R.BHOOMA ASSISTANT COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE3(1), CHENNAI vs. M/S. STAHL INDIA PVT.LTD, KANCHIPURAM

PDF · subscribers
ITA 322/CHNY/2023Status: DisposedITAT Chennai26 July 2023AY 2013-143 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that since the repayment was made by way of book entry and there was no actual movement of money, Section 269T was not violated. Therefore, the penalty under Section 271E was not sustainable.

What were the facts?

The Assessing Officer levied a penalty under Section 271E for repayment of Rs. 106.73 Lacs otherwise than by account payee cheque. The assessee adjusted this amount against sales made to the other party through book entry.

What were the issues?

Whether a penalty under Section 271E is leviable when an amount is adjusted by way of book entry against outstanding dues, without any actual cash or cheque transaction.

Which sections of the Income-tax Act were involved?

Section 271E,Section 269T

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, CHENNAI

Before: HON’BLE SHRI V. DURGA RAO, JM & HON’BLE SHRI MANOJ KUMAR AGGARWAL, AM

O R D E R Manoj Kumar Aggarwal (Accountant Member) 1. Aggrieved by deletion of penalty u/s 271E for Rs.106.73 Lacs for Assessment Year (AY) 2013-14 by first appellate authority vide impugned order dated 16.01.2023, the revenue is in further appeal before us. The impugned order has been passed by learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] on 16-01-2023 in the matter of impugned penalty levied by Ld. Assessing Officer [AO] u/s. 271E of the Act vide order dated 28-02-2022. The grounds taken by the Revenue read as under:

1. 1. The order of the learned CIT(A) is contrary to law and facts and circumstances of the case.

1.

2. The Ld. CIT(A) erred in holding that the penalty levied u/s.271FE does not sustain as there is no violation of section 269t of the IT Act 1961, in this case.

3. The Ld. CIT(A) ought to have appreciated the fact that the decision rendered in the case of Pr. Commissioner of Income Tax Vs. Shakti Foundation reported in (2019) 107 teaxman.com 459 has not been accepted by the Revenue and SLP has been filed before the Supreme Court, which has been admitted by the Supreme Court.

Having heard rival submissions and after perusal of case records, the appeal is disposed-off as under.

2.

The Ld. AO levied impugned penalty u/s 271E for violation of provisions of Sec.269T on the ground that the assessee repaid amount of Rs.106.73 Lacs to M/s Sri Manjubhasini Chemicals (P) Ltd. (SMCPL) otherwise than by way of account payee cheque or bank draft.

3.

Upon further appeal, Ld. CIT(A) deleted the penalty on the ground that the amount payable to SMCPL was adjusted against amount receivable on sales made by assessee to SMCPL. The repayment to SMCPL was made by way of book entry and there was no movement of money in the form of cash or any other means. Therefore, the provisions of Sec.269T would not apply and the impugned penalty would not survive in terms of various judicial decisions. Aggrieved, the revenue is in further appeal before us.

4.

We find that the basic facts are not in dispute. Upon perusal of tabulation made in para 6.2 and findings rendered in para 6.3 of the impugned order, it could be seen that the total outstanding against SMCPL has fully been adjusted by way of book entry against sales made by assessee to that entity. There was no money transaction. Therefore, the ratio of judicial decisions including the decision of Hon’ble Rajasthan High Court in the case of Pr. CIT vs. Shakti Foundation (107 Taxmann.com 459) as well as other decisions of other High Courts would apply supporting the view taken by Ld. CIT(A). Hence, no interference is warranted in the same.

5.

The appeal stand dismissed. Order pronounced on 26th July, 2023.

More judgments on Section 271E

All 968 judgments and leading authorities on Section 271E →

Recent GST High Court judgments

Search GST case law →