Income Tax Appellate Tribunal - Chennai
T.Shiju, Chennai vs Jcit Non Corporate Range 7, Chennai on 7 June, 2019
आयकर अपीलीय अिधकरण, ''डी'' ायपीठ, चे ई
IN THE INCOME-TAX APPELLATE TRIBUNAL 'D' BENCH, CHENNAI
ी ऐम. बालगनेश, लेखा सद एवं ी धु ु आर.एल रे ी, ाियक सद के सम
Before Shri M. Balaganesh, Accountant Member &
Shri Duvvuru RL Reddy, Judicial Member
आयकर अपील सं./I.T.A.No.2829/Chny/2018
िनधारण वष/Assessment Year :2013-14
Shri T. Shiju, The Joint Commissioner of
707A, MTH Road, Mannurpet, Padi, Vs. Income Tax,
Chennai-600 050. Non Corporate Range 7,
Chennai 600 034.
[PAN: APDPS8825B]
(अपीलाथ /Appellant) ( थ /Respondent)
अपीलाथ की ओर से / Appellant by : Shri G. Sitaraman, CA
थ की ओर से/Respondent by : Shri R.V. Aroon Prasad, JCIT
सु नवाई की तारीख/ Date of hearing : 04.06.2019
घोषणा की तारीख /Date of Pronouncement : 07.06.2019
आदे श /O R D E R
PER DUVVURU RL REDDY, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order of the ld. Commissioner of Income Tax (Appeals) 7, Chennai, dated 25.07.2018 relevant to the assessment year 2013-14 challenging the confirmation of penalty levied under section 271D of the Income Tax Act, 1961 ["Act" in short].
2. The brief facts of the case are that the assessee filed his return of income for the assessment year 2013-14 on 30.09.2013 admitting an income of ₹.21,69,180/-. This case was selected for scrutiny and notice 2 I.T.A. No.2829/Chny/18 under section 143(2) of the Act was issued on 02.09.2014 and served on the assessee. Subsequently, notice under section 142(1) issued on 11.08.2015, against which, the assessee furnished all details. After verification of the books of accounts, documents and information filed, the assessment was completed under section 143(3) of the Act on 03.03.2016 by assessing total income at ₹.28.28.870/- after making following additions:
Loss on sale of Motor Cycle : ₹.3,040/-
Disallowance u/s.40(a)(ia) : ₹.5,08,800/-
Staff Welfare : ₹.65,020/-
Sundry Expenses : ₹.82,830/-
Thereafter, the Assessing Officer initiated penalty proceedings under section 271D of the Act. Since the assessee violated the provisions of section 269SS of the Act, the Assessing Officer issued notice under section 271D of the Act and levied penalty under section 271D on the sum of ₹.36,64,500/- received by the assessee as loan by way of cash and not by way of account payee cheques, which is in violation of provisions of section 269SS of the Act. Against the levy of penalty, the assessee preferred appeal before the ld. CIT(A). After considering the submissions of the assessee, the ld. CIT(A) confirmed the levy of penalty under section 271D of the Act.
3. On being aggrieved, the assessee is in appeal before the Tribunal. The ld. Counsel for the assessee vehemently argued that in the assessment order, the Assessing Officer proposed for levy of penalty under section 271(1)(c) of the Act, which relates to concealment of income or furnishing of 3 I.T.A. No.2829/Chny/18 inaccurate particulars, whereas, in the penalty proceedings, the penalty was levied under section 271D of the Act which is totally against the law laid down by the various courts including the Hon'ble Supreme Court and prayed for deleting the penalty levied under section 271D of the Act.
4. On the other hand, the ld. DR supported the orders of authorities below.
5. We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. In this case, the assessment was completed under section 143(3) of the Act by assessing total income at ₹.28.28.870/- after making various additions. Moreover, while framing the assessment order, the Assessing Officer has not given any findings/observations that the assessee has contravened the provisions of section 269SS of the Act. Against the additions/disallowances, it is an admitted fact that the Assessing Officer proposed for initiating penalty proceedings under section 271(1)(c) of the Act. Thus, it is a clear cut case that on perusal of the assessment order, the Assessing Officer has not recorded any satisfaction recorded regarding penalty proceedings under section 271D of the Act.
6. On perusal of the appellate order, we find that by reproducing the head-notes and held-portion, the ld. CIT(A) has held that the decision of the 4 I.T.A. No.2829/Chny/18 Hon'ble Supreme Court in the case of CIT vs. Jai Laxmi Rice Mills reported in 379 ITR 521 is not applicable since the facts of the case are distinguishable. However, we find that firstly, the ld. CIT(A) has not distinguished the applicability of the above judgement of the Hon'ble Supreme Court to the present case. Secondly, in that case, even though in the original ex-parte assessment order, the Assessing Officer has recorded satisfaction that the assessee had contravened the provisions of section 269SS of the Act, but, while framing fresh assessment order, the Assessing Officer has not recorded such satisfaction regarding penalty proceedings under section 271D of the Act and thereby, the Hon'ble Supreme Court quashed the levy of penalty. In the present case in hand, the Assessing Officer has not at all recorded his satisfaction that the assessee has contravened the provisions of section 269SS of the Act warranting levy of penalty under section 271D of the Act, whereas, against various additions including disallowance under section 40(a)(ia) of the Act, the Assessing Officer proposed for initiating penalty proceedings under section 271(1)(c) of the Act, which is an identical provisions, where the income escaped assessment or furnishing of inaccurate particulars of income, attracts penalty. It is pertinent to reproduce the relevant paragraph of the judgement of the Hon'ble Supreme Court in the case of CIT v. Jai Laxmi Rice Mills (supra):
5 I.T.A. No.2829/Chny/18
"As pointed out above, in so far as, the fresh assessment order is concerned, there was no satisfaction recorded regarding the penalty proceeding under section 271E of the Act though in that order the Assessing Officer wanted penalty proceeding to be initiated under section 271(1)(c) of the Act. Thus, in so far as penalty under section 271E is concerned, it was without any satisfaction and therefore, no such penalty could be levied."
Thus, in view of the above facts and circumstances, we are of the considered opinion that the trait preposition laid down by the Hon'ble Supreme Court in the case of CIT v. Jai Laxmi Rice Mills (supra) squarely applies to the case of the assessee. Respectfully following the above decision of the Hon'ble Supreme Court, the penalty levied under section 271D of the Act stands deleted.
7. In the result, the appeal filed by the assessee is allowed.
Order pronounced on the 07th June, 2019 at Chennai.
Sd/- Sd/- (M. BALAGANESH) (DUVVURU RL REDDY) ACCOUNTANT MEMBER JUDICIAL MEMBER Chennai, Dated, the 07.06.2019 Vm/-
आदे श की ितिलिप अ ेिषत/Copy to: 1. अपीलाथ /Appellant, 2. थ / Respondent, 3. आयकर आयु (अपील)/CIT(A), 4. आयकर आयु /CIT, 5. िवभागीय ितिनिध/DR & 6. गाड फाईल/GF.