MUKESH JAIN ,JODHPUR V. ITO, WARD-3(1), JODHPUR

ITA 203/JODH/2024

AI Insights

This case involves an appeal by Sh. Mukesh Jain against the order of the ld. CIT(A), which upheld a penalty imposed under section 271D of the Income Tax Act, 1961 for violating section 269SS. The penalty was imposed due to a cash transaction of Rs. 40,00,000, which was not permissible under section 269SS. The assessee contested the penalty, arguing that it was barred by limitation and not passed by a competent authority. The CIT(A) dismissed the appeal ex-parte due to non-compliance with notices, and the ITAT found that the CIT(A) had not adequately considered the merits of the case. The ITAT's decision to remand the case back to the CIT(A) was based on the need for a thorough examination of the evidence and proper consideration of the assessee's submissions.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 471465 (ITAT-JODHPUR)
• Duration Of Justice: 7 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 17-10-2024
• Assessment Year: 2013-2014
• Appeal Filed On: 01-04-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KARNI DAN
• Assessee Lawyers: T.C. GUPTA
• Keywords: Opportunity of being heard; Reasonable cause; Non compliance
• Section: 143(3); 250; 131; 274; 271D

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR. BEFORE: DR. S. SEETHALAKSHMI, JJUDICIAL MEMBER & SHRI RATHOD KAMLESH JAYANTBHAI, ACCOUNTANT MEMBER I.T.A. No.203/Jodh/2024 Assessment Year: 2013-14 Sh. Mukesh Jain 26, 1st Road, Shiv Shakti nagar, O/s Mahamandir, Jodhpur. [PAN: ADCPJ1554H ] (Appellant) Vs. The ITO, Ward-3(1), Jodhpur. (Respondent) Appellant by Sh. T.C. Gupta, Adv. Respondent by Sh. Karni Dan, Addl.CIT Date of Hearing 17.10.2024 Date of Pronouncement 27.11.2024 ORDER Per:DR. S. Seethalakshmi, JM: This appeal is filed by the assessee aggrieved from the order of the Ld. CIT(A), National Faceless Appeal Centre, Delhidated 05.03.2024 [Here in after referred as “CIT(A)/NFAC”] for the assessment year 2013-14, which in turn arise from the order dated 18.03.2022 passed under section 271D of the Income Tax Act,1961 [ for short “Act” ] by the AO. 2. In this appeal, the assessee has raised following grounds: - ITA No.203/Jodh/2024 Sh. Mukesh Jain 2 “1. The CIT(A) erred in dismissing the appeal of the assessee without considering the grounds of appeal. 2. The CIT(A) erred in dismissing the appeal of the assessee without considering the fact that the penalty imposed was barred by limitation. 3. The CIT(A) erred in confirming the penalty order not passed by a competent authority of jurisdiction. 4. The CIT(A) erred on confirming the penalty order which was passed without application of mind.” 3. Brief facts of the case are that in this case, penalty proceedings u/s 271D was initiated on 23.03.2020 and accordingly, notice 274 read with section 271D of the I.T. Act was issued on 23.03.2020. This notice was delivered to the assessee on 25.03.2020 through email. No response to this notice was filed by the assessee. In the interest of natural just, a show cause penalty notice dated 20.05.2021 was issued fixing compliance on 28.05.2021. This notice was delivered to the assessee through email. In response to this notice the assessee has submitted reply on 24.05.2021. The reply of the assessee was considered. In view of the request of the assessee a fresh show notice dated 20.12.2021 was issued fixing compliance on 03.01.2022. This notice was delivered to the assessee through email. The assessee has not uploaded any reply in response to the said notice. It is obvious from the above that enough opportunity were provided to the assessee to submit his reply but the assessee has said nothing against imposition of penalty u/s 271D of the I. T. Act, 1961 other than only seeking adjournment which has already been considered and further opportunity was provided to him. ITA No.203/Jodh/2024 Sh. Mukesh Jain 3 Therefore, it is obvious that the assessee has nothing to say against imposition of penalty u/s 271D. Thus, the penalty proceedings was decided on merit on the basis of materials available with the department.It has been noticed that the assessment in this case was completed u/s 143(3) of the I. T. Act, 1961 on 16.02.2016 at the total income of Rs. 5,00,700/- against the returned income of Rs. 3,96,020/-. 4. It was pertinent to mention here that the Assessing Officer has referred the matter in violation of section 269SS of the I. T. Act, 1961 by the assessee to the Joint Commissioner of Income Tax, Range-3, Jodhpur. It is obvious from the facts referred that the assessee has violated the provisions of section 269SS of the Act because the assessee has made transaction of Rs. 40,00,000/- in cash. Therefore, the assessee was liable for imposition of penalty u/s 271D of the Act. Therefore, it was clear that the assessee has violated the provisions of section of 269SS of the Act and the assessee has also admitted the receipt of amount of Rs. 40,00,000/- by writing an agreement which has been pasted in the order and he has submitted nothing against the show cause notice issued. Therefore, the assessee was considered liable for imposition of penalty. Looking to the facts and circumstances of the case as per provisions of section 271D the penalty of Rs. 40,00,000/- was imposed upon the assessee u/s 271D of the Act. ITA No.203/Jodh/2024 Sh. Mukesh Jain 4 5. Being aggrieved by