Income Tax Appellate Tribunal - Panji
Jai Sri Saraswathi Davi Educational ... vs The Jcit,, Eluru on 9 August, 2017
आयकर अपीलीय अधधकरण, धिशाखापटणम पीठ, धिशाखापटणम
IN THE INCOME TAX APPELLATE TRIBUNAL,
VISAKHAPATNAM BENCH, VISAKHAPATNAM
श्री िी. दुगााराि, न्याधयक सदस्य एिं
श्री धड.एस. सुन्दर ससह, लेखा सदस्य के समक्ष
BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER &
SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER
आयकर अपील सं./I.T.A.No.303/Vizag/2015
(धनधाारण िर्ा / Assessment Year: 2010-11)
Jai Sri Saraswathi Devi Jt. Commissioner of
Educational Society Income Tax
D.No.4-3-10, Sivalayam Street, Eluru Range, K.K.S.Towers,
Narsapur - 534 275 RR Peta, Eluru - 534 002
West Godavari District (AP)
(PAN : AAAAJ7989C)
(अपीलार्थी / Appellant) प्रत्यार्थी / Respondent)
अपीलाथी की ओर से / Appellant by : Shri G.V.N.Hari, AR
प्रत्याथी की ओर से / Respondent by : Shri V Appala Raju, DR
सुनिाई की तारीख / Date of Hearing : 01.08.2017
घोषणा की तारीख/Date of Pronouncement : 09.08.2017
आदेश / O R D E R
PER D.S. SUNDER SINGH, Accountant Member:
This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals) [CIT(A)], Rajahmundry vide ITA No.0053/2014-15/Jt.CIT ELR Range/2015-16 dated 01.06.2015. 2 ITA No.303/Viz/2015
Jai Sri Saraswathi Devi Educational Society, Narsapur
2. All the grounds of the appeal are related to the penalty imposed u/s 271D of I.T. Act. During the previous year relevant to the assessment year 2010-11, the assessee has accepted the loans of Rs.60,45,000/- on which the Jt. Commissioner of Income Tax has levied the penalty u/s 271D r.w.s.269SS of I.T. Act for accepting the loans in cash. Aggrieved by the order of the Jt. Commissioner of Income Tax, the assessee went on appeal before the CIT(Appeals) and the Ld. CIT(Appeals) deleted the penalty of Rs.41,90,000/- and confirmed the penalty of the remaining amount of Rs.18,55,000/-. Aggrieved by the order of the Ld. CIT(Appeals), the assessee is in appeal before this Tribunal.
2.1. During the appeal hearing, the assessee submitted that the assessee has taken loans from the following persons in cash :
Total amount Sl. Sri/Smt Date of Loans Mode of accepted No. acceptance accepted in acceptance from cash each creditor
1. G.N.A.Lakshmi 09.06.2009 2,50,000 Cash 15.06.2009 2,00,000 4,50,000 Cash
2. S.Indiravani 15.06.2009 3,25,000 Cash 10.09.2009 30,000 Cash 3 ITA No.303/Viz/2015 Jai Sri Saraswathi Devi Educational Society, Narsapur 26.11.2009 2,00,000 Cash 11.02.2010 1,00,000 Cash 16.02.2010 95,000 7,50,000 Cash
3. A. Narsimha Rao 30.11.2009 1,30,000 Cash 16.02.2010 55,000 1,85,000 Cash
4. A.Suryanarayana 18.09.2009 50,000 Cash 11.02.2010 1,00,000 Cash 16.02.2010 15,000 1,65,000 Cash
5. Ch.Lava Kumar 29.10.2009 50,000 Cash 02.03.2010 35,000 Cash 10.03.2010 1,00,000 1,85,000 Cash G.Sai 15.06.2009 3,00,000 Cash
6. Radhakrishna 22.10.2009 2,50,000 5,50,000 Cash
7. J.Venkateswara 26.11.2009 1,95,000 Cash 1,95,000 Rao
8. K.Chandra Rao 18.09.2009 50,000 Cash 16.02.2010 1,30,000 1,80,000 Cash
9. Keerthi Kumar 10.06.2009 1,00,000 Cash Jain 15.06.2009 3,25,000 Cash 10.09.2009 50,000 Cash 19.09.2009 25,000 Cash 26.11.2009 25,000 Cash 30.11.2009 1,25,000 Cash 16.02.2010 1,00,000 Cash 05.03.2010 1,00,000 Cash 26.03.2010 50,000 9,00,000 Cash
10. Kishore Kumar 15.07.2010 3,20,000 Cash Jain 10.09.2009 30,000 Cash 11.02.2010 1,50,000 5,00,000 Cash
11. K.Rambabu 26.11.2009 70,000 Cash 30.11.2009 1,20,000 1,90,000 Cash
12. Praveen Kumar 15.06.2009 3,20,000 Cash Jain 10.09.2009 30,000 Cash 4 ITA No.303/Viz/2015 Jai Sri Saraswathi Devi Educational Society, Narsapur 11.02.2010 50,000 4,00,000 Cash
13. P.Satyanarayana 26.11.2009 1,95,000 1,95,000 Cash
14. P.Venkateswara 26.11.2009 1,90,000 1,90,000 Cash Rao
