Snehalata Sitani , Jalpaiguri V. JCIT, Range - 1, Jalpaiguri , Jalpaiguri

ITA 862/KOL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7849 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 02-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: I JAMIR
• Section: 271D

Judgement Text

I.T.A. NO. 862/KOL/2018 ASSESSMENT YEAR: 2012-2013 SNEHALATA SITANI 1 IN THE INCOME TAX APPELLATE TRIBUNAL, KOLKATA D BENCH, KOLKATA BEFORE SHRI P.M. JAGTAP, VICE-PRESIDENT (KZ) AND SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER I.T.A. NOS. 862/KOL/2018 ASSESSMENT YEAR: 2012-2013 SNEHALATA SITANI,.................................. ....................................... APPELLANT C/O. SUBASH AGARWAL & ASSOCIATES, SIDDHA GIBSON, 1, GIBSON LANE, SUITE-213, 2 ND FLOOR, KOLKATA-700 069 [PAN: AKVPS 6994 G] -VS.- JOINT COMMISSIONER OF INCOME TAX,................ ......................RESPONDENT RANGE-1, JALPAIGURI, CENTRAL REVENUE BUILDING, 1 ST FLOOR, NAYA BASTI, JALPAIGURI-735 101 APPEARANCES BY: SHRI SUBASH AGARWAL, ADVOCATE, FOR THE APPELLANT SHRI I. JAMIR, JCIT, SR. D.R., FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : FEBRUARY 13, 2019 DATE OF PRONOUNCING THE ORDER : APRIL 24, 2019 O R D E R PER SHRI P.M. JAGTAP, VICE-PRESIDENT (KOLKATA ZONE) :- THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS), JALPAIGURI DA TED 16.02.2018, WHEREBY HE CONFIRMED THE PENALTY OF RS.3,42,000/- I MPOSED BY THE ASSESSING OFFICER UNDER SECTION 271D OF THE INCOME TAX ACT, 1961. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L, WHO IS ENGAGED IN THE BUSINESS OF MANUFACTURING OF CAPS, HANDLES, PAC KING MATERIALS, PET I.T.A. NO. 862/KOL/2018 ASSESSMENT YEAR: 2012-2013 SNEHALATA SITANI 2 JARS, BOTTLES ETC. UNDER THE NAME AND STYLE OF HER PROPRIETARY CONCERN M/S. KRISHNA INDUSTRIES. THE RETURN OF INCOME FOR T HE YEAR UNDER CONSIDERATION WAS FILED BY HER ON 21.12.2012 DECLAR ING TOTAL INCOME OF RS.3,20,860/-. DURING THE COURSE OF ASSESSMENT PROC EEDINGS, IT WAS NOTICED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAD TAKEN FRESH UNSECURED LOANS DURING THE YEAR UNDER CONSIDERATION FROM HER DAUGHTER SMT. MONIKA SITANI AND HER SON-IN-LAW SHRI AJAY KUM AR JAIN AMOUNTING TO RS.95,000/- AND RS.2,66,000/- OTHERWISE THAN BY ACC OUNT PAYEE CHEQUES OR ACCOUNT PAYEE BANK DRAFTS. SINCE THE SAID LOANS WERE TAKEN BY THE ASSESSEE IN CONTRAVENTION OF THE PROVISIONS OF SECT ION 269SS OF THE ACT, PENALTY PROCEEDINGS UNDER SECTION 271D WERE INITIAT ED BY THE ASSESSING OFFICER. 3. DURING THE COURSE OF PENALTY PROCEEDINGS, THE FO LLOWING EXPLANATION WAS OFFERED BY THE ASSESSEE IN RESPONSE TO THE SHOW -CAUSE NOTICE ISSUED BY THE ASSESSING OFFICER:- LOAN OF RS.2,66,000/- AND RS.95,000/- WERE TAKEN FR OM SHRI AJAY KUMAR JAIN AND SMT. MONIKA SITANI RESPECTIVELY IN CASH. SHRI AJAY KUMAR JAIN AND SMT. MONIKA SITANI HAPPED TO BE THE SON-IN-LAW AND DAUGHTER RESPECTIVELY OF THE ASSESSEE. THE LOANS WERE TAKEN ON SUNDAYS TO MEET URGENT BUSINESS REQUIREMENT. THE LENDERS HAVE DISCLOSED THE LOANS ADVANCED TO TH E ASSESSEE IN THEIR RESPECTIVE RETURNS OF INCOME. RELIANCE WAS PLACED ON THE FOLLOWING DECISIONS, WHI LE CLAIMING THAT PENALTY U/S 271D OF THE ACT SHALL NOT BE LEVIED IF THE LOAN IS TAKEN TO MEET THE URGENT BUSI NESS REQUIREMENT: (I) CIT VS.