ACIT, JODHPUR V. Sh. Badri Ram Chaudhary, JODHPUR

ITSSA 2/JODH/2012

• Counselvise Citation: [2013] 121 COUNSELVISE.COM (IT) 9624 (ITAT-JODHPUR)
• Duration Of Justice: 1 year(s) 9 month(s) 24 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 28-11-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 13-11-2013
• Assessment Year: misc
• Appeal Filed On: 03-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DEEPAK SEHGAL
• Assessee Lawyers: U C JAIN
• Keywords: Peak credit; Reasonable cause; Block assessment
• Section: 133A; 68; 6; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI HARI OM MARATHA, JUDICIAL MEMBER AND SHRI N.K.SAINI, ACCOUNTANT MEMBER IT(SSA) NO.01/JODH/2012 BLOCK PERIOD: 1997-98 TO 2003-2004 A.C.I.T. VS. SHRI BADRI RAM CHAUDHARY, CENTRAL CIRCLE-1, B-6, SHARMIK PURA, JODHPUR. JODHPUR (PAN: AATPC 6815 G) IT(SSA) NO.09/JODH/2011 BLOCK PERIOD: 01.04.1996 TO 06.02.2003 SHRI BADRI RAM CHAUDHARY, VS. D.C.I.T. C/O. SHRI U.C. JAIN, ADVOCATE, CENTRAL CIRCLE SHATRUNJAY, JODHPUR. HARI SINGH NAGAR, PALI ROAD, JODHPUR. (PAN: AATPC 6815 G) IT(SSA) NO.08/JODH/2011 BLOCK PERIOD: 01.04.1996 TO 06.02.2003 SHRI BADRI RAM CHAUDHARY, VS. D.C.I.T. C/O. SHRI U.C. JAIN, ADVOCATE, CENTRAL CIRCLE SHATRUNJAY, JODHPUR. HARI SINGH NAGAR, PALI ROAD, JODHPUR. (PAN: AATPC 6815 G) IT(SSA) NO.02/JODH/2012 BLOCK PERIOD: 1997-98 TO 2003-2004 IT(SS)A NOS.01/JODH/2012 09/JODH2011, 08/JODH/2011 & 02/JODH/2012 2 A.C.I.T. VS. SHRI BADRI RAM CHAUDHARY, CENTRAL CIRCLE-1, B-6, SHARMIK PURA, JODHPUR. JODHPUR (PAN: AATPC 6815 G) (APPELLANTS) (RESPONDENTS) ASSESSEE BY : SHRI U.C. JAIN DEPARTMENT BY : SHRI DEEPAK SEHGAL - DR DATE OF HEARING : 13.11.2013 DATE OF PRONOUNCEMENT : 28.11.2013 ORDER PER HARI OM MARATHA, JUDICIAL MEMBER WE PROCEED TO DECIDE THE ABOVE CAPTIONED CROSS APPEALS, EMANATING FROM THE ORDERS PASSED UNDER SECTIONS 271E AND 271D OF THE INCOME TAX ACT, 1961, (THE ACT FOR SHORT), VIDE WHICH PENALTIES WERE IM POSED ON ACCOUNT OF VIOLATIONS OF THE PROVISIONS OF SECTI ONS 269SS AND 269T OF THE ACT WHEN THE ASSESSEE HAS BEE N ALLEGED TO HAVE TAKEN DEPOSITS AND REPAID THEM, IN CASH. THE LD. CIT(A) HAS GIVEN PART RELIEF IN BOTH CASES OF PENALTIES AND THAT IS WHY THESE ARE FOUR CROSS APPE ALS. IT WILL HELP CONGRUENCE, CONVENIENCE AND BREVITY WHEN WE WOULD DECIDE ALL THESE APPEALS, WHICH WERE HEARD TOGETHER AND THE ISSUES INVOLVED THEREIN BEING ENTWINED, BY ONE SINGLE ORDER. IT(SS)A NOS.01/JODH/2012 09/JODH2011, 08/JODH/2011 & 02/JODH/2012 3 2. BRIEFLY STATED, THE COMMON FACTS OF THESE APPEAL S ARE THAT THE ASSESSEE, SHRI BADRI RAM CHOUDHARY, HA S BEEN CARRYING ON THE BUSINESS OF PLYING OF TRUCKS A ND BUSES. HE IS ALSO A PARTNER IN VARIOUS PARTNERSHIP- FIRMS APART FROM BEING THE DIRECTOR OF A