Income Tax Appellate Tribunal - Chandigarh
Sonia Verma, Ludhiana vs Ito, Ward -1, Ludhiana on 2 March, 2023
आयकर अपील य अ धकरण,च डीगढ़ यायपीठ "एकल सद यीय', च डीगढ़
IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH
'SMC' CHANDIGARH
ीमती दवा संह, या#यक सद य
BEFORE: SMT. DIVA SINGH, JM
आयकर अपील सं./ ITA No. 565/CHD/2022
नधा रण वष / Assessment Year : 2017-18
Sonia Verma,, बनाम The ITO,
House No.3469, Ward 1,
M/s Verma Boutique, VS
Ludhiana.
Mohalla-Lahorian, Jagraon,
Ludhiana.
थायी लेखा सं./PAN No: FRLPS9739B
अपीलाथ /Appellant यथ /Respondent
नधा रती क! ओर से/Assessee by : Shri Sudhir Sehgal, Advocate
राज व क! ओर से/ Revenue by : Shri Akashdeep, JCIT, Sr.DR
सन
ु वाई क! तार&ख/Date of Hearing : 01.02.2023
उदघोषणा क! तार&ख/Date of Pronouncement : 02.03.2023
आदे श/ORDER
Th e p r e s e n t a p p e a l p e r t a i n i n g t o 2 0 1 7 - 1 8 a s s e s s m e n t y e a r has been filed by the assessee assailing the correctness of the order dated 31.05.2022 of th e NFAC, Delhi (i.e. N a ti o n a l F a c e l e s s A p p e a l C e n t r e ) a c t i n g a s F i r s t A p p e l l a t e Au t h o r i t y o n t h e following grounds :
1 . That the Ld. CIT (Appeals), NFAC, Delhi in law as well as on facts has erred in confirming penalty at Rs. 9,10,000/- U/s 271-D of the Income Tax Act, 1961 as imposed by the Ld. Joint Commissioner of Income Tax, Moga Range, Moga.
ITA 565/CHD/2022 A.Y. 2017-18 Page 2 of 20 2 . That the Ld. CIT (Appeals), NFAC, Delhi in law as well as on facts has erred in not allowing the statutorily relief as specifically provided U/s 273-B of the Income Tax Act, 1961 to the appellant.
3 . That the Appellant craves leave to add, alter, amend, modify, or withdraw the grounds of appeal before the appeal is finally heard or disposed off.
2. Th e r e l e v a n t f a c t s o f t h e c a s e a r e t h a t t h e a s s es s e e r e s i d e n t of House No.3469, Mohalla Lahorian, Jagraon Distt. Ludhiana for t h e c o n s i d e r a t i o n o f R s . 9 , 1 0 , 0 00 / - s o l d h e r f l at N o . 3 6 1 , G . F. B l k - G , P K T- 7 , S e c t o r 1 6 , R o h i n i , D e l h i t o S h r i P a w an K u m a r , C - 2 / 9 8 , B l o c k C , P o c k e t - 2 , S e c t o r 1 6 , R o h i n i , D e l h i in t h e y e a r u n d e r c o n s i d e r a t i o n . Th e s a l e p r o c e e d s w e r e a c c e p t e d i n c a s h . O n a c c o u n t o f t h i s f a c t , p e n a l t y u / s 2 7 1 D o f t h e A c t wa s l e v i e d u p o n the assessee.
2.1 I n r e s p o n s e t o th e n o t i c e i s s u e d u / s 2 7 4 r e a d w it h S e c t i o n 2 7 1 D , t h e a s s e s s e e a s p e r r e c o r d f i l e d w r i t t e n s u b m i s s i o n s . Th e s e a r e e x t r a c t e d i n p a r a 3 o f t h e P e n a l t y o r d e r a n d a re r e p r o d u c e d hereinafter for completeness :
"3. The counsel of the assessee submitted that the assessee owns very small Janta flat and for the purpose of arranging funds for the marriage of her daughter, the assessee sold her impugned Janta flat for a total consideration of Rs.9,10,000/-. The registry for the sale of the aforesaid impugned Janta flat was duly executed on 22.11.2016 with Sub Registrar VI, New Delhi vide registration No. 11070. The sale consideration was received in cash on different dates i.e. Rs.150,000/- on 17.02,2016, Rs.160,000/- on 12.04.2016, Rs.240,000/- on 16.06.2016, F&170,00Q/- on 20.07.2016 and Rs.190,000/- on 10.10.2016. The full consideration was received upto 10.10.2016 and e-stamp for the registry of the impugned Janta flat was purchased on 10.10.2016 and due to administrative and procedural delays the registration was executed on 22.11.2016. It was also submitted that the sole reason for the sale of aforesaid impugned Janta flat was that the assessee was in-dire need ITA 565/CHD/2022 A.Y. 2017-18 Page 3 of 20 of funds for the purpose of materializing the marriage of her elder daughter as after her engagement on 07.01.2013, her marriage was repeatedly postponed due to shortage of funds. However, during that days there was acute slump in the immovable property market and the assessee was facing difficulty to locate its buyer. When the deal for the sale of impugned property was materialized, the buyer of the property told the assessee that he can not pay the whole sale consideration in lump sum in one day and will pay the same in parts. Thus the payments were received by the assessee in parts. The marriage of her daughter was fixed on 08.12.2016 at O.D. Clum, Kn Katsu Marg, Sector 13, Rohini (New Delhi). The assessee also submitted that due to incapability of her husband due to facing a major accident the assessee alone was having complete burden and responsibility to manage for the whole affairs of the marriage of her daughter."