- T.R. RENGARAJAN (20050 (MADRAS HIGH COURT) [2 TMI 90] AND (II) KUSUM DHAMANI VS.- ADDITIONAL CIT (2015) (ITAT JAIPUR)[4 TMI 144] I.T.A. NO. 862/KOL/2018 ASSESSMENT YEAR: 2012-2013 SNEHALATA SITANI 3 THE ABOVE EXPLANATION OFFERED BY THE ASSESSEE WAS N OT FOUND ACCEPTABLE BY THE ASSESSING OFFICER FOR THE DETAILED REASONS G IVEN IN THE PENALTY ORDER AND REJECTING THE SAME, HE IMPOSED A PENALTY OF RS.3,42,000/- UNDER SECTION 271D OF THE ACT. 4. THE PENALTY IMPOSED BY THE ASSESSING OFFICER UND ER SECTION 271D WAS CHALLENGED BY THE ASSESSEE IN THE APPEAL FILED BEFORE THE LD. CIT(APPEALS) AND SINCE THE SUBMISSIONS MADE BY THE ASSESSEE IN SUPPORT OF HER CASE WERE NOT FOUND ACCEPTABLE BY HIM, THE L D. CIT(APPEALS) PROCEEDED TO CONFIRM THE PENALTY IMPOSED BY THE ASS ESSING OFFICER FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH NO. 4.1.6 OF H IS IMPUGNED ORDER:- 4.1.6. I AGREE WITH THE OBSERVATION OF THE LD. JCI T THAT EVEN THOUGH THE AMOUNTS HAVE BEEN RECEIVED ON SUNDAY BUT IN VIEW OF THE OTHER FACTS MENTIONED BY THE JCIT THAT THE AMOUNTS WERE ONCE RECEIVED WERE NOT IMMEDIATELY UTI LISED BY THE APPELLANT AND WERE NOT SQUARED OFF TILL THE END OF THE YEAR, DID NOT REFLECT ANY ELEMENT OF URGENCY ON THE BASIS OF BUSINESS EXIGENCIES AND DENIED HIM THE DISCRETION G IVEN TO THE AUTHORITY LEVYING PENALTY U/S 271D OF THE I.T. ACT, 1961. IN VIEW OF THE FINDINGS GIVEN BY THE JCIT, I FIND N O FORCE IN THE ARGUMENTS MADE BY THE LD. A/R TO MODIFY THE ORD ER OF PENALTY U/S 271D OF THE I.T. ACT, 1961. THE LD. A/R , DURING THE COURSE OF APPELLATE PROCEEDINGS, HAS MERELY REI TERATED WHAT HAS ALREADY BEEN STATED BEFORE THE LOWER AUTHO RITIES AND HAS BEEN DISPOSED OFF VIA SPEAKING ORDER. THERE IS NO FRESH COMPELLING ARGUMENT OR MATERIAL JUSTIFYING MO DIFYING OF THE ORDER OF THE JCIT. AS TO THE CASE LAWS RELIE D BY THE APPELLANT, THE SAME PERTAIN TO THE GENUINENESS OF T HE TRANSACTION BASED ON THE FACTS OF THOSE CASES BEING A REASON IN USING DISCRETION OF THE AUTHORITY LEVYING PENALT Y IN FAVOUR OF THE ASSESSEE. HOWEVER, THE FACTS OF THE PRESENT CASE ARE DISTINGUISHABLE FROM THE CASE LAWS CITED BY THE APP ELLANT IN AS MUCH AS THAT LD. JCIT BEFORE LEVY OF PENALTY HAS CLEARLY MADE OUT THE CASE OF THERE BEING NO REASONABLE CAUS E REQUIRING USE OF DISCRETION IN FAVOUR OF THE APPELL ANT. NEITHER ANY FRESH COMPELLING REASON/ARGUMENT HAS BE EN MADE BY THE APPELLANT DURING THE COURSE OF APPELLAT E PROCEEDINGS SHOWING THAT JCIT HAS WRONGLY OR EXCESS IVELY EXERCISE HIS DISCRETION WHILE LEVYING PENALTY. IN VIEW OF FOREGOING DISCUSSION, I DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF JCIT AND THE PENALTY LE VIED BY THE LD. JCIT U/S 271D READ WITH SEC. 26988 IS HEREBY CO NFIRMED AND THE APPEAL OF THE APPELLANT IS DISMISSED. I.T.A. NO. 862/KOL/2018 ASSESSMENT YEAR: 2012-2013 SNEHALATA SITANI 4 AGGRIEVED BY THE ORDER OF THE LD. CIT(APPEALS), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. THE LD. D.R. HAS RELIED ON THE ORDERS OF THE AUTHORITIES BELOW IN SUPPORT OF THE R EVENUES CASE THAT IMPOSITION OF PENALTY UNDER SECTION 271D IS FULLY J USTIFIED IN THE FACTS AND CIRCUMSTANCES OF THE CASE. THE LD. COUNSEL FOR THE ASSESSEE, ON THE OTHER HAND, HAS CONTENDED THAT THE PROVISIONS OF SECTION 269SS ARE NOT STRICTLY APPLICABLE TO THE TRANSACTIONS BETWEEN THE RELATIVE S AND THE PENALTY IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271D AND CONFIRMED BY THE LD. CIT(APPEALS) IS NOT SUSTAINABLE. IN SUPPORT OF THIS CONTENTION, HE HAS RELIED ON THE DECISION OF THE COORDINATE BENCH OF THIS TRIBUNAL RENDERED IN THE CASE OF MANISHA PRAKASH AMIN VS.- JCIT VIDE ITS ORDER DATED 24.05.2011 PASSED IN ITA NO. 1839/KOL/2010, W HEREIN IT WAS HELD THAT THE TRANSACTIONS BETWEEN RELATIVES INVOLVING R ECEIPT OF LOAN IN CASH ARE NOT IN THE NATURE OF LOANS OR DEPOSITS AS ENVIS AGED IN SECTION 269SS OF THE ACT AND THE PENALTY IMPOSED UNDER SECTION 271D WAS ACCORDINGLY CANCELLED BY THE TRIBUNAL. A SIMILAR ISSUE WAS AGAI N DECIDED BY THE TRIBUNAL IN THE CASE OF ANANT HIMATSINGKA VS.- ADD L. CIT (ITA NOS. 331 & 332/KOL/2010) DATED 25.11.2011) CITED BY THE LD. CO UNSEL FOR THE ASSESSEE, WHEREIN IT WAS HELD THAT THE LOAN TRANSAC TION BETWEEN SON-IN- LAW AND FATHER-IN-LAW FOR GIVING A SUPPORT AND HELP WAS NOT A LOAN OR DEPOSIT IN STRICTER SENSE OF SECTION 269SS OF THE A CT AND THE SAME HAVING BEEN GIVEN ONLY AS A FINANCIAL SUPPORT, THE RELEVAN T TRANSACTION DID NOT FALL IN THE AMBIT OF SECTION 269SS OF THE ACT. IN O UR OPINION, THE RATIO OF THESE DECISIONS OF THE COORDINATE BENCH OF THIS TRI BUNAL IS SQUARELY APPLICABLE IN THE PRESENT CASE, WHERE THE LOANS IN QUESTION WERE RECEIVED BY THE ASSESSEE IN CASH FROM HER DAUGHTER AND SON-I N-LAW AND APPLYING THE SAME, WE HOLD THAT THE PENALTY IMPOSED BY THE A SSESSING OFFICER UNDER SECTION 271D AND CONFIRMED BY THE LD. CIT(APP EALS) IS NOT I.T.A. NO. 862/KOL/2018 ASSESSMENT YEAR: 2012-2013 SNEHALATA SITANI 5 SUSTAINABLE. WE ACCORDINGLY CANCEL THE SAID PENALTY AND ALLOW THE APPEAL OF THE ASSESSEE. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON APRIL 24, 201 9. SD/- SD/- (SATBEER SINGH GODARA) (P.M. JAGTAP) JUDICIAL MEMBER VICE -PRESIDENT (KZ) KOLKATA, THE 24 TH DAY OF APRIL, 2019 COPIES TO : (1) SNEHALATA SITANI, C/O. SUBASH AGARWAL & ASSOCIATES, SIDDHA GIBSON, 1, GIBSON LANE, SUITE-213, 2 ND FLOOR, KOLKATA-700 069 (2) JOINT COMMISSIONER OF INCOME TAX, RANGE-1, JALPAIGURI, CENTRAL REVENUE BUILDING, 1 ST FLOOR, NAYA BASTI, JALPAIGURI-735 101 (3) COMMISSIONER OF INCOME TAX (APPEALS), JALPAIGU RI, (4) COMMISSIONER OF INCOME TAX- , (5) THE DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, KOLKATA BENCHES, KOLKATA LAHA/SR. P.S.