PRIVATE LIMITED COMPANY. HE IS ALSO INVOLVED IN THE BUSINESS OF SAL E OF PETRO/DIESEL AND OIL AT VARIOUS PETROL BUNKS. A SUR VEY U/S. 133A OF THE ACT WAS CARRIED OUT ON 06/02/2003 AT HIS BUSINESS PREMISES. THE SURVEY(S) WAS SUBSEQUENT LY, ON THE SAME DAY, CONVERTED INTO SEARCH OPERATIONS U /S. 132 OF THE ACT. CONSEQUENTLY BLOCK ASSESSMENT ORDER WAS FRAMED U/S. 158BC READ WITH SECTION 142(2A) OF THE ACT ON 27/06/2005 DETERMINING HIS TOTAL UNDISCLOSED INCOME AT RS.13,13,31,267/- AS AGAINST DISCLOSED AT RS.26,94,040/-. AGAINST THIS BLOCK ASSESSMENT ORDER FRAMED FOR THE BLOCK PERIOD 1997-98 TO 2003-04 (UPT O 06/02/2003), THE ASSESSEE PREFERRED APPEALS AND THE LD. CIT(A) RESTRICTED THE UNDISCLOSED INCOME TO RS.5,94,74,076/- VIDE HIS ORDER DATED 11/09/2006. AGAINST THIS ORDER, BOTH PARTIES WENT BEFORE THE APPELLATE TRIBUNAL, WHO VIDE THEIR ORDER DATED 25/10/2007 SET ASIDE THE ASSESSMENT ORDER TO THE FI LE OF THE A.O. FOR DE NOVO CONSIDERATION. IN COMPLIANCE THEREOF THE A.O. FRAMED FRESH BLOCK ASSESSMENT ORDE R U/S. 158BC/254 R.W.S. 142(2A) OF THE ACT ON 15/04/2 009. DURING THIS PROCEEDINGS THE A.O. NOTICED THAT THE IT(SS)A NOS.01/JODH/2012 09/JODH2011, 08/JODH/2011 & 02/JODH/2012 4 ASSESSEE HAD TAKEN AND REPAID DEPOSITS/LOANS, IN CA SH, IN VIOLATION OF THE EXPENSES PROVISIONS OF SECTIONS 26 9SS AND 269T OF THE ACT. THEREFORE, THE A.O. INITIATED PENALTY PROCEEDINGS UNDER THESE SECTIONS. THE ASSES SEE OBJECTED TO THIS INITIATION OF PENALTIES BY THE A.O . DURING THE FRESH ASSESSMENT PROCEEDINGS BY STATING THAT THIS IS A SET ASIDE ORDER AND IN THE ORIGINAL ORDER NO SUCH INITIATION WAS MADE, THEREFORE, IT IS NOT LEGALLY POSSIBLE TO DO SO AS HE WAS TO REFRAME FRESH ORDER ON MERITS ONLY. BUT THE A.O. READ THE DIRECTION OF THE APPELLATE TRIBUNAL IN A DIFFERENT WAY THAT THE A.O. WAS FREE TO MAKE FRESH DECISION ON MERITS WHICH MEANT THAT THE A.O. COULD INITIATE EVEN THE PENALTY PROCEEDINGS. THE A.O. HAS ALSO OBSERVED THAT, EVEN IN CASE, THIS LEGAL OBJECTION OF THE ASSESSEE IS TAKEN TO BE VALID, THE PENALTY PROCEEDINGS UNDER SECTIONS 271E & 271D OF THE ACT ARE INDEPENDENT OF THE ASSESSMENT ORDER AND THERE IS NO BAR OR LIMITATION IN THIS REG ARD. THEREFORE, AFTER REJECTING ALL THESE OBJECTIONS OF THE ASSESSEE, THE A.O. HAS PASSED THE IMPUGNED ORDERS A ND IMPOSED PENALTIES. THESE OBJECTIONS OF THE ASSESSEE HAVE BEEN REJECTED. HOWEVER, AFTER CONSIDERING CERT AIN MISTAKES OF NAMES ETC. HE HAS GIVEN A PART RELIEF O N MERITS. AGAINST THESE ORDERS BOTH PARTIES ARE BEFOR E US. IT(SS)A NOS.01/JODH/2012 09/JODH2011, 08/JODH/2011 & 02/JODH/2012 5 3. WE HAVE HEARD RIVAL SUBMISSIONS AND HAVE CAREFUL LY PERUSED THE ENTIRE RECORD. BOTH PARTIES HAVE REITER ATED THE SAME ARGUMENTS WHICH WERE TAKEN BEFORE THE AUTHORITIES BELOW. HOWEVER, LD. AUTHORIZED REPRESENTATIVE SHRI U.C. JAIN, ADVOCATE, HAS BROUGH T A NEW FACT ON RECORD THAT THE BLOCK ASSESSMENT ORDER ITSELF HAS BEEN QUASHED BY THE APPELLATE TRIBUNAL, THEREFORE, PENALTY PROCEEDINGS INITIATED IN THE BLO CK ASSESSMENT ORDER WILL NOT SURVIVE. THE FACT THAT TH E APPELLATE TRIBUNAL HAS QUASHED THE BLOCK ASSESSMENT ORDER IS NOT DENIED BY THE LD. D.R., HOWEVER, HE HA STILY ADDED THAT THE REVENUE HAS FILED APPEAL BEFORE THE HONBLE JURISDICTIONAL HIGH COURT. 4. AFTER CONSIDERING RIVAL STANDS ON VARIOUS GROUND S, WE ARE OF THE OPINION THAT THE ISSUES RAISED CAN BE DECIDED INDIVIDUALLY, AS UNDER :- (A) WHEN THE PENALTY PROCEEDINGS WERE INITIATED IN THE FRESH BLOCK ASSESSMENT ORDER WHICH NOW STANDS QUASHED, CAN THE PENALTY STILL SURVIVE. 5. THERE IS NO DISPUTE REGARDING THE ABOVE FACT. THE CONTENTION OF LD. AR IS THAT WHEN THE PENALTY PROCEEDINGS U/S. 271D AND 271E WERE INITIATED IN TH E FRESH BLOCK ASSESSMENT ORDER DATED 15/04/2009 PASSE D IT(SS)A NOS.01/JODH/2012 09/JODH2011, 08/JODH/2011 & 02/JODH/2012 6 U/S. 158BC/254 HAS BEEN QUASHED BY THE APPELLATE TRIBUNAL. THE PENALTY ORDER WOULD ALSO BECOME INVAL ID. ON THE OTHER HAND, THE LD. CIT(DR) HAS STATED THAT THE PENALTY PROCEEDINGS ESPECIALLY UNDER SECTIONS 271D AND 271E ARE INDEPENDENT OF ANY ASSESSMENT ORDER AND WOULD DEFINITELY SURVIVE EVEN AFTER THE QUASHING OF THE BLOCK ASSESSMENT ORDER. HOWEVER, WE ARE NOT ENTIREL Y IN AGREEMENT WITH LD. CIT(DR) BECAUSE THE PENALTY PROCEEDINGS IN THESE CASES WERE INITIATED IN THE BO DY OF THE FRESH BLOCK ASSESSMENT ORDER DATED 15/04/2009 WHICH HAS BEEN QUASHED AND NO LONGER SURVIVES. WHEN THE BLOCK ASSESSMENT ORDER DOES NOT SURVIVE, ANY AC TION INITIATED THEREFROM WOULD NOT SURVIVE EITHER. IT IS TRUE THAT EVEN IN CASES WHERE ASSESSMENT ORDER IS NOT FR AMED OR THE RETURNED INCOME OF THE ASSESSEE IS ACCEPTED AND IN THE COMPUTATION INCOME ETC. IT IS NOTICED BY THE A.O. THAT LOANS/DEPOSITS HAVE BEEN ACCEPTED BY THE ASSES SEE OR HAS BEEN PAID AS SUCH, DURING THE RELEVANT YEAR, THE A.O. CAN INITIATE PENALTY PROCEEDINGS UNDER SECTION S 271D AND 271E. THERE IS A SUBSTANTIAL DIFFERENCE BETWEEN THE ABOVE STATED TWO PROPOSITIONS. WHEN THE PENALTY PROCEEDINGS ARE INITIATED IN ANY ORDER WHIC H STANDS QUASHED ANY AND EVERY ACTION WHICH IS TAKEN VIDE THAT QUASHED ORDER WOULD ALSO STAND QUASHED. THIS I S A NATURAL COROLLARY AND CANNOT BE DEMEANED LIGHTLY. B UT, IN CASE THE A.O. WOULD HAVE INITIATED SUCH PENALTIE S DE IT(SS)A NOS.01/JODH/2012 09/JODH2011, 08/JODH/2011 & 02/JODH/2012 7 HORS THE ASSESSMENT ORDER THEY WOULD HAVE SURVIVED. BUT THIS IS NOT THE CASE BEFORE US. THEREFORE, WE ARE I N AGREEMENT WITH LD. A.R. IN THIS REGARD. THE SECTION 269SS AND 269T FALL UNDER THE CHAPTER