Madras High Court
Commissioner Of Income-Tax vs M/S.Ratna Agencies on 10 November, 2005
Bench: P.D.Dinakaran, T.V.Masilamani
IN THE HIGH COURT OF JUDICATURE AT MADRAS
Dated: 10/11/2005
Coram
The Hon'ble Mr.Justice P.D.DINAKARAN
and
The Hon'ble Mr.Justice T.V.MASILAMANI
T.C.(A) No.1197 of 2005
and T.C. (A) No. 1198 of 2005
Commissioner of Income-Tax,
Coimbatore ... Appellant in both the appeals
-Vs-
M/s.Ratna Agencies
Coimbatore ... Respondent in both the appeals
The above T.C.(Appeals) are preferred under Section 260A of the
Income-Tax Act, 1961 against the order of the Income Tax Appellate Tribunal,
Madras 'C' Bench, dated 3.4.2002 made in ITA Nos.2565 & 2566(Mds)/1991.
!For Appellant : Mr.N.Muralikumaran
^For Respondent : ---
:J U D G M E N T
(Judgment of the Court was made by P.D.DINAKARAN, J.) The above tax case appeals are directed against the order of the Income-tax Appellate Tribunal dated 3.4.2002 made in ITA.Nos.2565 & 2566 (Mds)/1991 respectively.
2. The Revenue is the appellant. The assessment year involved in the present appeals is 1989-1990.
3. The short facts of the case are that the assessee Company is a partnership firm and it filed returns for the assessment year 1989-1990 . The assessing Officer while processing the returns, noticed that the assessee had contravened the provisions of Section 269SS and 269T by accepting cash loans exceeding Rs.20,000/- and hence levied penalty under Sections 271D and 271E of the Income Tax Act, 1961. Against such levy of penalty the assessee filed an appeal before the Commissioner of Income Tax (Appeals), who deleted the penalty imposed by the assessing officer holding that the contravention alleged against the assessee did not result in any unaccounted transaction such as lending and repayment and that both lending and repayment were entered in the books of the assessee and the figure involved was meagre and that the same was incurred only for meeting the sudden demand of overdraft account. Aggrieved against the said deletion of penalty, the revenue went before the Tribunal, which endorsed the views of the Commissioner of Income Tax (Appeals) and dismissed the appeal. It is against the said order dated 3.4.2002 of the Tribunal, the present appeals have been preferred raising the following substantial question of law, "Whether in the facts and under the circumstances of the case, the appellate Tribunal was right in holding that penalty under Section 271 D and 271E cannot be imposed for violation of Section 269SS and 269T ?"
4. A similar question arose before the Delhi High Court and while answering the question by its Judgment reported in (2004) 266 ITR 255 (Commissioner of Income-tax Vs. Parma Nand), after extracting the relevant portions from the order of the Tribunal, the Court held as under, "The afore-extracted portion of the Tribunal's order shows that the conclusion of the Tribunal that there was a reasonable cause in not strictly complying with the provisions of section 269SS of the Act is based on relevant factors. We find it difficult to hold that the view taken by the Tribunal is either perverse or so irrational that no reasonable person, on the given facts, would have come to the same conclusion. The findings recorded by the Tribunal are essentially factual giving rise to no question of law much less a substantial question of law."
(Emphasis Supplied)
5. In the case on hand, the Tribunal after endorsing the findings of the Commissioner of Income Tax (Appeals) that the contravention alleged against the assessee did not result in any unaccounted transaction such as lending and repayment and that both the transactions were entered in the books of the assessee and the figure involved was also meagre and that the same was incurred only for meeting the sudden demand of over-draft account, found that the order of Commissioner of Income Tax (Appeals) is well reasoned one and the same does not suffer from any infirmity requiring any interference. The said findings by the Tribunal were essentially factual and no question of law much less substantial question of law arises for consideration.
6. In this view of the matter, we hold that there is no reason whatsoever to interfere with the findings of the Tribunal that there was reasonable cause for the assessee for not strictly complying with the provisions of section 269SS of the Act.
7. Consequently, we answer the question in the affirmative against the revenue and in favour of the assessee, that in the facts and circumstances of the case, the Tribunal was right in holding that the penalty under Section 271D and 271E cannot be imposed for violation of Section 269SS and 269T of the Act. Accordingly, the appeals are dismissed. No costs.
Index : Yes Website: Yes vr To The Commissioner of Income Tax, Coimbatore.