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Facts
The assessee filed an appeal against the order of the CIT(A) which dismissed their appeal. The appeal pertains to the assessment year 2014-15. The assessee had received loans in cash of Rs. 20,000/- or more on several occasions, which was a violation of Section 269SS of the Act, leading to a penalty under Section 271D.
Held
The Tribunal condoned the delay in filing the appeal, finding that the assessee had shown bonafide and reasonable cause. The Tribunal set aside the impugned order and remanded the matter back to the CIT(A) for a fresh adjudication on denova basis, giving one last opportunity to the assessee to represent its case.
Key Issues
Whether the CIT(A) erred in dismissing the appeal without providing a proper opportunity to the assessee and whether the penalty levied under Section 271D was justified.
Sections Cited
253, 250, 143(3), 269SS, 271D, 271E, 246A
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI BHAGIRATH MAL BIYANI, ACCOUNTANT & SHRI PARESH M JOSHI
आदेश / O R D E R
Per Paresh M Joshi, J.M.:
This is an appeal filed by the Assessee Under Section 253 of the Income Tax Act, 1961 (hereinafter referred to as the Act for sake of brevity) before this Tribunal as and by way second appeal. The assessee is aggrieved by order bearing Number ITBA/NFAC/S/ 250/2023-24/1056043913(1) dated 13.09.2023 Page 1 of 9 hereinafter referred to as the “impugned order”. The relevant Assessment Year is 2014-15 and the corresponding previous year period is from 01.04.2013 to 31.03.2014.
At the outset registry has pointed out delay of 152 days.
The Ld. AR for and on behalf of the assessee has taken us through condonation of delay application which is supported by affidavit in support of condonation of delay application. The Ld. AR inter alia has contended before us that assesse’s net-worth is poor/bad since some time now. There are now no students. In fact, they have applied for closure of institute. There are many administrative issues and also financial difficulties. There is liquidity crunch. No tuition fees are received. These contentions were raised basis documents i.e. balance sheets dated 31.03.2023 & 31.03.2024.
Per contra Ld. DR has opposed condonation of delay but has not been successfully able to label the same basis documents. In view thereof, we condone the delay for which
Page 2 of 9 condoned. Matter admitted and taken up for hearing.
FACTUAL MATRIX 2.1 That the return of Income (ROI) for Assessment Year 2014- 15 was filed on 31.10.2014 declaring total income at Rs.NIL.
2.2 That the case of the assessee was selected under scrutiny and assessment was done u/s 143(3) of the Act on 29.12.2016 and assessed income of Rs.1,17,65,000/- was determined.
2.3 That during the assessment proceedings the Assessing Officer passed order U/s 143(3) of the Act on 29.12.2016. In the said quantum assessment order at para No.4 it was found that the assessee Society/Trust had received loan in cash of Rs.20,000/- or of more amounts in a day which is a restricted/prohibited in terms of Section 269SS of the Act.
2.4 That the assessee was given opportunity to file his reply on proposed imposition of the penalty U/s 271D and 271E of the Act but neither the assessee filed any reply nor attended the proceedings in order to avail opportunity provided. Due to Page 3 of 9 opportunity to file any reply to which assessee filed a reply which was not found to be suitable and satisfactory.
2.5 Assessee contended and claimed that no loan is received but it collected money on account of sale of books, dress materials etc. However this claim of the assessee was not found to be acceptable as from the statement of Profit & Loss accounts for the year ended 31.03.2014 of M/s Takshshila Institute for Management and Technology it is just not visible or seen that any expenses of books, dress materials etc. were incurred. Hence the assertion of the assessee that it collected money on account of sale of books, dress materials or argument/contention that it is payment from creditors does not hold good. Further revenue of M/s Takshshila Institute for Management and Technology is received from bus fee, hostel fee, hostel registration fee and mess fee. That there is no revenue received for books, dress materials.
Further neither the assessee has spent for any books and dress materials nor the assessee has received any revenue for these items then how it can transfer to M/s Science Forum for Rural
Page 4 of 9 materials (sale). Further the assessee books of accounts mentions that amounts are loan received in cash.
2.6 That in view of the aforesaid facts and discussions the Ld. A.O was satisfied that the assessee indeed had received loan in cash of Rs.20,000/- or more in a day which perse was violation of Section 269SS of the Act consequently penalty U/s 271D of the Act.
2.7 That Ld. A.O has levied penalty U/s 271D which is tabulated below:-
Date of loan Name of the persons to Penalty u/s 271D received whom loan received in amount of loan received cash in cash Rs.20,000 or Sh./Smt. more 02.04.2013 Takshshila Institute of 3,35,000 Management and Technology 11.10.2013 -do- 1,00,000 29.10.2013 -do- 3,35,000 10.11.2013 -do- 1,00,000 18.03.2014 -do- 1,95,000 Total penalty amount U/s 271D 10,85,000 2.8 That the aforesaid order of penalty by Ld. Assessing Officer U/s 271D is dated 22.09.2017 which is hereinafter referred to as the “impugned penalty order”.
Page 5 of 9 “impugned penalty order” prefers first appeal U/s 246A of the Act before Ld. CIT(A) who by the “impugned order” has dismissed the appeal of the assessee. The assessee being aggrieved by the “impugned order” has preferred this second appeal U/s 253 of the Act against the “impugned order” and has raised following grounds of appeal against the “impugned order” which are as under:-
“1. That the Ld. CIT(A) erred in rejecting the reply filed by assessee. 2. The Ld. CIT(A) has never asked to submit Form no. 35, Grounds of Appeal
, Statement of Facts, and Penalty Order.
3. That all the required paper, information was submitted by was not properly considered by Ld.CIT(A).
4. The Appellant craves leave to add/alter any of the grounds of appeal before at the time of hearing.”
3. Record of Hearing 3.1 The hearing in the appeal took place before this Tribunal on 12.03.2025 when Ld. DR brought to our notice that the “impugned order” is illegal, bad in law and not proper. It should therefore be set aside by this Tribunal. The Ld. AR pleaded that even in the “impugned penalty order” no opportunity was Page 6 of 9 before Ld. CIT(A) hence there is violation of the principles of natural justice vitiating the “impugned order”. The Ld. AR pleaded that if one more opportunity is afforded to the assessee before Ld. CIT(A) as last and final opportunity they would furnish each and every details which Ld. CIT(A) may desire. Per contra Ld. DR for and on behalf of the Revenue interalia also stated that Revenue has no objection if this Tribunal desires to remand back the matter back to the file of Ld. CIT(A).
Observations & findings & conclusions 4.1 We now have to decide the legality, validity and proprietary of the “impugned order” basis records of the case and after examining rival contentions canvassed before us.
4.2 After examining the records of the case minutely we are of the considered view that in order to meet the ends of justice or more opportunity as and by way of final opportunity should be afforded to the assessee to fully represent its case for Ld. CIT(A).
The assessee is directed to place on record before Ld. CIT(A) Form No.35, statement of facts, grounds of appeal and such other
Page 7 of 9 more opportunity to assessee as and by way of final opportunity before adjudicating and adjudicating first appeal. The assessee shall cooperate with Department and shall not seek any unnecessary adjournment. The Ld. CIT(A) is also directed to decide first appeal as expeditiously as possible.
Order 5.1 In the premises drawn by us, we set aside the impugned order as and by way of Remand on Denova basis.
5.2 In result appeal of assessee is allowed for statistical purpose.
Order pronounced in open court on 17.03.2025.