JOINT COMMSSIONER OF INCOME TAX,INTERNATIONAL TAXATION RANGE, HYDERABAD vs. M+W SINGAPORE PTE LIMITED, HYDERABAD

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ITA 344/HYD/2021Status: DisposedITAT Hyderabad24 January 2022AY 2011-123 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the assessee had complied with the banking channels required for repayment. Therefore, the deletion of the penalty by the CIT(A) based on reasonable cause was justified.

What were the facts?

The Revenue appealed against the deletion of a penalty imposed on the assessee for repayment of a loan. The assessee had repaid the loan through electronic clearing systems like NEFT and RTGS.

What were the issues?

Whether repayment of a loan through electronic clearing systems before the amendment of Section 269T in 2015 attracts penalty under Section 271E, and if there was reasonable cause under Section 273B.

Which sections of the Income-tax Act were involved?

Section 271E,Section 269T,Section 273B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Hyderabad ‘ A ‘ Bench, Hyderabad

Before: Shri A.M. Alankamony & Shri S.S. Godara

Hearing: 10/01/2022Pronounced: 20/01/2022

This Revenue’s appeal for the A.Y 2011-12 rise against the order of the CIT (A)-10, Hyderabad, dated 30.06.2021 passed in case No.ITBA/REC/F/154/2021-22/1033907985(1) involving proceedings u/s 143(3) r.w.s. 153C of the Income Tax Act, 1961, in short, the Act.

Heard both the parties. Case file perused.

2.

The Revenue proposes the following substantive ground in the instant appeal: “1. Whether, in the given facts and circumstances of the case, the Ld.CIT(A) was correct in law in deleting the penalty imposed by the Range head u/s 271 E of the Act holding that the repayment of the loan was made through banking channels i.e NEFT, RTGS etc. of 2021 M+W Singapore Pte Ltd Hyderabad and the genuineness of the transactions is also not under doubt.

2. The Ld.CIT(A) erred in grossly ignoring the law in force upto AY 2014-15 that repayment of loan by way of Electronic Clearing System through a bank account was prohibited u/s269T of the Act and amendment of section 269T of the Act by Finance (No.2) Act, 2014 came into effect prospectively from 01.04.2015 i.e., AY 2015-16 and onwards.

3.

Whether, in the given facts and circumstances of the case, the Ld.CIT(A) was correct in law in holding that the provisions of Section 271 E of the Act are not applicable by merely stating that transaction was bonafide and the same was not made with a view to evade tax without appreciating the settled position of law that genuineness of transaction is not a criteria to be considered u/s271E r.w.s 269T of the Act.

4. Whether, in the given facts and circumstances of the case, there was reasonable cause in existence within the meaning of section 273B of the Act, so as to delete the penalty imposed by the Range head u/s271E LW.S 269T of the Act.

5.

The appellant craves leave to add to, amend or modify the above grounds of appeal either before or at the time of hearing of the appeal, if considered necessary”.

3. Suffice to say, it is evident from a perusal of the Revenue’s above extracted pleadings as well as rival contentions that the relevant facts involved herein do not require us to delve much deeper in the instant issue. This is for the reason that although the assessee had duly adopted the electronic clearing system whilst repaying the loan in issue, the Revenue has drawn strong support from the Assessing Officer’s penalty order dated 30.09.2015 that such electronic clearing system(s) could be recognized as a mode of repayment by the Finance Act, 2014 w.e.f. 1.4.2015 only than having any retrospective operation since we are in A.Y 2011-12. We find no substance in Revenue’s instant technical arguments as the assessee has already complied with the banking channels required; although through electronic of 2021 M+W Singapore Pte Ltd Hyderabad clearing system, than by way a/c payee cheque. That being the clinching fact, we hold that the relevant precondition of the approved mode of payment stand sufficiently adhered to. We accordingly hold that the CIT (A) has rightly deleted the impugned penalty of Rs.21,925,751/- by quoting “reasonable cause” in section 273B of the Act in the given facts and circumstances. The Revenue fails in its sole and substantive ground therefore.

4.

This Revenue’s appeal is dismissed.

Order pronounced in the Open Court on 20th January, 2022.

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