(emphasis supplied) 2.2 Th e e x p l a n a t i o n s u p p o r t e d b y t h e d e c i s i o n s r e f e r r e d t o i n t h e order were not accepted. Th e A O i m p o s e d p e na l t y h o l d i n g a s under:
" 5. The submission of the assessee has been carefully gone through/considered. However I do not incline to agree with the same. The assessee, in this case, has failed to justify the reasonable cause for failure on five separate occasions during the year. She had reasonable time to accept the sale consideration by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account as she accepted the full consideration during 17.02.2016 to 10.10.2016 in 05 parts i.e. in a very long span of time (approx 08 months). She was having sufficient time to manage all the Marriage affairs of her daughter as stated in her submission. Further, the facts of the case is distinguishable from the cases relied upon by the assessee in her submission. Accordingly, after due consideration of all facts and circumstances of the case. I am satisfied that the assessee has contravened the proviso of Sec. 269SS of the Income-tax Act, 1961 and-it is a fit case for imposing penalty u/s 271D of the Income-tax Act, 1961.
Accordingly., the penalty of Rs.9,10,000/- is hereby imposed u/s 271D of the Income- tax Act, 1961. The assessee is directed to pay the penalty of Rs.9,10,000/- as per notice of demand."
ITA 565/CHD/2022 A.Y. 2017-18 Page 4 of 20
3. Th e issue carried in appeal be f o r e the First Appellate A u t h o r i t y c h a l l e n g i n g t h e l e v y o f p e n a l t y w a s a l so u n s u c c e s s f u l. F o r t h e p u r p o s e s o f c o m p l e t e n e s s , i t i s n e c e s s a r y to b r i n g o u t t h e contentions of the assessee as summed up by the First Appellate A u t h o r i t y r e f e r r i n g t o f a c t s a s a v a i l a b l e b e f o r e t he A O :
c) The contentions of Appellant before the AO are as under:-
i. Appellant sold the Janta Flat for arranging funds for marriage of her daughter. Registry for sale was executed on 22.11.2016 with Sub Registrar VI, Delhi.
ii. Sale consideration was received in cash on 5 different dates upto 10.10.2016 and e-stamp was purchased on 10.10.2016.
iii. Marriage of Appellants daughter was repeatedly postponed due to shortage of funds although the engagement happened on 07.01.2013. Appellant was in dire needs of funds to materialize her daughter marriage. iv. Buyer of flat told Appellant that he cannot pay in lump sum on single date and he paid it in parts. Marriage was fixed on 08.12.2016 in Rohini, Delhi. v. Husband of Appellant was in capacitated due to major accident so entire burden, of marriage was on Appellant.
vi. Appellant relied on various case laws as outlined in para 4 of the order.
(emphasis supplied) 3.1 Th e w r i t t e n s u b m i s s i o n s o f t h e a s s e s s e e a d v a n c e d b e f o r e t h e F i r s t A p p e l l a t e Au t h o r i t y a r e r e p ro d u c e d a t p a g e s 3 t o 1 7 o f t h e impugned order. Th e s e c u l l e d o u t f r o m t h e w r i tt e n s u b m i s s i o n s filed are set out in page 19 and 20 of the impugned order. Th e s e are reproduced hereinafter for completeness:
ITA 565/CHD/2022 A.Y. 2017-18 Page 5 of 20
a) The contentions of Appellant in brief are as under:-
i. These funds were required for marriage of Appellants daughter. Buyer was not giving the payment in lump sum on one date. Appellant had to travel 400 kms from Jagraon to Delhi to receive the said payments in cash on 5 different dates. ii. Appellant was not sure whether the cheque issued by buyer would be passed or not, thus, she accepted the sale considerable in cash.
iii. Appellant had a savings bank account with SBI, Jagraon. Appellant's son-in-law was in Delhi and venue of marriage was in Delhi. Appellant did most of shopping for wedding in Delhi. Appellant took all payments in cash in Delhi and utilized most of these funds in Delhi on shopping for wedding. Copies of two purchase bills were filed.
iv. Had the Appellant taken the payment by cheque, it would have caused her genuine hardship as branches- other than parent branch do not allow cash withdrawal in excess of Rs.50,000/- per day. Even high value withdrawals are not permissible in ATM also. It was not feasible for Appellant to stay in Delhi for a number of days for purpose of making withdrawals from her bank account in Delhi. It was not feasible for Appellant to come to Jagraon and withdraw cash and go back to Delhi to do the shopping. v. Appellant had no knowledge that she cannot take payments in cash against sale of property.
vi. No Capital Gain was attracted on sale of said property.
vii. It is bonafide and genuine transaction and is no way related to evasion of tax. Section 269SS is not applicable on bonafide genuine transaction. viii. Appellant had proved the reasonable cause for failure to comply with provisions of section.269SS. Thus, statutory relief u/s 273 be allowed to Appellant. ix. Appellant has relied on number of judgments in support of her contentions.
(emphasis supplied) 3.2 Th e explanation has been discarded again resulting in confirming the penalty order.
