SHRI RAM KISHAN VERMA, Kota V. ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE-1, Kota

SA 25/JPR/2019

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 3800 (ITAT-JAIPUR)
• Duration Of Justice: 11 day(s)
• Appeal Type: Income Tax (International Taxation) Appeal
• Pronouncement Date: 29-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2015-2016
• Appeal Filed On: 18-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: P.P. MEENA
• Assessee Lawyers: ROHIT TIWARI ADVS
• Keywords: Search and seizure; Salary income; Application of stay
• Section: 271D

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES A, JAIPUR JH JES'K LH 'KEKZ] YS[KK LNL; ,OA JH FOT; IKY JKO] U;KF;D LNL; DS LE{K BEFORE: SHRI RAMESH C SHARMA, AM & SHRI VIJAY PAL RAO, JM S.A. NO. 25/JP/2019 (ARISING OUT OF ITA NO. 405/JP/2019) FU/KZKJ.K O'KZ@ ASSESSMENT YEAR : 2015-16 SHRI RAM KISHAN VERMA, A-33, TALWANDI, KOTA. C UKE VS. ADDL. C.I.T., RANGE-1, KOTA. LFKK;H YS[KK LA -@THVKBZVKJ LA-@ PAN/GIR NO.: ADDPK 1093 R VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS @ ASSESSEE BY : SHRI MAHENDRA GARGIEYA & SHRI ROHIT TIWARI (ADVS) JKTLO DH VKSJ LS @ REVENUE BY : SHRI P.P. MEENA (ADDL.CIT). LQUOKBZ DH RKJH[K@ DATE OF HEARING : 03/05/2019 MN~?KKS 'K.KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 03/05/2019 VKNS'K@ ORDER PER: R.C. SHARMA, A.M. THIS STAY APPLICATION AROSE OUT OF THE APPEAL FILED BEFORE THE TRIBUNAL ON 26/3/2019 AGAINST THE ORDER OF THE LD. CIT(A), KOTA DATED 22/01/2019 FOR THE A.Y. 2015-16 IN THE MATTER OF IMPOSITION OF PENALTY U/S 271D OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. IT WAS ARGUED BY THE LD. AR OF THE ASSESSEE THAT THE A.O. HAS WRONGLY IMPOSED PENALTY U/S 271D IN RESPECT OF A PROPOSED TRANSACTION S.A. NO. 25/JP/2019 RAM KISHAN VERMA VS. ADDL.CIT 2 WHICH WAS NEVER CONCLUDED. HE FURTHER SUBMITTED THAT BOTH THE ALLEGED PARTIES TO THE ALLEGED TRANSACTION DENIED HAVING GIVEN / TAKEN ANY LOAN. MR. D.P. SEHGAL AT WHOSE PREMISES SEARCH WAS CONDUCTED HAD CATEGORICALLY DENIED HAVING GIVEN OR ARRANGE ANY LOAN OR DEPOSIT FOR THE ASSESSEE AND THE ASSESSEE ALSO DENIED HAVING RECEIVED ANY LOAN FROM MR. D.P. SEHGAL. AS PER THE LD AR, THE DOCUMENTS RELIED UPON BY THE ADDL. CIT AND AO ARE NOT SPECIFIC AND DID NOT SHOW THAT THE LOAN WERE ACTUALLY TAKEN IN CASH. 3. THE LD AR HAS FURTHER ARGUED THAT IT WAS ONLY A PROPOSED TRANSACTION WHICH COULD NEVER BE CONCLUDED. THUS, THE REVENUE COMPLETELY FAILED TO ESTABLISH THAT SOME LOANS / DEPOSITS WAS ACTUALLY- PHYSICALLY AND LEGALLY TAKEN / ACCEPTED BY THE ASSESSEE. THE IMPUGNED PENALTY U/S 271D WAS ILLEGALLY IMPOSED BASED ON AN ACTION, WHICH WAS NOT INITIATED DURING THE COURSE OF ANY PROCEEDING PENDING BEFORE THE ID. ADDL. CIT, RANGE-1, KOTA. THE ABSENCE OF THE PROCEEDINGS BEING A CONDITION PRECEDENT ANY ACTION TAKEN FOR THE INITIATION OF THE IMPUGNED PENALTY, IS COMPLETELY WITHOUT JURISDICTION AND DESERVES TO BE FULLY QUASHED. 4. IT WAS ALSO CONTENDED THAT THE ASSESSEE HAS ALREADY PAID TAX DEMAND OF MORE THAN RS. 3.00 CRORES AND PRESENTLY RUNNING INTO A BAD S.A. NO. 25/JP/2019 RAM KISHAN VERMA VS. ADDL.CIT 3 FINANCIAL POSITION AND IF AN INTERIM STAY IS NOT GRANTED BY RESTRICTING THE DEPARTMENT FROM TAKING FURTHER COERCIVE MEASURE WILL CAUSE A SERIOUS HARDSHIP AND IRREPARABLE LOSS TO THE ASSESSEE. ACCORDINGLY, IT WAS PRAYED THAT THE STAY SHOULD BE GRANTED FOR RECOVERY OF BALANCE AMOUNT OF DEMAND AND EARLY HEARING BE GRANTED TO THE ASSESSEE. 5. ON THE OTHER HAND, THE LD DR HAS STRONGLY OPPOSED THE STAY APPLICATION AND CONTENDED THAT ON THE BASIS OF INCRIMINATING DOCUMENTS FOUND DURING THE COURSE OF SEARCH AT THE PREMISES OF MR.D.P. SEHGAL, THE A.O. HAS CORRECTLY LEVIED PENALTY U/S 271D OF THE ACT IN RESPECT OF CASH LOAN TAKEN BY THE ASSESSEE. HE FURTHER SUBMITTED THAT BEFORE GRANTING STAY, THE ASSESSEE SHOULD BE ASKED TO DEPOSIT AT LEAST 30% MORE OF THE BALANCE DEMAND. 6. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AS WELL AS STAY APPLICATION FILED BY THE ASSESSEE. FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUAL, HAVING SHOWN INCOME UNDER THE HEAD 'SALARY INCOME FROM HOUSE PROPERTY, INTEREST INCOME AND INCOME FROM OTHER SOURCES. THE ID. ADDL. CIT IMPOSED PENALTY U/S 271D ON THE GROUND THAT DURING FY 2014-15, THE APPELLANT TOOK A LOAN OF RS. 15 CRORES, OTHERWISE THAN BY WAY OF CROSSED ACCOUNT PAYEE CHEQUE IN VIOLATION OF SECTION 269SS OF THE INCOME-TAX ACT, FROM S.A. NO. 25/JP/2019 RAM KISHAN VERMA VS. ADDL.CIT 4 ONE SHRI D.P.SEHGAL OF JAIPUR. THE ALLEGATION / INFERENCE IS BASED ON THE FACT THAT DURING THE COURSE OF SEARCH AND SEIZURE OPERATION AT THE RESIDENTIAL PREMISES OF SAID SHRI SEHGAL IN DECEMBER 2014, CERTAIN PAPERS WERE FOUND AND SEIZED AND BASED WHICH IT WAS ALLEGED THAT THE ASSESSEE A HAD TAKEN A LOAN OF RS.15 CRORE FROM SHRI D.P. SEHGAL IN CASH, ALLEGEDLY VIOLATING THE PROVISIONS OF S.269SS. THE PENALTY SO IMPOSED HAS BEEN CONFIRMED BY THE LD. CIT(A) AGAINST WHICH THE ASSESSEE FILED SECOND APPEAL BEFORE THE HON'BLE ITAT ON 26.03.2019, WHICH IS PRESENTLY PENDING FOR HEARING. WE FOUND THAT WHILE CONFIRMING THE PENALTY, THE LD. CIT(A) HAS HEAVILY RELIED ON THE STATEMENT RECORDED U/S 132(4) OF THE ACT, WHICH HAS BEEN RETRACTED BY THE ASSESSEE POINTING OUT THE CIRCUMSTANCES AND DURESS UNDER WHICH THE SAME WAS RECORDED. WE ALSO FOUND THAT MR. D.P. SEHGAL AT WHOSE PREMISES, ALLEGED DOCUMENTS WERE FOUND, HAVE CATEGORICALLY DENIED HAVING GIVEN OR ARRANGING ANY LOAN OR DEPOSIT FOR THE ASSESSEE. THE ASSESSEE HAS ALREADY PAID RS. 3.00 CRORES. TAKING INTO ACCOUNT THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, WE FOUND THAT IT IS A FIT CASE FOR GRANT OF EARLY HEARING. ACCORDINGLY, THE EARLY HEARING IS FIXED ON 20/5/2019. THE DEPARTMENT IS DIRECTED NOT TO PRESS FOR ANY FURTHER DEMAND TILL DISPOSAL OF APPEAL BY THE TRIBUNAL. WE DIRECTLY ACCORDINGLY. S.A. NO. 25/JP/2019 RAM KISHAN VERMA VS. ADDL.CIT 5 7. IN THE RESULT, THIS STAY APPLICATION IS DISPOSED OFF IN TERMS INDICATED HEREINABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 03 RD MAY, 2019. SD/- SD/- FOT; IKY JKO JES'K LH 'KEKZ (VIJAY PAL RAO) (RAMESH C SHARMA) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 03 RD MAY, 2019 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI RAM KISHAN VERMA, KOTA. 2. IZR;FKHZ @ THE RESPONDENT- THE ADDL.CIT, RANGE-1, KOTA. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (SA NO. 25/JP/2019) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR