SH. NARESH KUMAR,NEW DELHI vs. JCIT, NEW DELHI

This appeal has been preferred by the assessee against the order dated 28.04.2014 wherein the ld. CIT(A) has confirmed imposition of penalty of Rs. 2 lakh imposed u/s 271D of the Income Tax Act, 1961.

The facts in brief are that information had been received by the ITO Ward 21(1) from ITO, Ward 37(3), New Delhi that the assessee had received/taken a loan of Rs. 2 lakh in cash from Mr. Ashok Arora during the financial year 2000-01. On a show ITA 3946/Del/2014 Assessment Year 2001-02 cause notice being served on the assessee, the assessee appeared before the income tax authorities and his statement was recorded wherein the assessee stated that he had taken the money from Shri Ashok Arora ranging from Rs. 5,000/- to Rs. 20,000/- on various occasions and that he had returned the same along with interest. The assessee also denied ever taking a loan of an amount exceeding Rs. 20,000/- in cash from Shri Ashok Arora.

That any additional ground may be taken at the time of hearing of the appeal.

None appeared for the assessee. A perusal of the order sheet shows that the case was earlier fixed for hearing on 20th February, 2017 but even on that date, none had appeared and even today, when the matter was called for hearing, none was present. Therefore, we proceed to adjudicate on the appeal ex parte the assessee.

Learned Departmental Representative supported the orders of the authorities below and vehemently argued that this was a fit case for imposition of penalty u/s 271D of the Act and, therefore, the same should be confirmed.

We have heard the learned Departmental Representative and have also perused the material on record. A perusal of the impugned order passed by the CIT(A) shows that the penalty has been confirmed on the ground that there was a copy of receipt stating that a sum of Rs. 2 lakh had been taken by the assessee from Shri Ashok Arora for which the assessee had given a post dated cheque of Rs. 3 lakh in advance for the return of the loan amount. Ld. CIT(A) has noted that the case for acceptance of loan of Rs. 2 lakh in cash by the assessee was substantiated on account of preponderance of probability. Before the ld. CIT(A), the assessee had taken the ground that the penalty was imposed based on a forged receipt created by Shri Ashok Arora by putting the assessee’s forged signature on the receipt and that no such loan of Rs. 2 lakh in cash was ever taken by the assessee. He has also contended before the ld. CIT(A) that a complaint u/s 138 r/w 142 of the Negotiable Instrument Act as well as Section 420 of Indian Penal Code was pending before the Court of the Chief Metropolitan Magistrate, Delhi in Complaint No. T-15/2002 which had subsequently been decided in favour of the assessee, which proved that the receipt of Rs. 2 lakh was forged/fabricated.

On an overall factual matrix of the case, we deem it expedient in the interest of justice that the assessee be afforded another opportunity to produce relevant evidences in his favour before the ld. CIT(A). Therefore, without commenting on the merits of the case at this juncture, we restore the issue to the file of the ld. CIT(A) to re-examine the issue in the light of the evidences/explanations to be filed by the assessee in support of his case after affording due opportunity to the assessee. We also add that should the assessee fail to furnish the requisite evidences or appear without justifiable reason before the ld. CIT(A) on the appointed date, the ld. CIT(A) will be at liberty to draw a negative inference and adjudicate accordingly.

In the result, the appeal of the assessee stands allowed for statistical purposes.