Income Tax Appellate Tribunal - Jodhpur
Assistant Commissioner Of Income Tax vs Alfa Hydromec (P) Ltd. [Alongwith Ita ... on 1 July, 2004
Equivalent citations: (2006)99TTJ(JODH)405
ORDER
Joginder Pall, A.M.
1. These two appeals have been filed by the Revenue against the two orders (both dt. 23rd Dec, 1998) of CIT(A), Ajmer, in two cases mentioned in the caption of this order for the asst. yr. 1994-95. Since a common issue is involved in both the appeals, these were heard together and are being disposed off by this consolidated order for the sake of convenience.
2. The only effective common issue raised in both the appeals is that the CIT(A) was not justified in cancelling the penalty of Rs. 50,000 and Rs. 52,000 in ITA No. 191/Jdpr/1999 and ITA No. 192/Jdpr/1999, respectively, imposed by the Dy. CIT Under Section. 27IE of the Act. The facts of the cases are that the AO observed that both the assessees had repaid loans/deposits in cash exceeding Rs. 20,000 aggregating to Rs. 50,000 and Rs. 52,000, respectively, to Shri Narayan Singh, manager of the companies. He, therefore, felt that such payments violated the provisions of Section 269T of the Act. He referred the cases to Dy. CIT for consideration and levy of penalty Under Section 271E. Accordingly, show-cause notices were issued to both the assessees. In response to show-cause notices, the assessees replied that Shri Narayan Singh was a managing director in both the companies and he had a current account with them. It was submitted that there was neither any acceptance of loan or deposit nor was there any repayment of such loans or deposits. Hence, there was no violation of the provisions of Section 269T of the Act. However, the Dy. CIT was not satisfied with the explanation given by the assessees as he was of the view that the amounts exceeding Rs. 20,000 have been repaid in violation of provisions of Section 269T. Accordingly, he levied a penalty of Rs. 50,000 and Rs. 52,000 equal to the amount of loans/deposits in both the cases.
3. Being aggrieved, both the assessees carried the matter in appeals before the CIT(A) and reiterated the submissions which were made before the AO. It was submitted that there was a. current account in the name of the managing director out of which payments were made for meeting various expenses. As soon as the account was rendered/submitted, the amount was credited to the current account of Shri Narayan Singh. It was also submitted that even in the past, similar treatment was given and, therefore, there was no violation of provisions of Section 269T of the Act. Accepting the contentions of the assessees, the CIT(A) cancelled the penalty in both the cases. The Revenue is aggrieved by the orders of CIT(A). Hence these appeals before us.
4. The learned Departmental Representative heavily relied on the orders of Dy. CIT for imposing the penalties.
5. The learned counsel for the assessee, on the other hand, heavily relied on the orders of CIT(A). He drew our attention to pp. 9 to 10 of the paper book which is copy of written submission made before the CIT(A). He further drew our attention to p. 1 of respective paper books which is a copy of current account of Shri Narayan Singh, managing director in the books of account of both the companies. He submitted that the opening balance in the current account was neither a loan nor a deposit. The amount were given to him for meeting various expenses. As and when accounts (were) rendered/submitted, the amounts were credited to this account. Thus, it was contended that these amounts were neither deposits nor loans. Hence, the provisions of Section 269T were not violated. He further submitted that the Dy. CIT had also initiated proceedings Under Section 271D. However, these proceedings were dropped in both the cases. He drew our attention to the respective pages of paper book, i.e., pp. 13 and 17 which are copies of the orders of Dy. CIT dropping the proceedings initiated Under Section 271D. Thus, he submitted that the CIT(A) had rightly cancelled the penalties imposed Under Section 271E of the Act.
6. We have heard both the parties and given our thoughtful consideration to the rival submissions. We have also examined the facts, evidence and material placed on record and referred to the respective pages of the paper book to which our attention has been drawn. The fact that Shri Narayan Singh had current account with both the companies is not in dispute. It is also a fact that as and when money was required for meeting various expenses, the same was given to Shri Narayan Singh and his account was credited as soon as the details of expenses incurred were submitted by him. It is also a fact that on similar facts, proceedings Under Section 271D'were initiated for violation of provisions of Section 269SS. But such proceedings were dropped in both the cases, perhaps for the reason that the impugned transactions were neither loans nor deposits. In order to attract the provisions of Section 271E, the onus is on the Revenue to establish that the repayments made were either for loans or for deposits. But in the present case, the Revenue has failed to establish that repayments made by the companies were for loans or deposits. The provisions of Sub-Section. 269SS and 269T have been introduced in the Act with a view to curb the black money. In the present cases, the source of amounts received or repaid are not in doubt. In fact, copies of the assessment orders in both the cases have been placed on our file. The same do not show that any additions on this account were made or any transaction was considered as unexplained. These provisions cannot be used for blocking the day-to-day normal transactions. Otherwise it would be very difficult for anybody to run its business. In the present cases, the amounts have been given and repaid in the normal course of assessee's business and all these transactions are bona fide. Therefore, penalty Under Section 271E is not attracted in both the cases. If at all there is any fault on the part of the assessees, the same is only of technical nature and no penalty is leviable for such technical or venial default. The Revenue has failed to establish that the assessees were guilty of conduct contumacious or dishonest, or acted in conscious disregard of statutory obligations. Reliance in this regard is placed on the judgment of the Hon'ble Supreme Court in the case of Hindustan Steel Ltd. vs. State of Orissa . In the light of these facts and circumstances of the case and the legal position discussed above, we are of the considered opinion that the CIT(A) was justified in cancelling the impugned penalty in both the cases. The orders of CIT(A) do not suffer from any legal or factual infirmity. Therefore, the same are confirmed and respective grounds of appeals are dismissed.
7. In the result, appeals are dismissed.