4. A g g r i e v e d t h e a s s e s s e e i s i n a p p e a l b e f o r e t h e I TA T. ITA 565/CHD/2022 A.Y. 2017-18 Page 6 of 20
5. Th e l d . A R i n v i t i n g a t t e n t i o n t o t h e i m p u g n e d o rd e r r e l i e d h e a v i l y u p o n t h e s u b m i s s i o n s a s f o u n d a d v a n c e d i n p a r a 3 o f t he penalty order and assailed the findings in para 5 submitting that the assessee's husband was do i n g small job work w i th a goldsmith in Jagraon and admittedly had no assessable income a n d c o n s e q u e n t l y w a s a n o n - f i l er o f r e t u r n . I t ha s b e e n a r g u e d that due to her husband's incapacity on account of some a c c i d e n t , t h e a ss e s s e e h a d t o do t h e r u n n i n g fr o m Ja g r a o n t o Delhi frequently for the sale of the asset and u t i li z e d the p r o c e e d i n g f o r m a k i n g p u r c h a s e s f o r m a r r i a g e c er e m o n i e s o f h e r daughter which was repeatedly postponed over the years for want of funds. D u e t o a s l u m p i n t h e m a r k e t , t h e s a l e of t h e s a i d f l at c o u l d b e f i n a l i z e d w i t h g r e a t d i f f i c u l t y . I t w a s h is s u b m i s s i o n t h a t the assessee has led evidences to show that marriage of the a s s e s s e e ' s d a u g h t e r w a s f i n a l i ze d i n t h e y e a r 2 0 1 3 a n d b e i n g r e p e a t e d l y d e l a y e d o n a c c o u n t o f l a c k o f f u n d s u l t im a t e l y t o o k place in 2016. Th e p r o c e e d s w e r e r e c e i v e d i n D e l h i a s t h e purchaser of the flat who is identified and already named also being a man of small means expressed his inability to make a lumpsum payment and could make smaller payments as per r e c o r d o n f i v e d if f e r e n t d a t e s . I t w a s s u b m i t t e d th a t t h e s e f a c t s are recorded in the Sale Deed itself which is a R e gi s t e r e d ITA 565/CHD/2022 A.Y. 2017-18 Page 7 of 20 document. Relying on these facts on record, it was submitted that reasonable cause for failure, if any has been advanced by the assessee repeatedly before the tax authorities.
5.1 I n v i t i n g a t t e n t i on t o t h e i m p u g n e d o r d e r , s u b m is s i o n s a s a d v a n c e d b e f o r e t h e C I T( A ) w e r e a g a i n r e - i t e r a t e d as e x t r a c t e d i n the impugned order. R e l y i n g o n t h e s a m e , i t w a s s ub m i t t e d t h a t n o t h i n g n e w h a s b e e n s a i d t h e r e i n . Th e e x p l a n a t i o n b e f o r e t h e F i r s t A p p e l l a t e A u t h o r i t y i s a m o r e d e t a i l e d e la b o ra t i o n o f t h e arguments on the same set of facts. S p e c i f i c a t t e nt i o n w a s invited to page 12 and 13 of the impugned order wherein the assessee has relied upon the following decisions of the jurisdictional High Court:
1. PCIT Vs M/s Tehal Singh Khara & Sons, Distt. Ferozepur, ITA No. 248 of 2017 (O&M) decision dated 1.07.2017 (2017) 64 I.T. REPS 420 (P&H).
2. CIT Vs Saini Medical Store (2005) 276 ITR 79 (P&H)
3. CIT Vs Sunil Kumar Goel (2009) 183 Taxman 53 (P&H).
5.2 A t t e n t i o n w a s al s o i n v i t e d t o th e f a c t a s n o t ice d i n t h e i m p u g n e d o r d e r i t s e l f n a m e l y th a t t h e a s s e s s ee d i d g o i n f o r setting the issue before 'Vivad Se Vishwas Scheme', however, could not make the requisite payment which fact had been n o t i c e d b y t h e C I T( A ) a t p a g e 1 8 .