XXB WHICH IS TITLED AS REQUIREMENT AS TO MODE OF ACCEPTANCE, PAYMENT OR REPAYMENT IN CERTAIN CASES TO COUNTERACT EVASION OF TAX . THUS, APPARENTLY THESE PROVISIONS ARE AIMED AT CHECKING BLOCK MONEY ON WHICH TAX IS EVADE D. SECTION 269SS READS AS UNDER :- 269SS. NO PERSON SHALL, AFTER THE 30TH DAY OF JUNE, 1984, TAKE OR ACCEPT FROM ANY OTHER PERSON (HEREAFTER IN THIS SECTION RE FERRED TO AS THE DEPOSITOR), ANY LOAN OR DEPOSIT OTHERWISE THAN BY A N ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT IF, (A) THE AMOUNT OF SUCH LOAN OR DEPOSIT OR THE AGGR EGATE AMOUNT OF SUCH LOAN AND DEPOSIT ; OR (B) ON THE DATE OF TAKING OR ACCEPTING SUCH LOAN O R DEPOSIT, ANY LOAN OR DEPOSIT TAKEN OR ACCEPTED EARLIER BY SUCH PERSON FR OM THE DEPOSITOR IS REMAINING UNPAID (WHETHER REPAYMENT HAS FALLEN DUE OR NOT), THE AMOUNT OR THE AGGREGATE AMOUNT REMAINING UNPAID ; OR (C) THE AMOUNT OR THE AGGREGATE AMOUNT REFERRED TO IN CLAUSE (A) TOGETHER WITH THE AMOUNT OR THE AGGREGATE AMOUNT REFERRED TO IN CLAUSE (B), IS [TWENTY] THOUSAND RUPEES OR MORE : PROVIDED THAT THE PROVISIONS OF THIS SECTION SHALL NOT APPL Y TO ANY LOAN OR DEPOSIT TAKEN OR ACCEPTED FROM, OR ANY LOAN OR DEPO SIT TAKEN OR ACCEPTED BY, (A) GOVERNMENT ; (B) ANY BANKING COMPANY, POST OFFICE SAVINGS BANK OR CO-OPERATIVE BANK ; (C) ANY CORPORATION ESTABLISHED BY A CENTRAL, STAT E OR PROVINCIAL ACT ; IT(SS)A NOS.01/JODH/2012 09/JODH2011, 08/JODH/2011 & 02/JODH/2012 8 (D) ANY GOVERNMENT COMPANY AS DEFINED IN SECTION 6 17 OF THE COMPANIES ACT, 1956 (1 OF 1956) ; (E) SUCH OTHER INSTITUTION, ASSOCIATION OR BODY OR CLASS OF INSTITUTIONS, ASSOCIATIONS OR BODIES WHICH THE CENTRAL GOVERNMENT MAY, FOR REASONS TO BE RECORDED IN WRITING, NOTIFY IN THIS BEHALF IN TH E OFFICIAL GAZETTE : [ PROVIDED FURTHER THAT THE PROVISIONS OF THIS SECTION SHALL NOT APPL Y TO ANY LOAN OR DEPOSIT WHERE THE PERSON FROM WHOM THE LOAN OR DEPOSIT IS TAKEN OR ACCEPTED AND THE PERSON BY WHOM THE LOAN O R DEPOSIT IS TAKEN OR ACCEPTED ARE BOTH HAVING AGRICULTURAL INCOME AND NE ITHER OF THEM HAS ANY INCOME CHARGEABLE TO TAX UNDER THIS ACT.] EXPLANATION.FOR THE PURPOSES OF THIS SECTION, [(I) 'BANKING COMPANY' MEANS A COMPANY TO WHICH TH E BANKING REGULATION ACT, 1949 (10 OF 1949), APPLIES AND INCLUDES ANY BANK OR BANKING INSTITUTION REFERRED TO IN SECTION 51 OF THAT ACT ;] (II) 'CO-OPERATIVE BANK' SHALL HAVE THE MEANING ASS IGNED TO IT IN PART V OF THE BANKING REGULATION ACT, 1949 (10 OF 1949) ; (III) 'LOAN OR DEPOSIT' MEANS LOAN OR DEPOSIT OF MO NEY.] SECTION 269T READS AS UNDER :- 269T. NO BRANCH OF A BANKING COMPANY OR A CO-OPERATIVE BA NK AND NO OTHER COMPANY OR CO-OPERATIVE SOCIETY AND NO FIRM O R OTHER PERSON SHALL REPAY ANY LOAN OR DEPOSIT MADE WITH IT OTHERWISE TH AN