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Income Tax Appellate Tribunal, MUMBAI BENCH “F”, MUMBAI
Before: SHRI KULDIP SINGH & SHRI S. RIFAUR RAHMAN
Present for: Assessee by : None Revenue by : Shri Nimesh Yadav, D.R. Date of Hearing : 01 . 12 . 2022 Date of Pronouncement : 22 . 12 . 2022 O R D E R Per : Kuldip Singh, Judicial Member: Since common questions of law and facts have been raised in both the inter-connected appeals, the same are being disposed of by way of composite order to avoid repetition of discussion.
2. The appellant, M/s. Vijayalaxmi Metals Pvt. Ltd. (hereinafter referred to as ‘the assessee’) by filing the present appeals, sought to & ors. 2 M/s. Vijayalaxmi Metals Pvt. Ltd.
set aside the impugned orders passed by the National Faceless Appeal Centre(NFAC) [Commissioner of Income Tax (Appeals), Delhi] (hereinafter referred to as CIT(A)] both dated 04.05.2022 confirming the penalty levied by the Assessing Officer (AO) under section 271E & 271D of the Income Tax Act, 1961 (for short ‘the Act’) in appeal bearing & ITA No.1750/M/2022 both for A.Y. 2015-16 respectively on identically worded grounds except the difference in figures inter-alia that:- “1. On the facts and circumstances of the case, Hon'ble Commissioner (Appeals) - NFAC Delhi has erred both on facts and in law in confirming the action of the Ld. Jt Commissioner of Income Tax - Palghar in levying penalty amounting to Rs. 20,14,050 under section 271D of the Act for non-compliance with provisions of section 269SS of the Income Tax Act, 1961
Whether on the facts and circumstances of the case and in law, Hon'ble Commissioner Appeals)-NFAC Delhi justified not holding that the journal entries should enjoy equal immunity on par with account payee cheques and bank drafts.
3. On the facts and circumstances of the case, Hon'ble Commissioner (Appeals) - NFAC Delhi has erred both on facts and in law in confirming the penalty despite the fact that there being a reasonable cause' for non-compliance with provisions of section 269S of the Income Tax Act, 1961.
On the facts and circumstances of the case, Hon'ble Commissioner (Appeals) - NFAC Delhi has erred both on facts and in law in rejecting the contention of the assessee that the assessee was under the bona fide belief that the alleged transaction is not violation of provisions of section 269SS of Income tax Act, 1961.
5. On the facts and circumstances of the case, Hon'ble JCIT has erred both on facts and in law in levying penalty under section 269SS of the Income Tax Act, without establishing the fact that there is receipt of loan in cash exceeding Rs.20,000/-
6. The appellant craves to add, modify or alter any grounds during the course of proceedings.”
& ors. 3 M/s. Vijayalaxmi Metals Pvt. Ltd.
Briefly stated facts necessary for adjudication of the issues at hand are: during the scrutiny proceedings the AO noticed that during the year under consideration the assessee has repaid a loan of Rs.23,83,954/- to Ajay Kumar Singh, P.R. Singh and Omkar Steel Pvt. Ltd. (Rs.4,73,000/- + Rs.1,83,937/- + Rs.17,27,017/- = total Rs.23,83,954/- respectively), otherwise than by way of account payee cheque/draft and thereby violated provisions contained under section 269T of the Act. Similarly, during the year under consideration the AO noticed that the assessee had accepted a loan of Rs.51,00,436/- (Rs.20,26,386/- + Rs.10,60,000/- + Rs.20,14,050/- = Rs.51,00,436/- from Bhagwat Singh, R.S. Singh and Omkar Steel Pvt. Ltd. respectively) otherwise than by way of account payee cheque/draft and thereby violated the provisions contained under section 269SS of the Act. On failure of the assessee to substantiate its claim that the loans were accepted by account payee cheques/drafts the AO proceeded to levy the penalty to the tune of Rs.23,83,954/- and Rs.51,00,436/- under section 271E and under section 271D respectively.
4. Assessee carried the matter before the Ld. CIT(A) by way of filing appeal who has confirmed the penalty levied by the AO under section 271E of the Act. However, the Ld. CIT(A) partly allowed the appeal qua penalty levied by the AO under section 271D of the Act. Feeling aggrieved the assessee has come up before the Tribunal by way of filing present appeal.
Numerous notices were issued to the appellant/assessee by way of RPAD and on 02.11.2022 one Mr. Mangesh Ghanekar, C.A. put in appearance on behalf of the assessee and sought & ors. 4 M/s. Vijayalaxmi Metals Pvt. Ltd.
adjournment, which was granted for 21.09.2022, on which date none appeared on behalf of the assessee and then again notice was issued for 19.10.2022. Again on 19.10.2022 none appeared on behalf of the assessee and notice was issued for 01.12.2022 through RPAD and again one Mr. Mangesh Ghanekar, C.A. sent an application for adjournment through someone which was rejected as the assessee is playing hide and seek with the Bench and consequently aforesaid appeals were disposed of on the basis of material available on record with the assistance of the Ld. D.R. for the Revenue.
We have heard the Ld. Departmental Representative for the Revenue, perused the orders passed by the Ld. Lower Revenue Authorities and documents available on record in the light of the facts and circumstances of the case and case law relied upon.
Undisputedly the AO has levied the penalty in both the cases under section 271E and 271D of the Act for accepting and repaying the loan by the assessee otherwise than by way of account payee cheque/draft on the ground that all the ledger statements submitted by the assessee company are “unsigned” and as such are not admissible in evidence to substantiate the claim of the assessee. It is also not in dispute that during the first appellate proceedings the assessee has submitted bank statement as well as ledger account of the parties from whom the assessee alleged to have accepted and repaid the loan account, regarding which the Ld. CIT(A) has called the remand report from the AO which remained unanswered on the part of the AO. Before the Ld. CIT(A) it is the case of the assessee & ors. 5 M/s. Vijayalaxmi Metals Pvt. Ltd.
that he has accepted the loan through bank which is duly reflected in the ledger as well as bank statement.
The assessee by way of filing statement of facts along with appeal, categorically pleaded that he has duly complied with the show cause notice issued by the AO by bringing on record ledger and bank statement to prove the fact that the said loans were never accepted and repaid in contravention of the provisions contained under section 269SS and 269T of the Act. The AO has simply rejected the submissions of the assessee on technical grounds that the ledger statements are not signed, hence cannot be accepted in evidence.
From the facts narrated in the preceding paras we are of the considered view that this is a case of not providing adequate opportunity of being heard to the assessee nor conducting a proper enquiry into the matter in issue. Even before the Ld. CIT(A) the assessee has filed ledger account along with bank statement which was again not taken into consideration merely on the ground that the AO has not submitted remand report called for by the Ld. CIT(A). To decide the issue once for all and to stop the multiplicity of the proceedings this case is required to be remitted back to the AO to decide afresh after taking into consideration all the documents relied upon by the assessee. Consequently, impugned orders passed by the Ld. CIT(A) is set aside and both the cases are ordered to be remanded back to the AO to decide afresh on merits by taking into account the evidences produced by the assessee before the Ld. CIT(A). & ors. 6 M/s. Vijayalaxmi Metals Pvt. Ltd.
Resultantly, both the appeals filed by the assessee are allowed for statistical purposes.
Order pronounced in the open court on 22.12.2022.