ITA 565/CHD/2022 A.Y. 2017-18 Page 8 of 20 5.3 I n t h e s a i d b a c k d r o p , t h e f i n d i n g a r r i v e d a t b y t h e C I T( A ) a f f i r m i n g t h e p e n a l t y o r d e r a g a i n f o r t h e s a m e r e a so n s , i t w a s s u b m i t t e d , i s c on t r a r y t o l a w a nd f a c t s . I t w a s h is s u b m i s s i o n that it is not in dispute that the assessee has consistently given a n e x p l a n a t i o n a n d i n t e r m s o f t h e j u d i c i a l p r e c e d en t a s s e t t l e d b y t h e j u r i s d i c t i o n a l H i g h C o u r t i n ( S l N o . 4 ) CIT vs. M/s. Harpal Singh Jaswant Singh in ITR No. 14 of 1995 dated 13.09.2006 (P&H); (Sl.No. 5) CIT vs. Speedways Rubber (P) Ltd. reported in [2010] 326 ITR 31 (P&H.); (Sl. No. 6) PC1T vs. M/s. Tehal Singh Khara & Sons, Village Changli Jadid, Ferozepur in ITA No. 248 of 2017 (O & M) and (Sl.No. 9) Judgment of Hon'ble High Court of Allahabad in the case of CIT-II, Agra Vs Smt. Dimpal Yadav ITA No. 174 of 2015 dated 21.08.2015 i t w a s h i s p r a y e r t h a t t h e p e n a l t y i m p o s e d m a y b e q u a s h e d. Th e s e d e c i s i o n s w e r e s p e c i f i ca l l y h i g h l i g h t e d w h i l e s i m u l t a n e o u s l y r e l i a n c e wa s a l s o p l a c e d u p o n t h e o t h er d e c i s i o n s a l s o f i l e d i n t h e P a p e r B o o k , n a m e l y Hindustan Steel Ltd. vs. State of Orissa [1972] 83 ITR 26 (SC); Motilal Lal Padampat Sugar Mills Co. Ltd. vs. State of Uttar Pradesh & Ors. reported in [1979] 118 ITR 326; Faridkot Bathinda Kshetriya Gramin Bank vs. JCIT : reported in [2003] 125 Taxman 268 (ASR.) (MAG.); CIT vs. Saini Medical Store reported in (2005) 276 ITR 79 (P&H); CIT vs. Sunil Kumar Goel reported in [2009] 183 Taxman 53 (P&H); CIT-1 vs. Smt. M Yesodha reported in [2013] 31 taxman.com 153 (Madras); CIT vs. Maheshwari Nirman Udyog reported in [2008] 170 Taxman 502 (Rajasthan);
ITA 565/CHD/2022 A.Y. 2017-18 Page 9 of 20 CIT vs. Bhagwati Prasad Bajoria (HUF) reported in [2003] 133 Taxman 426 (GAU.); Mohanjeet Singh vs. CIT, Khanna reported in [2016] 70 taxmann.com 335 (Chandigarh-Trib.); Mohan Lal Thakral vs. CIT reported in [2018] 93 taxman.com 156 (Punjab & Haryana). O n f a c t s a t t en t i o n w a s a l s o invited to the Paper Book filed wherein at pages 1 to 6 is the copy o f t h e S a l e D e e d w h e r e i n t h e s p e c i f i c a m o u n t s a s p er t h e d e p o s i t s in the bank on the specific dates are mentioned at page 4. Page 1 t o 5 o f t h e P a p er B o o k i s t h e t yp e d c o p y o f t h e S a le D e e d a n d p a g e s 7 t o 1 3 a r e s c a n n e d c o p i e s . Th e s a i d f l a t , it w a s s u b m i t t e d , had been purchased on 09.04.2012 for an amount of Rs.6,50,000/- and finally sold on 22.11.2016 for the s t a t ed a m o u n t . Ty p e d c o p y o f t h i s , i t w as s u b m i t t e d , h a d a l s o b e e n f i l ed which is at pages 14 to 19 and the scanned copy is available at pages 20 to 26. O v e r a n d a b o v e t h i s , i t w a s s u b m i tt e d t h a t t h e a s s e s s e e h a s f i l e d s o m e p u r c h a s e b i l l s f o r c l o t h a nd j e w e l l e r y o n s p e c i f i c d a t e s a s p e r l e t t e r d a t e d 1 0 . 0 7 . 2 0 1 9 b e f o re A O . Th i s c o p y i s a t p a g e 2 7 o f t h e P a p e r B o o k. I t w a s s u b m i tt e d t h a t i t h a s further been supported by an affidavit of the assessee affirming these facts.
5.4 Th e a f f i d a v i t o f t h e a s s e s s e e f i l e d b e f o r e t h e t a x a u t h o r i t i e s was also heavily relied upon. F o r t h e s a k e o f c o mpl e t e n e s s , i t i s also reproduced hereunder :
ITA 565/CHD/2022 A.Y. 2017-18 Page 10 of 20 A F F ID A V IT I Sonia Verma W/o Sh. Mahinderi Pal Verma aged about 44 years resident of 3469, Mohalla Lahoria, Jagraon Distt. Ludhiana do hereby declare on solemn affirmation as under :
1. That the engagement of my elder daughter i.e. Smt. Chanchal was done on 07.01.2013 with Sh. Rahul Verma S/.o Sh. Vijay Kumar Verma resident of Rohini, Delhi.
2. That the marriage of my daughter Smt, Chanchal was materialized on 08.12.2016 at D.D. Club, Kn Katsu Marg, Sector 13, Rohini (New Delhi).
3. That I have sold my Janta flat at Flat No.36, area measuring 18 sq. feets, Ground Floor, without roof rights, Block -G, Pocket -7, Sector-16, Rohini, Delhi to Sh. Pawan Kumar, C2/98, Block C, Pocket -2, Sector -16, Rohini, Delhi -110089 for a total consideration of Rs.9,10,000/- which was received in cash on different dates as mentioned in the registered sale deed.
4. That the reason for the sale of aforesaid flat was that I was in need of funds for the purpose of materializing the marriage of my elder daughter.
5. That the sale consideration of the aforesaid flat was utilized by me for incurring expenses in relation to the marriage of my daughter.
6. That since my daughter's in laws were residing at Delhi and the venue of the marriage was also at Delhi, as such I done most of the shopping / expenditure etc. in connection with her marriage at Delhi. As such I took all the payments in Delhi and had spent most of it at Delhi itself. Thus the actual utilization of most of the aforesaid funds were at Delhi.
7. That if I took the sale consideration thorugh banking channels then under these circumstances this will cause genuine hardship for me because I maintain the bank account at Jagraon District Ludhiana and the expenditure was be incurred at Delhi.
8. That 1 was having no knowledge that I cannot take the payments in cash against the sale consideration of property and sale consideration was received in cash under a bonafide belief that I can take sale consideration in cash.
Sd/-
Deponent Verification I do hereby declare that my above statement is true and correct to the best of my knowledge and belief and nothing has been concealed in it.
Sd/-
Place : Jagraon Deponent
Dated : 10.07.2019
ITA 565/CHD/2022
A.Y. 2017-18
Page 11 of 20
5.5 C o p i e s o f t h e p u r c h a s e b i l l s o f j e w e l l e r y a n d cl o t h a t p a g e s
31 and 32 were highlighted. Ty p e d c o p y o f t h e t ra n s a c t i o n s w i t h
t h e S t a t e B a n k of I n d i a a t J a g r a on a r e a t p a g e s 3 3 t o 3 4 . P a g e 3 5 a n d 3 6 i s t h e o r ig i n a l s t a t e m e n t . Th e a s s e s s e e ' s h u s b a n d , i t w a s submitted, is handicapped on account of some accident and m e d i c a l b i l l s e v i d e n c i n g t h e f a c t o f a d m i s s i o n o n 30 . 0 8 . 2 0 1 3 t o 0 9 . 0 9 . 2 0 1 3 h a v e b e e n f i l e d a t p ag e s 3 7 t o 4 2 . Th e f a c t t h a t t h e a s s e s s e e ' s d a u g h t e r g o t m a r r i e d o n a s p e c i f i c d at e w a s f i l e d b y way of evidence of marriage card, copy available at pages 43 and 4 4 . W r i t t e n s u b m i s s i o n s f i l e d b e f o r e N F A C a r e a t pa g e s 4 6 t o 6 5 . 5.6 I n t h e s a i d b a c kg r o u n d , i t w a s h i s s u b m i s s i o n t h a t p e n a l t y imposed may be quashed as assessee has pleaded reasonable cause for lapse, if any. A t t e n t i o n w a s i n v i t e d t o Se c t i o n 2 7 3 B as considered by the Courts.
6. Ld. Sr.DR Mr. Akash Deep heavily relying upon t he respective orders of the tax authorities submitted that the fact t h a t t h e r e i s a vi o l a t i o n i s e v i d e n t o n r e c o r d a n d o n t h e f a c t s o f t h e c a s e , t w o t a x a u t h o r i t i e s h a v e f o u n d t h a t i t i s n o t a j u s t i f i a b le case of reasonable cause. It was also his s u b m i s s i on that arguments of ignorance and hardship have no relevance. Relying u p o n t h e o r d e r s , i t w a s h i s s u b m i s s i o n t h a t t h e a s se s s e e v e r y w e l l could have accepted the payment in cheques and withdrawn these ITA 565/CHD/2022 A.Y. 2017-18 Page 12 of 20 at her convenience for her daughter's marriage etc. Accordingly, it was his prayer that the order may be sustained.
7. I h a v e h e a r d t h e s u b m i s s i o n s a n d p e r u s e d t h e ma t e r i a l o n record. A s p e r a d m i t t e d f a c t s no t i n d i s p u t e s a le p r o c e e d s o f a specific flat were received in cash by the assessee on five different occasions; the assessee's daughter's marriage finalized in J a n u a r y , 2 0 1 3 g o t f r e q u e n t l y p o s t p o n e d o n a c c o u n t o f l a c k of f u n d s a n d u l t i m at e l y t o o k p l a c e i n D e c e m b e r 2 0 1 6 ; th e b u y e r w h o i s n a m e d , h i s i d e n t i t y a n d p l a c e o f r e s i d e n c e i s k no w n ; a s p e r consistent arguments, he has expressed his inability to make full p a y m e n t f o r t h e J a n t a f l a t b y w a y o f a o n e t i m e p a ym e n t ; t h e a s s e s s e e o n a c c ou n t o f m e d i c a l i nf i r m i t y o f h e r h usb a n d t r a v e l l e d t o D e l h i t o c o l le c t t h e s a l e p ro c e e d s o n d i f f e re n t d a t e s a n d simultaneously made purchases for the wedding of the daughter, t h e s e a r e s o m e o f t h e r e l e v a n t c o n s i s t e n t e x p l a n a t io n o n r e c o r d . Documentary evidence in support of these submissions is a v a i l a b l e . Th e s e f a c t s a r e a l s o s t a t e d o n a n A f f i d av i t . Th i s remains unrebutted on record. The arguments that the assessee could have arranged her affairs differently is an argument based o n i f s a n d b u t s o f t h e m y r i a d p o s s i b l e w a y s of a d d re s s i n g a situation. Th e s e a r g u m e n t s t o r e b u t t h e e x p l a n a t i o n i n t h e p r e s e n t f a c t s o f th e c a s e a r e n o t re l e v a n t t o d e c i de w h e t h e r t h e r e ITA 565/CHD/2022 A.Y. 2017-18 Page 13 of 20 w a s a r e a s o n a b l e c a u s e f o r f a i l u r e o n t h e p a r t o f th e a s s e s s e e . Th e f a c t t h a t t h e r e i s a f a i l u r e i s a l s o n o t i n d i sp u t e . Th e s u p p o r t i n g a r g u m e n t f o r t h e j u s t i f i c a t i o n i n a c c e p ti n g c a s h o n 5 different occasions canvassing that the assessee's action was prudent as she could not rely upon the purchaser to make payments by cheques which may or may not be honoured and as argued before the First Appellate Authority that getting t he a m o u n t d e p o s i t e d b y w a y o f R TG S / C h e q u e i n h e r J a g r a o n a c c o u n t and then travelling with cash withdrawn at Jagraon to Delhi to m a k e p u r c h a s e s w a s c o n s i d e r e d t o b e u n s a f e / im p r a c t i c a l a n d alternatively/simultaneously it is seen that as per record, it is a l s o p l e a d e d p o s s i b l y t h a t t h e r e w a s a l i m i t o f c ash w i t h d r a w a l s f r o m A TM s . Th e s e s u b m i s s i o n s o n r e c o r d e v e n i f c a n v a s s e d b y h i n d s i g h t t o j u s t i f y t h a t t h e a s s e s s e e c h o s e t h e si m p l e s t a n d s u r e s t w a y o f a cc e p t i n g t h e s a l e p r o c e e d s i n D e l hi a n d u s e d t he same for making purchases in Delhi for the oncoming marriage of h e r d a u g h t e r a l s o i n D e l h i r e ma i n u n - r e b u t t e d . In addition, i g n o r a n c e o f l aw h a s a l s o b e en p l e a d e d . A gr e e i n g w i t h t h e a r g u m e n t s o f t he l d . S r . D R t h a t i g n o r a n c e o f l aw is n o e x c u s e. H o w e v e r , i t i s ne c e s s a r y t o k e e p i n m i n d t h e p ro v i si o n s o f l a w i n v o k e d . Th e i s s u e i s n o t t o b e d e c i d e d o n t h e p l e a o f i g n o r a n c e o f law and is to be considered under the umbrella provision of ITA 565/CHD/2022 A.Y. 2017-18 Page 14 of 20 S e c t i o n 2 7 3 B o f t h e I n c o m e Ta x A c t , 1 9 6 1 . Th u s , t h e p l e a d i n g that the assessee was in ignorance of law at best ca n be c o n s i d e r e d t o b e a s u b m i s s i o n s o a s t o a r g u e t h a t it i s n o t a c a s e o f w i l l f u l a n d d e l i b e r a t e d e f i a n c e o f l a w o n t h e p ar t o f t h e a s s e s s e e . I n t h e f a c t s o f t h e p r e s e n t c a s e , t h e e x pl a n a t i o n o n r e c o r d t o b e c on s i d e r e d i s w h e t h e r a r e a s o n a b l e c a u s e f o r t h e violation is made out on facts or not. Section 273B of the Income Ta x A c t s p e c i f i c a l l y l a y s d o w n t h at i n c a s e t h e a s se s s e e o f f e r s a n explanation showing reasonable cause for the failure, then the penalties considered therein including penalty u/s 271D is not attracted. In t he facts of the present case, a d m i t te d l y the assessee has led sufficient explanations consistently on record w i t h e v i d e n c e w h i c h r e m a i n s u n r e b u t t e d t o p l e a d a re a s o n a b le cause. N o d o ub t , w h a t w o u l d c o n s t i t u t e a re a s o n a b le c a u s e c a n n o t b e s p e c i f i c a l l y d e f i n e d b y a n y c l e a r d e f i n i ti o n i t i s t o b e considered on the basis of all the possible factors which may come into play for the actions of the assessee. The very expression 'reasonable cause' it s e l f cannot be satisfactorily defined for all purposes, times and s i t u a t i o n s. The simple d i c t i o n a r y m e a n i n g o f ' r e a s o n a b l e ' i s f a i r , p r a c t i cal a n d s e n s i b l e . O v e r a p e r i o d o f t i m e , i t h a s b e e n s e e n t h a t a r e a so n a b l e c a u s e i s a s t a n d a r d o f p ro o f t h a t i s a p p l ie d t o a s e t o f f act s o r a c t i o n s to ITA 565/CHD/2022 A.Y. 2017-18 Page 15 of 20 p r o v e w h e t h e r a r e a s o n a b l e p e r s o n w o u l d h a v e c om e t o t h e s a me c o n c l u s i o n o r a c t e d i n t h e s a m e w a y g i v e n t h e t o t a li t y o f t h e c i r c u m s t a n c e s . T h u s , i t c a n b e f ai r l y d e s c r i b e d a s a n e x e r c i s e t o d e t e r m i n e w h e t h e r a r a t i o n a l e b a s i s f o r a c t i o n t a k en i s a v a i l a b l e o n r e c o r d o r n o t . I t m a y b e n e c es s a r y t o a l s o w e i g h j u d i c i o u s l y w h e t h e r t h e a c t i o n s a r e e x c e s s i v e o r m o d e r a t e t o a dd r e s s t h e situation. Applying these yardsticks, considering the consistent e x p l a n a t i o n a v a i l a b l e o n r e c o r d , I a m s a t i s f i e d t h at t h e a s s e s s e e has successfully made out a case demonstrating that there was a r e a s o n a b l e c a u s e f o r h e r t o a c c e pt p a y m e n t s o n t he s p e c i f i c d a t e s a n d t h u s , t h e b on a f i d e e x p l a n a t i o n o f f e r e d b y t h e a s s e s s e e i n t h e p e c u l i a r f a c t s o f t h e p r e s e n t c a s e , I f i n d d e s e r v e s to b e a c c e p t e d . Th e p e n a l t y , a c c o r d i n g l y , i s d i r e c t e d t o b e q u a s h e d .
8. W h i l e c o m i n g t o t h e s a i d c o n c l u s i o n , I h a v e t a k en i n t o c o n s i d e r a t i o n t h e v a r i o u s d e c i s i o n s c i t e d i n t h e ord e r s a n d r e l i e d u p o n i n t h e p r o c e e d i n g s b e f o r e t h e I TA T.
9. B e f o r e p a r t i n g , I d e e m i t a p p r o p ri a t e t o a d d r e s s th e s p e c i f i c objection of the ld. Sr.DR namely that ignorance of law is not an e x c u s e . I f i n d t ha t t h e s a i d s u b m i s s i o n c o r r e c t i n l a w i s n o t o p en t o d e b a t e a n d i s a v a l i d s u b m i s s i o n . H o w e v e r , i n t he p r e s e n t s e t o f f a c t s t h o u g h i t i s p l e a d e d , i t n e e d b e e m p h a s i z ed t h a t i t h a s ITA 565/CHD/2022 A.Y. 2017-18 Page 16 of 20 not been the reason or rationale for quashing the penalty. At the c o s t o f r e - i t e r a t i o n w h a t i s r e q u i r e d t o b e s e e n f or c o n f i r m i n g o r quashing the penalty imposed is the availability of the shelter p r o v i d e d b y S e c t i o n 2 7 3 B o f t h e I n c o m e Ta x A c t t o th e g i v e n s e t o f facts. Th e l e e - w a y g i v e n b y t h e p r o v i s i o n p e r m i t t in g t h e a s s e s s e e to plead r e a s o n a b l e c a u s e f o r t h e f a i l u r e h a s t o be e x a m i n e d f a i r l y . Th e s a i d a r g u m e n t , a c c o r d i n g l y , s t a n d s a d d re s s e d b y w a y of quashing the penalty imposed. Considering the predicament of the present assessee and noticing near similar d i f fi c u l t i e s experienced by a sizeable number of marginal tax payers lacking p r o p e r a d v i c e , ap p r o p r i a t e e x p o s u r e I b e l i e v e t ha t I w o u l d b e f a i l i n g i n m y d u ty i n n o t h i g h l i g ht i n g a g a i n t h e urg e n t n e e d a n d r e q u i r e m e n t f o r t h e T ax A d m in i s t ra t i o n t o t a k e n e c e s s a r y s t e p s o n a w a r f o o t i n g in d i s s e m in a t i n g r e l e v a n t i n f o r m a t i on t o t h e p u b l i c a t l a r g e i . e . i n f o r m them on acceptable ways of transacting and th e need to maintain financial trail of y o u r d o c u m e n t s et c . I find that it is necessary to address t h i s u r g e n t n e e d o f t h e t im e s e m p h a s i z i n g t h a t s t i l l m o r e e f f o r t s n e e d t o b e m a d e b y t h e t ax a u t h o r i t i e s t o disseminate this information. I t i s n e c e s s a r y t o cr e a t e a w a r e n e s s i n t h e p u b l i c d om a i n o f t h e v a r i ou s l e g a l r e q u i r e men t s w h i c h e v e n s m a l l t a x p a y e r s n e e d t o b e a w a re o f . Th e t a x au t h or i t i e s h a v e s u f f i c i e n t f u n d s f o r d i s s e m i n a t i n g i n f o r m a t i o n t o th e p u b l i c in ITA 565/CHD/2022 A.Y. 2017-18 Page 17 of 20 order to ensure tax compliances. Not limiting these efforts to the population attending Conferences and mega events in 5 Star H o t e l s t h e e f f o r t s c o u l d a l s o b e f oc u s e d o n d i s s e m in a t i n g r e l e v a n t i n f o r m a t i o n t o t h e f r i n g e t a x p a y e r s a l s o w h o c o n s tit u t e a s i z e a b l e p o p u l a t i o n o f t h e I n d i a n e c o n o m y . D u e t o p o s s i b l e su d d e n s p u r t i n t h e i r s m a l l b us i n e s s e s e n a b l e d b y t h e d e v e l o p me n t a l e c o n o m i c forces in the country or one time e v e nt of sale of agricultural/ancestral property etc., the consequent sudden deposits in their bank accounts necessarily triggers attention of t h e t a x a d m i n i st r a t i o n . Th i s e v e n t s h o u l d n o t b e t h e s t a r t o f p r o b l e m s i n i n t er a c t i o n s w i t h t he t a x a d m i n i s t r at i on . S i n c e t h e i m p o r t a n c e o f m a i n t a i n i n g f i n a n c i a l t r a i l o f d o c u m en t s i s n o t u n d e r s t o o d a n d f o r w a n t o f p r o pe r i n f o r m a t i o n , I h av e s e e n t h i s p o p u l a t i o n o f t e n l e f t f l a i l i n g l i k e f i s h o u t o f w a te r , i t n e e d s t o b e addressed. Th e relevance and importance of maintaining a f i n a n c i a l t r a i l o f d o c u m e n t s e t c . i t i s m y o p i n i on n e e d s t o b e u r g e n t l y p u b l i c i z e d t o t h e a f f e c t e d p o p u l a t i o n . Th e r e c e i p t o f money catapults them in unknown territories of tax administration. T h e A s s e s s in g O f f i c e r t o o b u s y t o m e e t h i s ow n targets may not be s u f f i c i en t l y equipped alone to help these hapless p e o p l e t o b e t ax c o m p l i a n t . I t i s