BY AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT DRAWN IN T HE NAME OF THE PERSON WHO HAS MADE THE LOAN OR DEPOSIT IF ( A ) THE AMOUNT OF THE LOAN OR DEPOSIT TOGETHER WITH THE INTEREST, IF ANY, PAYABLE THEREON, OR ( B ) THE AGGREGATE AMOUNT OF THE LOANS OR DEPOSITS HEL D BY SUCH PERSON WITH THE BRANCH OF THE BANKING COMPANY OR CO-OPERATIVE B ANK OR, AS THE CASE MAY BE, THE OTHER COMPANY OR CO-OPERATIVE SOCIETY O R THE FIRM, OR OTHER PERSON EITHER IN HIS OWN NAME OR JOINTLY WITH ANY O THER PERSON ON THE DATE OF SUCH REPAYMENT TOGETHER WITH THE INTEREST, IF AN Y, PAYABLE ON SUCH LOANS OR DEPOSITS, IT(SS)A NOS.01/JODH/2012 09/JODH2011, 08/JODH/2011 & 02/JODH/2012 9 IS TWENTY THOUSAND RUPEES OR MORE: PROVIDED THAT WHERE THE REPAYMENT IS BY A BRANCH OF A BANKIN G COMPANY OR CO-OPERATIVE BANK, SUCH REPAYMENT MAY ALSO BE MA DE BY CREDITING THE AMOUNT OF SUCH LOAN OR DEPOSIT TO THE SAVINGS BANK ACCOUNT OR THE CURRENT ACCOUNT (IF ANY) WITH SUCH BRANCH OF THE PERSON TO WHOM SUCH LOAN OR DEPOSIT HAS TO BE REPAID : [ PROVIDED FURTHER THAT NOTHING CONTAINED IN THIS SECTION SHALL APPLY TO REPAYMENT OF ANY LOAN OR DEPOSIT TAKEN OR ACCEPTED FROM ( I ) GOVERNMENT; ( II ) ANY BANKING COMPANY, POST OFFICE SAVINGS BANK OR CO-OPERATIVE BANK; ( III ) ANY CORPORATION ESTABLISHED BY A CENTRAL, STATE O R PROVINCIAL ACT; ( IV ) ANY GOVERNMENT COMPANY AS DEFINED IN SECTION 617 OF THE COMPANIES ACT, 1956 (1 OF 1956); ( V ) SUCH OTHER INSTITUTION, ASSOCIATION OR BODY OR CL ASS OF INSTITUTIONS, ASSOCIATIONS OR BODIES WHICH THE CENTRAL GOVERNMENT MAY, FOR REASONS TO BE RECORDED IN WRITING, NOTIFY IN THIS BEHALF IN TH E OFFICIAL GAZETTE.] EXPLANATION. FOR THE PURPOSES OF THIS SECTION, ( I ) 'BANKING COMPANY' SHALL HAVE THE MEANING ASSIGNE D TO IT IN CLAUSE ( I ) OF THE EXPLANATION TO SECTION 269SS ; ( II ) 'CO-OPERATIVE BANK' SHALL HAVE THE MEANING ASSIG NED TO IT IN PART V OF THE BANKING REGULATION ACT, 1949 (10 OF 1949); ( III ) 'LOAN OR DEPOSIT' MEANS ANY LOAN OR DEPOSIT OF MO NEY WHICH IS REPAYABLE AFTER NOTICE OR REPAYABLE AFTER A PERIOD AND, IN TH E CASE OF A PERSON OTHER THAN A COMPANY, INCLUDES LOAN OR DEPOSIT OF ANY NAT URE.]] 6. NOW, LET US EXTRACT RELEVANT SECTIONS 271D AND 271E, HEREIN AS BELOW :- 271D. [(1)] IF A PERSON TAKES OR ACCEPTS ANY LOAN OR DEP OSIT IN CONTRAVENTION OF THE PROVISIONS OF SECTION 269SS , HE SHALL BE LIABLE TO PAY, BY WAY OF PENALTY, A SUM EQUAL TO THE AMOUNT O F THE LOAN OR DEPOSIT SO TAKEN OR ACCEPTED.] IT(SS)A NOS.01/JODH/2012 09/JODH2011, 08/JODH/2011 & 02/JODH/2012 10 [(2) ANY PENALTY IMPOSABLE UNDER SUB-SECTION (1) S HALL BE IMPOSED BY THE [JOINT] COMMISSIONER.] 271E. [(1)] IF A PERSON REPAYS ANY [LOAN OR] DEPOSIT R EFERRED TO IN SECTION 269T OTHERWISE THAN IN ACCORDANCE WITH THE PROVISIONS O F THAT SECTION, HE SHALL BE LIABLE TO PAY, BY WAY OF PENAL TY, A SUM EQUAL TO THE AMOUNT OF THE [LOAN OR] DEPOSIT SO REPAID.] [(2) ANY PENALTY IMPOSABLE UNDER SUB-SECTION (1) S HALL BE IMPOSED BY THE [JOINT] COMMISSIONER.] 7. WHAT FOLLOWS FROM THE CONJOINT READING OF THE AB OVE SECTIONS IS THAT THE DEPOSITOR OF ANY LOAN/DEPOSIT AND NOBODY AS MENTIONED IN SECTION 269T, WOULD REPAY AN Y LOAN/DEPOSIT, OTHERWISE THAN BY AN ACCOUNT PAYEE CHEQUE OR ACCOUNT PAYEE BANK DRAFT. MEANING THEREBY , ANY DEPOSIT OR REPAYMENT OF A LOAN/DEPOSIT IN CASH, INTER ALIA, WOULD ATTACK RIGORS OF SECTIONS 269SS AND 269 J OF THE ACT AND THE REASON FOR THAT IS THAT SUCH PARTY IS TRYING TO EVADE TAX BY NOT FOLLOWING THESE PROVISIO NS. 8. IN THESE CASES IT IS AN UNDISPUTED FACT THAT THE PENALTY PROCEEDINGS U/S. 271D/271E WERE INITIATED O N 15/04/2009 BY THE A.O. WHILE FRAMING THE FRESH BLOC K ASSESSMENT ORDER U/S. 158BC/254. THE A.O. HAS RECOR DED SUCH A FINDING IN THIS ORDER AND HAS ISSUED NOTICES ON 15/04/2009. THE INITIATION OF THESE PROCEEDINGS HAD BEEN CONFIRMED BY THE ADDL. CIT IN THE ORDER IMPOSI NG IT(SS)A NOS.01/JODH/2012 09/JODH2011, 08/JODH/2011 & 02/JODH/2012 11 PENALTY. IT IS TRUE THAT PENALTY PROCEEDING CAN BE VALIDLY INITIATED BY THE A.O. EVEN THROUGH THE POWER TO IMP OSE PENALTY LIES WITH THE JOINT CIT AS HAS BEEN HELD BY THE HONBLE APEX COURT IN THE CASE OF D.M. MANASVI VS. CIT 86 ITR 557 (SUPREME COURT). BUT, IN THE EVENT OF NO N SUSTAINABLE OF ASSESSMENT ORDER, IN WHICH INITIATIO N OF PENALTY WAS MADE, IT WOULD NOT SURVIVE AUTOMATICALL Y WHEN THE ORDER ITSELF DOES NOT SURVIVE. IN THIS REG ARD THE DECISION OF HONBLE HIGH COURT OF DELHI IN THE CASE OF CIT VS. STANDARD BRANDED LTD. 285 ITR 295 (DEL) IS RELE VANT. HOWEVER, THE DEPARTMENT MAY, IF IT IS SO ADVISED AN D LIMITATION PERMITS, INITIATE SEPARATE PENALTY PROCE EDINGS IN CASE THE FACTS SO WARRANT. BUT, WE MAY MENTION T HAT FOR INITIATION OF PENALTIES UNDER THESE SECTIONS CA N BE DONE WITHIN A REASONABLE TIME. BE THAT AS IT MAY, T HE ASSESSEE SUCCEEDS ON THIS LEGAL ISSUE. 9. ON MERITS, THE FOLLOWING CHART WOULD GIVE A 10,0 00 FOOT VIEW OF THE DETAILS REGARDING THE ADDITION MAD E BY THE A.O. AND ADDITION SUSTAINED BY THE LD. CIT(A) A ND DELETED BY HIM. THE FOLLOWING CHART WOULD GIVE A BI RDS EYE VIEW OF THE PENALTIES UNDER THESE SECTIONS, AS UNDER :- SHRI BADRI RAM CHOUDHARY DETAIL OF PENALTY U/S 271D & 271E IT(SS)A NOS.01/JODH/2012 09/JODH2011, 08/JODH/2011 & 02/JODH/2012 12 S.NO. NAME OF CREDITOR AMOUNT CONSIDERE D U/S 271D AMOUNT CONSIDERE D U/S 271E ADDITION MADE BY A.O. U/S 68 ADDITION SUSTAIN U/S 6 8 BY CIT(A) CIT(A) U/S 271D& E DELETED/SUSTAIN CIT(A) U/S 271D & E PARA PAGE AMOUNT PARA PAGE AMOUNT PARA PAGE 271D 27 1E PARA PAGE 1 JEEVAN [RAMJEEVAN] 221680 143106 121680 43106 4.8 20-21 2 JUGAL [JUGAL KISHORE] 56500 47284 565 00 47284 4.4 18-19 3 KHARIA 36500 0 DELETED DELETED 4.5 19 4 KISHORE [RAM KISHORE] 67800 20800 57 800 10800 4.6 19 5 RAJU JALLAJI 170000 0 170000 0 4.7 19 -20 6 AMRA RAM-KHARIYA 100000 0 100000 15 54 100000 20.5.XII 84 DELETED 0 4.9 21 7 BHANWAR LAL GUJJAR 75000 0 75000 15 54 75000 20.5.XII 84 DELETED 0 4.9 21 8 PARSA RAM 36000 26000 36000 15 54-55 36000 20.5.XII 84 DELETED DELETED 4.9 21 9 PRADHAN JI- PIPAR 445000 0 445000 15 54 445000 20.5.XII 84 DELETED 0 4.10 21 10 RAM JEEVAN 200000 0 200000 15 54 200000 20.5.XII 84 DELETED 0 4.3.1 17 11 SAMPAT RAJ RAKA 30000 0 30000 15 54 30000 20.5.XII 84 DELETED 0 4.10 21 12 SAYA JI 199000 0 199000 15 54 199000 20.5.XII 84 DELETED 0 4.10 21 13 SOHAN RAM PRAJAPAT 50000 0 DELETED 0 4.11 22 14 BHURARAM 50000 0 50000 14 49 50000 20.5 77 DELETED 0 4.12 22 15 PRAM SINGH 50000 0 50000 14 49 DELETED 0 4.12 22 16 DAVARAM 50000 0 50000 14 49 50000 20.5 77 DELETED 0 4.12 22 17 RAM JEEVAN JI 23500 5301 23500 14 49 DELETED DELETED 4.3.1 17 18 ASHOK JI SIROHI 100000 0 100000 14 49 100000 20.5.IV 81 DELETED 0 4.12 22 19 RAMESHWAR JI MAHARAJ 210000 0 210000 14 49 210000 20.5.IV 81 DELETED 0 4.12 22 20 RAM JEEVAN JI 895175 15000 880175 880175 20.5.IV 81 DELETED DELETED 4.3.1 17 21 GANPAT RAM 365300 353300 228000 14 50 228000 20. 5.VII 82 137300 125300 4.12 22 22 RAM JEEVAN JI 3024509 2282915 2324085 14 49-51 2 324085 20.5.VII 82 700424 DELETED 4.3.2 17-18 23 UGAWAJ JI BIDIWALE 1520000 1425000 689000 14 50- 51 689000 20.5.VII 82 831000 736000 4.13 22-23 24 SURESH JI SAMDARIYA 403000 403000 212000 14 50 2 12000 20.5.VII 82 191000 191000 4.14 23-24 25 SWAI JI 71000 71000 50000 14 50 50000 20.5.VII 8 2 21000 21000 4.15 24 26 TULCHA RAM 30000 30000 30000 30000 4 .16 24 27 BHOOM KIRANA STORE 206000 206090 186000 13.1 43- 47 186000 20.5.X 84 20000 20090 4.17 25 28 GANPAT JI 35000 35000 35000 13.1 44 35000 20.5.X 84 DELETED DELETED 4.18 25 29 KUSHAL TYRE 25000 25000 25000 25000 4.19 25 30 SURESH JI 139000 139000 139000 14 49 139000 20.5.VI 82 DELETED DELETED 4.18 25 31 UJJAWAL JI 1545000 1325000 1545000 13.1 43-47 1545000 20.5.X 84 DELETED DELETED 4.2 25-26 32 RAM JEEVAN CHOUDHARY 202390 135540 DELETED DELETED 4.3.1 17 33 CFC SHIMBUPURA 621000 621000 621000 13.1 44 621000 20.5.X 84 DELETED DELETED 4.21 26 34 GAURAV 160000 160000 160000 13.1 45 160000 20.5.X 84 DELETED DELETED 4.22 26-27 35 LANGAR BIDI 99500 39000 100500 13.1 46 - 47 100500 20.5.X 84 DEL ETED DELETED 4.22 26 - 27 36 MAHADEV TRACTORS 121000 30000 270000 13.1 45 270 000 20.5.X 84 121000 30000 4.22 26-27 37 SHER MOHD. 80000 80000 80000 80000 4 .19 25 38 HARIYASI PETROLEUM CENTRE 297976 290000 297976 290000 4.23 27 39 PETROLEUM CENTRE SIROHI 60000 0 AGAINST PETROLEUM PRODUCT SUPPLY DELETED DELETED 4.24 27 40 MAHAMUD KHAN FITER 20000 0 DELETED DELETED 4.25 28 41 MARUDHAR INDIA 43352 0 DELETED DELETED 4.24 28 42 NEW VOLVO A/C 60881 0 DELETED DELETED 4.25 28 12196063 7908336 9008260 8934760 2860680 1649580 IT(SS)A NOS.01/JODH/2012 09/JODH2011, 08/JODH/2011 & 02/JODH/2012 13 10. THUS, IT BECOMES EVIDENT THAT THE LD. CIT(A) HA S SUSTAINED A PENALTY OF RS. 28,60,680/- UNDER SECTIO N 271D AND OF RS. 16,49,580/- U/S 271E IN RESPECT OF DEPOSITS/WITHDRAWALS (REPAYMENTS). THE ARGUMENT OF LD. A.R. SHRI JAIN THAT WHEN THE IMPUGNED ADDITION WERE MADE BY THE A.O. U/S 68 AND THE PEAK THEORY WAS APPLIED, BUT THESE CREDITS HAVE BEEN HELD TO BE INGENUINE THEN THESE AMOUNTS ARE TO BE TREATED AS BELONGING TO THE ASSESSEE AND WHEN THE AMOUNTS BELONGING TO THE ASSESSEE HOW PENALTIES U/S. 271D A ND 271E CAN BE IMPOSED. WE HAVE SEEN THE RECORD AND AR E SATISFIED ABOUT THE SUBMISSION OF LD. A.R. THE FOLL OWING DECISIONS SUPPORT OUR FINDING THAT WHEN ADDITION IS MADE U/S. 68 OF THE ACT PENALTY UNDER SECTIONS 271D AND 271E IS NOT EXIGIBLE :- A) NARAYAN RAM CHHABA V/S ITO 96 ITD 163(TM) JODHPUR. B) GIRISH MISHRA V/S ACIT 91 TTJ 643 (ALL) C) CIT V/S STANDARD BRANCDS, 285 ITR 295 (DEL) D) DIWAN ENTERPRISES V/S CIT, 246 ITR 571 (DEL) E) CIT VS. TANDARD BRANDS LTD., 285 ITR 295 (DEL) 11. MOREOVER, THE ASSESSEE ALSO CLAIMED REASONABLE CAUSE IN RESPECT OF THE FOLLOWING PARTIES AND WHEN THERE IS A REASONABLE CAUSE NO PENALTY U/S. 271D AND 271E CAN IT(SS)A NOS.01/JODH/2012 09/JODH2011, 08/JODH/2011 & 02/JODH/2012 14 BE IMPOSED IN THE LIGHT OF THE DECISION OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS MAN OJ LALWANI, 260 ITR 590 (RAJ.) THESE ARE THE PARTIES I N WHOSE CASE CASH PAYMENT STAND EXPLAINED :- 1. RAJU JALAJI 2. TULCHA RAM 3. KUSHAL TYRES 4. MAHADEV TRACTORS 5. SHER MOHAMMED 6. HARIYASI PETROLEUM CENTRE 12. IN VIEW OF THE ABOVE DISCUSSION, ON MERITS ALSO , NO PENALTY U/S. 271D OR U/S. 271E IS IMPOSABLE IN THIS CASE. ACCORDINGLY, WE ORDER DELETION OF THE ENTIRE PENALT IES LEVIED U/S. 271D OR U/S. 271E IN THESE CASES. THE GROUNDS OF REVENUES APPEAL ALSO GET DECIDED BY OUR ABOVE FINDINGS. 13. AS A RESULT, WE ALLOW BOTH THE APPEALS OF THE ASSESSEE AND DISMISS BOTH THE APPEALS OF THE REVENU E. (ORDER PRONOUNCED IN THE OPEN COURT ON 28.11.2013) SD/- SD/- (N.K.SAINI) (HARI OM MARATHA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 28 TH NOVEMBER, 2013 IT(SS)A NOS.01/JODH/2012 09/JODH2011, 08/JODH/2011 & 02/JODH/2012 15 PBN/* COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CONCERNED BY ORDER 4. THE CIT CONCERNED 5. THE D.R., ITAT JODHPUR BENCH ASSISTANT REGISTRAR ITAT, JODHPUR