the order of the AO, the assessee filed an appeal before the ld. CIT(A). The Ld. CIT(A) observed that notices were issued on 16.11..2022, 31.01.2024, 13.02.2024 & 22.02.2024 requiring the assessee to file the details in support of grounds taken by the assessee. Since the assessee has not complied with the notices issued by the Id. CIT(A), he has dismissed the appeal of the assessee ex-parte order. The extract of the orderof the ld. CIT(A) is reproduced as under:- “11. I have carefully considered the facts and circumstances of the case. In the absence of appellant's reply to hearing notices u/s. 250 of the Income-tax Act, 1961 the appellant's Grounds of appeal are perused as made available on ITBA portal/Form 35 etc. The order u/s. 271D dated 18.03.2022 against which this appeal is filed, is carefully perused. 11.1 The issue is whether the assessee can be held liable for violation of provisions of section 269SS r.w.s. 271D of the Act or not? For that purposes, what is required, is the assessee should receive the specified sum by way of cash. In the present case, in the proceeding of Shri JaiduttSharma, statement was recorded on oath u/s 131 and agreement was also submitted that establishes that the appellant shri Mukesh jain has taken cash loan of Rs 40,00,00/- from shri jaiduttsharma. As theappellant has received specified sum in cash and therefore, there was a violation ofprovisions of section 269SS r.w.s. 271D of the Act. 11.2 Through statement of facts and Grounds of appeal appellant has contested that he has never received any amount from shri Jai Dutt sharma. He has also alleged that for same amount of loan his wife is also penalized. Thus two persons can't be penalized for the same mistake. The appellant has also referred to pendency of some matter in the court case. But during appellate proceedings appellant remained non compliant to the notices issued. The appellant neither furnished any submissions and documents to support his contention so raised in grounds of appeal. nor explained any reasonable cause for accepting the consideration/loan in cash. Thusappellant has not been able to furnish the evidencesto contravene the assessing officer's order. Despite the fact, time and again opportunity was given to appellant to file his submission. The appellant can be said to have discharged its onus only if the appellant has given all the necessary details. Mere denial by assessee, also does not lend any credibility. This in the light ITA No.203/Jodh/2024 Sh. Mukesh Jain 5 of these facts, appellant's claim as made in Grounds of Appeal for its relief on merits is alsonot explainable as no new facts/evidences/documents are made available. 11.3 In view of above, The assessee was not having any reasonable cause for accepting the loan consideration, which is more than Rs.20,000/- by way of cash. Thus there was a violation of provisions of section 269SS r.w.s. 271D of the Act. Thus penalty levied u/s 271D is hereby upheld. Thus Ground No. 1 to 5 are dismissed. 12. In result, the appeal of the appellant is dismissed.” 6. During the course of hearing, the ld. AR for the assessee prayed that the Id. CIT(A) and the AO has passed the ex-parte order and the assessee was not provided adequate opportunity of being heard. Thus, the assessee may be provided one more opportunity to advance his arguments/submissions before the ld. AO in the interest of equity and justice. 7. Per contra, ld. DR objected to the prayer of the assessee and submitted that the assessee did not represent case before the ld. AO but before CIT(A) did not produce any submission. Therefore, in that case the matter be remanded to the ld. CIT(A). 8. We have heard both the parties and perused the materials available on record. The Bench noted that the ld. CIT(A) has not considered the merit while passing the order and has simply confirmed the finding of the ld. AO. Further, the ld. CIT(A) has simply stated that the assessee has submitted the submission but not furnished evidence which can explain the source of cash deposit. However, the Bench feels that the assessee could not advance his arguments/submissions without any evidence to contest the case before the ITA No.203/Jodh/2024 Sh. Mukesh Jain 6 lower authorities and have considered the prayer to give one more opportunity to submit the evidences concerning the issue in question, with grounds so raised by the assessee, to decide it afresh by providing one more opportunity of hearing that to before the ld. CIT(A). Considering the overall facts of the case the Bench feels that let the assessee place on record all the evidence before the ld. CIT(A) to justify the deposit of cash. However, the assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings before the ld. CIT(A). 9. Before parting, we may make it clear that our decision to restore the matter back to the file of the ld. CIT(A) shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by the ld. CIT(A) independently in accordance with law. In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 by placing the details on the notice board. Sd/- Sd/- (RathodKamleshJayantbhai) (DR. S. Seethalakshmi) Accountant Member Judicial Member Santosh- Sr. P.S Dated: 27/11/2024 ITA No.203/Jodh/2024 Sh. Mukesh Jain 7 Copy of the order forwarded to: (1)The Appellant (2) The Respondent (3) The CIT (4) The CIT (Appeals) (5) The DR, I.T.A.T. True Copy By order Asstt. Regisrtrar "