m y h u m bl e o p i n i o n t h a t ITA 565/CHD/2022 A.Y. 2017-18 Page 18 of 20 t h e m i n d s e t o f th e e n t i r e t a x a dm i n i s t r a t i o n h a s t o c h a n g e . Th e j o u r n e y f r o m c o l o n i a l t i m e s t a x c o l l e c t o r s a s a u t h or i t a r i a n f i g u r e s to people friendly tax administration must start. A s a n e c o n o my I n d i a i s m o v in g a s a j u g g e r n a u t t o w a r d s 7 t r i l l i on d o l l a r s . F or a c h i e v i n g t h i s la u d a b l e a i m , w e n e c e s s a r i l y n e e d t o f i n a n c i a l l y e m p o w e r a n d e n ab l e a l l c i t i z e n s to b e r e a d y f o r t h i s c h an g e . T h e drag on the system by ill equipped vulnerable citizens needs to be addressed on a priority as in the absence of any support, they can f a l l p r e y t o a l i e n a t i n g a n d d i v i s i v e f o r c e s a n d c o ul d t r a g i c a l l y w r o n g l y t r u s t t h e d u b i o u s m a n i p u l a t o r s o f t h e s y s t em i n s t e a d o f placing reliance on the good advice and offices of systematic supportive tax administration of the country. Hence, in my o p i n i o n d is s e m in a t i n g f i n a n c i a l l it e r a c y i n f o r m a t i o n f o r e n s u r in g compliances to the citizens cannot be postponed any further as in t h e a b s e n c e o f r el e v a n t i n f o rm a t i o n , t h e p u b l i c a t la r g e c o m p r i s i n g o f s m a l l t ax p a y er s a r e l e f t f l o u n d e r i n g h o p e l e s s l y i n t h e s e a o f c o n f u s i o n d u e t o a d m i n is t r a t i v e o b d u r a c y w h i ch f a i l s t o p r o v i d e t h e s e p e o p l e s o u n d h e l p f u l a d v i ce / a s s i s t a n c e a n d t h u s b y d e f au l t c r e a t i n g i n t h e m a s e n s e o f a l i e n a t i o n w i th t h e I n d i a n p o l i t y on a c c o u n t o f t h e a d m i n is t r a t i v e a p a t h y . Th e r i s k s o f r e s u l t a n t p u s h o f t h i s p o p u l a t i on i n a d v e r t e n t l y to w a r d s d i s h o n e s t m e a n s o f o n ly b e i n g s e e n t o b e c o m p l i a n t i n s h e e r n u m b e r s a nd p e r c e n t a g e s ITA 565/CHD/2022 A.Y. 2017-18 Page 19 of 20 should not be overlooked. Th i s population in terms of total f i n a n c i a l c o n t r i b u t i o n t o t h e f i na n c i a l k i t t y o f the c o u n t r y m a y not be contributing much, however, the impact on the socio- economic system of the country by this human population in sheer numbers as they constitute a sizeable part of the fabric of t h e c o u n t r y s h o u l d n o t b e t a k e n l i g h t l y a n d c a n n o l o n g e r be ignored. A country moving towards 7 trillion aspirations cannot afford to ignore the foundational bedrock requirements of these a m b i t i o n s . Th e ne e d s o f t h e c h a ng i n g t i m e s h a v e t o b e m e t . Th e p r e p a r a t i o n s f o r t h e c h a n g e c a nn o t b e p o s t p o n e d . T h e n e c e s s i ty o f c r e a t i n g a n d e n a b l i n g th e cr e a t i o n w i th i n th e c o u n t r y h i g h e t h i c a l s t a n d a r d s w i t h th e h i gh e s t p o s s i b l e c o m p l i a n c e s a n d a n e n v i r o n m en t o f fa i r f u n c t i on i n g of t h e c ou n t r y c an n o t b e i g n o r e d . T h i s g r ou n d w o r k n e e d s t o b e d on e n ow . Th e s e m a r g i n a l t a x p a y e r s p r o v i d i n g t h e i m p e t u s t o t h e I nd i a n e c o n o m i c j u g g e rn a u t n e e d a l s o t o b e t a k e n o n b o a r d a n d c an n o t b e i g n o r e d . T h e i r on e a n d o n l y ex p o s u r e t o t h e b u r e a u c r a c y s h o u ld n o t b e on e o f p a i n a n d alienation. I n f a ct , s o u n d a d v i c e a n d h e l p s h ou l d b e m a d e a v a i l a b l e t o t h e m t o e n s u re t h a t t h e y s t a y w i t h in t h e b o u n d s o f l a w .
10. Accordingly, highlighting the suggestions in para 9 Registry i s d i r e c t e d t o f o r w a r d a c o p y o f t h i s o r d e r t o t h e C h a i r m a n , C BD T f o r i n f o r m a t i on a n d a p p r o p r i a t e a c t i o n , i f d e e m e d f it .
ITA 565/CHD/2022 A.Y. 2017-18 Page 20 of 20
11. I n t h e r e s u l t , a pp e a l o f t h e a s s e s s e e i s a l l o w ed .
Order pronounced in the Open Court on 02 March, 2023.
Sd/-
( दवा संह ) (DIVA SINGH) या#यक सद य/Judicial Member "पन ू म"
आदेश क ितिलिप अ ेिषत/ Copy of the order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent
3. आयकर आयु / CIT
4. िवभागीय ितिनिध, आयकर अपीलीय आिधकरण, च डीगढ़/ DR, ITAT, CHANDIGARH
5. गाड फाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar