M/s.Hindalco Employees Co-op Credit Society Ltd, Kalamasserry V. The ADCIT, Cochin

MA 104/COCH/2014

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4414 (ITAT-COCHIN)
• Duration Of Justice: 4 year(s) 7 month(s) 18 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 13-05-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 12-04-2019
• Assessment Year: 2007-2008
• Appeal Filed On: 25-09-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: A S BINDHU
• Keywords: Search and seizure; Bonafide belief; Reasonable cause

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFOR E S/ SHRI CHANDRA POOJARI , AM & GEORGE GEORGE K., J M M.P. NO. 104 /COCH/201 4 ( I .T . A. NO . 812/ COCH/201 3 ) ASSESSMENT YEAR : 200 7 - 08 HINDALCO E MPLOYEES CO - OPERATIVE CREDIT SOCIETY, NO.3304,ALUPURAM, KALAMASSERY - 683 104. [PAN:AA BFT 5959Q] VS. THE ADDITIONAL COMMISSIONER OF INCOME - TAX, RANGE - 4, KOCHI (ASSESSEE - APPELLANT) (REVENUE - RESPONDENT) A SSESSEE BY SMT. PARVATHY AMMAL, CA REVENUE BY SMT. A.S. BINDHU, SR. DR D ATE OF HEARING 10/05/2019 DATE OF PRONOUNCEMENT 13 /0 5/2019 O R D E R PER CHANDRA POOJARI, AM: BY THIS MISCELLANEOUS PETITION, THE ASSESSEE SEEKS TO RECALL THE ORDER OF THE TRIBUNAL IN ITA NO. 812 /COCH/201 3 DATED 25 / 07 /201 4. 2. THE LD. AR SUBMITTED THAT THE PETITIONER IS A C O - OPERATIVE SOCIETY OF THE EMPLOYEES OF M/S. HINDALCO INDUSTRIES LTD. IT WAS SUBMITTED THAT T HE AMOUNTS WERE ACCEPTED FROM THE MEMBERS AND LENT ONLY TO THE MEMBERS WHO ARE EMPLOYEES OF THE CO MPANY , PRINCIPLE OF MUTUALITY WAS APPLICABLE. FOR THE ASSESSMEN T YEAR 2007 - 08 , IT WAS SUBMITTED THAT THE PETITIONER FILED THE RETURN OF INCOME ON 10.3.2008 DECLARING A TOTAL INCOME OF RS. 2,59,830 / - AND THE ASSESSMENT WAS COMPLETED VIDE M.P. NO . 104 /COCH/201 4 2 ORDER DATED 23.12.2009 ACCEPTING THE RETURN FILED. SUBSEQUENTLY , ACTION WAS INITIA TED BY THE ADDL. COMMISSIONER, INCOME TAX AS PER ORDER U/S 271 D OF THE ACT DT. 17. 0 8 .2011 IMPOSING A PENALTY OF RS. 74,56,185/ - ON THE GROUND THAT A MAJOR CHUNK OF THE FIXED DEPOSITS ARE RECEIVED IN CASH, IN VIOLATI ON OF PROVISIONS OF SECTION 269 SS . 2. 1 AGAINST THE SAID ORDER , APPEAL WAS FILED BEFORE THE CIT (A). THE LEARNED CIT (A) CONFIRMED THE LEVY OF PENALTY VIDE ORDER DATED 18.10.2013. 2. 2 IT WAS SUBMITTED THAT THE PETITIONER FILED A SECOND APPEAL BEFORE THE TRIBUNAL AGAINST THE SAID ORDER OF PENALTY AND THE TRIBUNAL VIDE ORDER DATED 25 .0 7 . 2014 DISMISSED THE APPEAL FILED BY THE PETITIONER . IT WAS SUBMITTED THAT THERE ARE CERTAIN APPARENT MISTAKES ON THE FACE OF THE SAID ORDER AND THE LEVY OF PENALTY WAS NOT CORRECT FOR VARIOUS REASONS AND THE REFORE, THE PETITIONER WAS HEREWITH SUBMITTING A PETITION FOR RECTIFICATION U/S 254 (2) OF THE INCOME TAX ACT TO MODIFY THE ABOVE ORDER AND CANCEL THE LEVY OF PENALTY. 2. 3 THE LD. AR SUBMITTED THE FOLLOWING POINTS FOR KIND CONSIDERATION BY THIS BENCH: A) INCOME OF THE SOCIETY IS FROM INTEREST RECEIV ED ON LOANS GIVEN TO MEMBERS. THE INCOME OF THE SOCIETY IS FROM INTEREST RECEIVED ON LOAN GIVEN TO ITS MEMBERS. AND THE SAID INCOME IS DEDUCTIBLE U/S 8 OP. M.P. NO . 104 /COCH/201 4 3 B) THE PETITIONER HAD RELIED ON THE DECISION OF T HE SUPREME COURT IN THE CASE OF ASST, DIRECTOR, INSPECTION (INV.) VS. KUM. A.B.SHANTHI REPORTED IN 255 ITR 258. IN THE SAID JUDGMENT IT HAS BEEN HELD AS FOLLOWS: ' THE OBJECT OF INTRODUCING SECTI O N 269S S IS TO ENSURE THAT A TAX PAYER IS NOT ALLOWED TO GI VE FALSE EXPLANATI ON FOR HIS UNACCOUNTED MONEY, OR IF HE HAS GIVEN SOME FALSE ENTRIES IN HIS ACCOUNTS, HE SHALL NOT ESCAPE BY GIVING FALSE EXPLANATION FOR THE SAME. DURING SEARCH AND SEIZURES, UNACCOUNTED MONEY IS UNEARTHED AND THE TAX PAYER WOULD USUALLY GIVE THE EXPLANATION THAT HE HAD BORROWED OR RECEIVED DEPOSITS FROM HIS RELATIVES OR FRIENDS AND IT IS EASY FOR THE SO - CALLED LENDER ALSO TO MANIPULATE HIS RECORDS LATER TO SUIT THE PLEA OF THE TAX - PAYER. THE MAIN OBJECT OF SECTION 269SS WAS TO CURB THIS M ENACE.' 2. 4 IT WAS SUBMITTED BY THE LD. AR THAT F ROM THE ABOVE IT WAS CLEAR THAT THE OBJECT OF 269SS IS TO ENSURE THAT THE TAXPAYER IS NOT ALLOWED TO GIVE FALSE EXPLANATION FOR HIS UNACCOUNTED MONEY AS ENUNCIATED BY THE S UPREME COURT. THEREFORE, ACC ORDING TO THE LD. AR, IN CASES WHERE THERE IS NO QUESTION OF UNACCOUNTED MONEY BEING RECEIVED IN THE GUISE OF LOAN, THE RECIPIENT IS NOT BE THRUST WITH THE BURDEN OF PENALTY U/S 269SS. IN THE PRESENT CASE , THE PETITIONER HAD FURNISHED COMPLETE DETAILS REGA RDING NAME AND ADDRESS OF THE PAYER, EMPLOYEE BADGE NUMBER AND AMOUNT HAD BEEN FURNISHED. FURTHER , THE PETITIONER HAD ALSO ISSUED RECEI PT FOR ALL THE DEPOSITS RECEIVED BY THE PETITIONER. IT WAS SUBMITTED THAT THESE FACTS ARE UNCONTROVERTED AND T HE REAS ON FOR ACCEPTANCE OF LOAN BY CASH WERE EXPLAINED . IN THESE CI RCUMSTAN C ES, IT WA S PRAYED THAT THE FINDING OF THE TRIBUNAL MAY KINDLY BE RECONSIDERED. IT WAS SUBMITTED THAT T HE RATIO OF THE DECISION OF THIS TRIBUNAL IS NOT IN CONFORMITY WITH THE FINDING OF THE SUPREME COURT IN THE CASE OF KUM. A.B. SHANTHI CITED SUPRA. IT WAS SUBMITTED THAT THE PETITIONER HAD RELIED ON NUMBER OF DECISIONS INCLUDING THE DECISION OF THE IT AT, HYDERABAD IN THE CASE OF CITIZEN CO - OPERATIVE M.P. NO . 104 /COCH/201 4 4 SOCIETY LIMITED VS. ADDL.CIT ( 41 DTR 3 05 ) TO ESTABLISH THAT THERE WAS REASONABLE CAUSE IN THE CASE OF THE PETITIONER. THE TRIBUNAL HAS NOT CONSIDERED THE SAID DECISIONS AND GIVEN A CLEAR FINDING AS TO WHY THE RATIOS IN THE ABOVE JUDGMENTS ARE NOT APPLICABLE IN THE P ETIT I ONER'S CASE . IT WAS SU BMITTED THAT IF THE RATIOS IN THE SAID JUDGMENTS ARE CONSIDERED IN DETAIL, IT IS VERY CLEAR THAT IN THIS CASE : (I) T HERE IS BONAFIDE BELIEF TO ACCEPT DEPOSITS IN CASH (II) G ENUINENESS OF TRANSACTION IS PROVED. (III) IDENTITY OF PERSONS ARE GIVEN AN D (IV) THE MOST IMPORTANT POINT IS ALL THE DEPOSITORS ARE INCOME TAX ASSESSEES AND THEIR PAN NOS. HAVE ALSO BEEN FURNISHED, (V) ALL THESE RE - PAYMENTS ARE MADE ONLY BY WAY OF ACCOUNT PAYEE CHEQUE WHICH ALONE IS SUFFIC IENT TO PROVE THE GENUINENESS AND IDE NTITY OF THE PERSONS, (VI) THE SOCIETY IS ALSO AN INCOME TAX ASSESSEE AND THE DEPARTMENT HAS NO CASE THAT THESE LOANS ARE NOT GENUINE, (VII) SECTION 269 T IS NOT ATTRACTED. 2.5 THUS, IT WAS SUBMITTED THAT NON - CONSID ERATION OF ALL THE ABOVE FACTS IS AN A PPARENT MISTAKE ON THE FACE OF THE RECORD. THE TRIBUNAL HAS NOT CONSIDERED EITHER THE LEGAL ISSUES /FACTS , WHICH IS A MISTAKE APPARENT ON THE FACE OF THE RECORD , WHICH HAS TO BE RECTIFIED U/S 254 (2) OF THE INCOME TAX ACT. IT WAS THEREFORE PRAYED THAT THE LE TRIBUNAL MAY BE PLEASED TO KINDLY RECTIFY THE MISTAKES APPARENT ON THE FACE OF THE RECORD AND PASS APPROPRIATE ORDERS ALLOWING THE APPEAL. M.P. NO . 104 /COCH/201 4 5 3. THE LD. DR SUBMITTED THAT THERE IS NO MISTAKE APPARENT FROM RECORD SO AS TO RECTIFY THE ORDER OF THE TRIB UNAL. 4 . WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. BY THIS MISCELLANEOUS PETITION, THE ASSESSEE SEEKS TO RE VIEW THE ORDER OF THE TRIBUNAL FOR WHICH THE TRIBUNAL HAS NO POWER. ON AN EARLIER OCCASION, THE TRIBUNAL WHILE PASSING THE ORD ER, HAD CONSIDERED THE ENTIRE FACTS OF THE CASE AND DECIDED THE ISSUE AGAINST THE ASSESSEE. NOW, THE LD. AR WANTS TO RE - ARGUE THE CASE. IN OUR HUMBLE OPINION, THERE IS NO PROVISION UNDER SECTION 254(2) OF THE ACT SO AS TO ALLOW THE ASSESSEE TO RE - ARGUE TH E CASE. IN OUR OPINION, THE DECISION OF THE TRIBUNAL HAS NOT TO BE SCRUTINIZED SENTENCE BY SENTENCE MERELY TO FIND OUT WHETHER ALL FACTS HAVE BEEN SET OUT IN DETAIL BY THE TRIBUNAL OR WHETHER SOME INCIDENTAL FACT WHICH APPEARS ON THE RECORD HAS NOT BEEN N OTICED BY THE TRIBUNAL IN ITS JUDGMENT. IN OUR OPINION, T HE TRIBUNAL HAS CONSIDERED ALL THE RELEVANT MATERIALS AND HAS NOT TAKEN INTO ACCOUNT ANY IRRELEVANT MATERIAL IN BASING ITS CONCLUSION. IT IS NOT NECESSARY FOR THE TRIBUNAL TO STATE IN ITS JUDGMENT SPECIFICALLY OR IN EXPRESS WORDS THAT IT HAS TAKEN INTO ACCOUNT THE CUMULATIVE EFFECT OF THE CIRCUMSTANCES OR HAS CONSIDERED THE TOTALITY OF THE FACTS, AS IF THAT WERE A MAGIC FORMULA; IF THE JUDGMENT OF THE TRIBUNAL SHOWS THAT IT HAS, INFACT, DONE SO, THE RE IS NO REASON TO INTERFERE WITH THE DECISION OF THE TRIBUNAL. FURTHER, IN THE CASE OF CITIZEN CO - OPERATIVE SOCIETY L IMITED VS. ADDL. CIT CITED SUPRA, IT WAS A CO - OPERATIVE BANK WHICH RECEIVED MONEY FROM THE MEMBERS/DIRECTORS IN THE COURSE OF BANKING ACT IVITIES WHICH CANNOT BE CONSIDERED AS LOAN O R DEPOSITS SO AS TO ATTRACT THE PROVISIONS OF SECTION 269SS OR 269T OF THE ACT. M.P. NO . 104 /COCH/201 4 6 HENCE, THIS PROPOSITION CANNOT BE APPLIED TO THE ASSESSEE CASE. I N VIEW OF THIS, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF T HE TRIBUNA L . 5 . IN THE RESULT, THE MISCELLANEOUS PETITION FILED BY THE ASSESSE E IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 13 TH MAY, 2019. SD/ - SD/ - (GEORGE GEORGE K.) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 13 TH MAY, 2019 GJ COPY TO : 1 . HINDALCO E MPLOYEES CO - OPERATIVE CREDIT SOCIETY, NO.3304, ALUPURAM, KALAMASSERY - 683 104. 2. THE ADDITIONAL COMMISSIONER OF INCOME - TAX, RANGE - 4, KOCHI. 3 . THE COMMISSIONER OF INCOME - TAX (AP P EALS) , THRISSUR. 4. THE PR. COMMISSIONER OF INCOME - TAX, THRIS SUR. 5 . D. R., I.T.A.T., COCHIN BENCH, COCHIN. 6 . GUARD FILE. BY ORDER (ASSISTANT REGISTRA R) I.T.A.T., COCHIN