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Income Tax Appellate Tribunal, DEHRADUN BENCH, NEW DELHI
Before: Sh. C. N. Prasad & SHRI M. BALAGANESH
O R D E R PER M. BALAGANESH, A. M.: 1. The appeal in AY 2014-15, arise out of the order of the Commissioner of Income Tax (Appeals), Dehradun, [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No. 10489/CIT(A)/DDN/2017-18 dated 29.03.2019 against the order of assessment passed u/s 271D of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 01.01.2018 by the Assessing Officer, ACIT, Range-2, Dehradun (hereinafter referred to as ‘ld. AO’).
The assessee has raised the following grounds of appeal:-
“1. That the Order passed by the Hon'ble Commissioner of Income Tax(Appeals), Dehradun is bad in law, against the facts of the case and principles of natural justice. 2. That the Hon'ble Commissioner of Income Tax (Appeals) has erred in law and on facts in not taking the Assessment Order of the Learned AO in consideration while passing the Appeal order, where there is no mention of unproven source of the funds given by the husband of the Loanee.
That the Hon'ble Commissioner of Income Tax (Appeals), Dehradun has erred in law and on facts in not accepting the fact that the amount of Rs.1,50,000 deposited was in a joint count of both the Appellant and the husband of the Appellant, and as much there was no transaction of give and take in respect of the said sum
3. The only effective issue to be decided in this appeal is as to whether the ld CIT(A) was justified in upholding the levy of penalty u/s 271D of the Act in the sum of Rs. 1,50,000/- in the facts and circumstances of the instant case.
We have heard the rival submission and perused the material available on record. The following facts are not in dispute:-
a) The Assessee purchased a house property for Rs. 75 lakhs. b) The Assessee borrowed unsecured loan from Shri Bikram Singh Bisht (husband) to the tune of Rs. 18,46,320/- which included a sum of Rs. 1,50,000/- received in cash. c) The entire borrowings made by the Assessee from her husband Shri Bikram Singh Bisht is reflected in the balance sheet of the Assessee as on 31.03.2014. d) The fact that Shri Shri Bikram Singh Bisht advanced loan to the Assessee (cash as well cheque loan) is duly reflected in the balance sheet of Shri Bikram Singh Bisht as on 31.03.2014. e) The balance of loan as on 31.03.2014 is reflected in the books of both husband as well as wife at Rs. 26,26,820.05 (debit and credit balance, as the case may be) f) Genuineness of the entire gamut of transaction are not doubted by the revenue.
Since, the fact of Assessee borrowing of Rs. 1,50,000/- in cash is duly reflected in the books of both the parties and in view of the fact that the genuineness of the transactions is not even sought to be doubted by the revenue, we hold that this is not a fit case for levy of penalty u/s 271D of the Act for violation of provision of section 269SS of the Act. In any event, in the instant case, the loan has been borrowed by the Page | 2
Sushila Bisht Assessee only from her husband who had duly confirmed the fact of advancing cash loan by reflecting in his books. Hence, there is no question of any unaccounted income of any person getting converted in the garb of unsecured loan. We find that the ld AR had rightly placed reliance on the decision of the Hon’ble Gujarat High Court in the case of CIT Vs. Bhagwati Prasad Bajoria (HUF) reported in 263 ITR 487 wherein, it has been held as under:-
“In view of the decision of the apex Court upholding the constitutional validity of s. 2965S, penalty under s. 271D could not be set aside on the ground that the provision of s. 2695S is ultra vires the Constitution; however, penalty was not leviable for the reason that the impugned transaction of loan finds place in the books of account of the assessee as well as the lender and none of the authorities found that the transaction was not genuine or that it was a sham transaction to cover up unaccounted money.”
Similar view was taken by the Hon’ble Jharkhand High Court in the case of OMEC Engineers Vs. CIT reported in 294 ITR 599.
It is also pertinent to note that in the instant case both the ld AO as well as the ld CIT(A) had duly agreed with the assessee that she had explained the source for purchase of immovable property beyond reasonable doubt.
We have gone through the quantum assessment order framed in the hands of the Assessee u/s 143(3) of the Act on 04.05.2016 wherein, the ld AO had not even initiated the provisions of section 271D of the Act for alleged violation of provision of section 269SS of the Act by recording satisfaction thereon. This issue is also no longer res integra in view of the decision of the Hon’ble Supreme Court in the case of CIT Vs. Jai laxmi Rice Mills reported in 64 taxmann.com 75 wherein, it was held that when no satisfaction was recorded for initiating the penalty proceedings u/s 271E of the Act in the assessment year, the penalty levied u/s 271E of the Act would not survive.
In view of the aforesaid observations and respectfully following the judicial precedents relied hereinabove, we hold that this is not fit case for Sushila Bisht levy of penalty u/s 271D of the Act. Grounds raised by the Assessee are allowed.
In the result, the appeal of the Assessee is allowed.
Order pronounced in the open court on 15/09/2023.