UP DURING THE PREVIOUS YEAR MAXIMUM AMOUNT OUTSTANDING IN THE ACCOUNT AT ANY TIME DURING THE PREVIOUS YEAR LOAN OR DEPOSIT TAKEN OR ACCEPTED OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR AN ACCOUNT PAYEE BANK DRAFT 1 NALINI K DHARAMSHI 15,00,000 NO 30,75,000 REFER NOTE 2 NALINI K DHARAMSHI 7,75,000 NO 30,75,000 YES 3 KUSHALCHAND D SHAH 2,87,000 NO 13,75,000 REFER NOTE ITA NOS.813 AND 814/BANG/2017 PAGE 4 OF 5 4 KUSHALCHAND D SHAH 92,500 NO 13,75,000 YES 5 KOMAL K DHARAMSHI 15,40,000 NO 15,40,000 REFER NOTE 6 SANJALI R DHARAMSHI 90,000 YES 90,000 YES NOTE: THE ACCEPTANCE HAVE BEEN MADE BY CHEQUES. HO WEVER WE ARE UNABLE TO VERIFY WHETHER THE SAME IS MADE BY ACCOUNT PAYEE CHEQUE/DEMAND DRA FT, AS THE NECESSARY EVIDENCE IS NOT IN THE POSSESSION OF THE ASSESSEE. 3. IT WAS FURTHER CONTENDED THAT THE LOWER AUTHORIT IES HAVE CONSIDERED THE AMOUNT RECEIVED AND PAID WITHOUT LOOKING TO THE NARRATIONS GIVEN IN THE TABLE AND HAS TREATED THE RECEIPT AND PAYMENT IN CASH AND ACCORDINGLY LEVIED THE PENALTY UNDER SECTION 271D & 271E OF THE ACT. THE LEARNED COUNSEL FOR THE ASSESSEE F URTHER CONTENDED THAT SINCE THE ASSESSEE HAS RECEIVED AND PAID THE AMOUNT THROUGH CHEQUE THERE I S NO VIOLATION OF PROVISION TO SECTION 269SS AND 269T OF THE ACT. MOREOVER, HE HAS FURNI SHED THE REASONABLE CAUSE FOR RECEIPT OF CERTAIN AMOUNT IN CASH ALSO. SINCE THIS ASPECT WAS NOT EXAMINED BY THE LOWER AUTHORITIES, THE MATTER MAY BE SENT BACK TO THE AO TO EXAMINE THE DE TAILS FURNISHED BY THE ASSESSEE BY MAKING THE NECESSARY ENQUIRY. 4. THE LEARNED DR HOWEVER PLACED RELIANCE UPON THE ORDER OF THE CIT(A). HE HOWEVER AGREED THAT LET THE MATTER BE SENT BACK TO THE AO F OR VERIFICATION AND EXAMINATION OF THE ISSUES IN THE LIGHT OF EVIDENCES TO BE FILED BY THE ASSESS EE. 5. HAVING HEARD THE RIVAL SUBMISSIONS AND FROM THE CAREFUL PERUSAL OF THE RECORD, WE ARE OF THE VIEW THAT SINCE THE LOWER AUTHORITIES HAVE N OT APPLIED THEIR MIND TO THE NOTE GIVEN BY THE ASSESSEE BELOW THE TABLE SHOWING THE DETAILS OF RECEIPT, THE ISSUE REQUIRES TO BE VERIFIED AND EXAMINED. ACCORDINGLY, WE SET ASIDE THE ORDER OF THE CIT(A) IN BOTH THE CASES AND RESTORE THE MATTER TO THE AO TO EXAMINE THE CLAIM O F THE ASSESSEE AND ALSO TO EXAMINE THE REASONABLE CAUSE AS CONTENDED BY THE ASSESSEE FOR R ECEIPT OF CERTAIN AMOUNT IN CASH ALSO. ACCORDINGLY, APPEALS OF THE ASSESSEE ARE ALLOWED FO R STATISTICAL PURPOSES. ITA NOS.813 AND 814/BANG/2017 PAGE 5 OF 5 6. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOW ED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 22 ND DECEMBER, 2017. SD/- SD/- ( JASON P BOAZ ) (SUNIL KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE. DATED: 22 ND DECEMBER, 2017. /NS/* COPY TO: 1. APPELLANTS 2. RESPONDENT 3. CIT 4. GUARD FILE BY ORDER SR. PRIVATE SECRETARY, ITAT, BANGALORE.