15. S.Ramesh Babu 15.06.2009 3,25,000 Cash 19.09.2009 30,000 Cash 20.10.2009 18,000 Cash 23.10.2009 12,000 Cash 26.11.2009 2,25,000 Cash 11.02.2010 1,50,000 Cash 17.02.2010 2,50,000 10,00,000 Cash Total 60,45,000/- Cash Out of which the Ld. CIT (Appeals) deleted the penalty to the tune of Rs.41,90,000/- and confirmed the balance amount. The assessee has opened the bank account on 26.11.2009 and explained to the CIT(A) that the advances were taken from the promoters or the members of the society till the date of 26.11.2009 since the assessee had no bank account. The Ld.CIT(Appeals) believed that there was reasonable cause for accepting the loans in cash in the absence of bank account and accordingly deleted the penalty. However, the Ld.CIT(Appeals) did not find any reason to accept the loans in cash subsequent to opening the bank account i.e. from 26.11.2009 and hence confirmed the penalty. 5 ITA No.303/Viz/2015
Jai Sri Saraswathi Devi Educational Society, Narsapur
3. During the appeal hearing the Ld.AR argued that subsequent to opening the bank account, the assessee has to make some cash transactions for purchase of land from farmers who insisted for cash payments. Therefore, the assessee had no option except accepting the loans in cash to make the payments to the partners. The Ld.AR further argued that all the creditors have been co-opted as members of the society subsequently. The sources were explained and the payments made by the creditors were genuine. Since the payment was made due to exigencies and the loans were accepted from the members of the society, the Ld.AR argued that the penalty imposed u/s 271D may be deleted.
4. On the other hand, the Ld.DR relied on the orders of the Ld. CIT (Appeals).
5. We have heard both the parties and perused the material placed on record. The assessee is a society imparting educational activities and charitable organization without profit motive. The bank account of the assessee was opened on 26.11.2009. Subsequent to opening the bank 6 ITA No.303/Viz/2015 Jai Sri Saraswathi Devi Educational Society, Narsapur account, the assessee had accepted the cash advances of Rs.18,55,000/- from its members to meet its immediate requirements. The transactions were between the members and the society. The advances given by the members are verifiable and the source was not disputed by the assessing officer. The default is purely technical in nature and the transactions have taken place on account of need to incur the expenditure at the site located away from the town in order to carry out the activities of the society. However, the Ld.AR also submitted that the farmers have insisted for cash payments. Hon'ble High Court of Delhi in[2015] 55 taxmann.com 202 (Delhi) in the case of Commissioner of Income-tax, Delhi-VIII, New Delhi. v. Muthoot Financiers in connection with the loans accepted from partners to partnership firm held that Provisions of section 269SS would not be violated when money is exchanged inter-se between partners and partnership firm in spite of the fact that partnership firm and individual partners are separate assesses. Similarly in the instant case the members of the society has given the loans to the society and all the creditors are assessed to tax and we are of the considered view that when the transactions were between the members of the society and the advances are verifiable and the sources are not disputed, penalty 7 ITA No.303/Viz/2015 Jai Sri Saraswathi Devi Educational Society, Narsapur u/s 271D required to be considered leniently and accordingly we set aside the orders of the CIT(Appeals) and cancel the penalty imposed by the Jt.CIT.
5. In the result, the appeal of the assessee is allowed.
The above order was pronounced in the open court on 9th Aug 2017.
Sd/- Sd/-
(िी. दुगााराि) (धड.एस. सुन्दर ससह)
(V. DURGA RAO) (D.S. SUNDER SINGH)
न्याधयक सदस्य/JUDICIAL MEMBER लेखा सदस्य/ACCOUNTANT MEMBER धिशाखापटणम /Visakhapatnam ददनांक /Dated : 09.08.2017 L. Rama, SPS आदेश की प्रधतधलधप अग्रेधर्त / Copy of the order forwarded to:-
1. अपीलाथी / The Appellant - Jai Sri Saraswathi Devi, Educational Society, D.No.4-3- 10, Sivalayam Street, Narsapur - 534 275, West Godavari District (AP)
2. प्रत्याथी / The Respondent - Jt. Commissioner of Income Tax Eluru Range, K.K.S.Towers, RR Peta, Eluru - 534 002
3. आयकर आयुक्त / The CIT, Rajahmundry
4. आयकर आयुक्त (अपील) / The CIT (A), Visakhapatnam and Rajahmundry
4. धिभागीय प्रधतधनधध, आय कर अपीलीय अधधकरण, धिशाखापटणम /DR, ITAT, Visakhapatnam
5. गाडा फ़ाईल / Guard file आदेशानुसार / BY ORDER // True Copy // Sr. Private Secretary ITAT, VISAKHAPATNAM