B.RAAJARAAJAN,ERODE vs. JCIT, SALEM

आदेश /O R D E R

PER N.R.S. GANESAN, JUDICIAL MEMBER: This appeal of the assessee is directed against the order of the Commissioner of Income Tax (Appeals), Chennai, dated

2 I.T.A. No.1371/Mds/15 30.01.2015, confirming the penalty levied by the Assessing Officer

under Section 271D of the Income-tax Act, 1961 (in short 'the Act').

Tribunal. According to the Ld. counsel, the assessee incurred a huge loss during the financial year 2014-15 in share trading business. Therefore, he could not afford to pay fees for filing appeal

before this Tribunal. The Ld.counsel explained that the assessee was under the bonafide belief that the appeal fee was `10,000/- and

he could not even pay that amount. After clarification, the assessee was advised to pay `500/- as appeal fee for filing appeal against the

penalty order. Even this amount of `500/- could not be paid by the

assessee. With great difficulty, the assessee was able to generate funds and thereafter he was able to file the appeal. Therefore, the Ld.counsel prayed that the delay of 36 days may be condoned.

suffered a loss during the financial year 2014-15. Therefore, he

3 I.T.A. No.1371/Mds/15 could not pay the appeal fee at the relevant point of time for filing

appeal before this Tribunal. This claim of the assessee is not

controverted by the Department. Therefore, this Tribunal is of the

considered opinion that the financial difficulty faced by the assessee

in filing the appeal before this Tribunal has to be construed as

sufficient cause for not filing appeal before this Tribunal.

Accordingly, the delay of 36 days is condoned and the appeal is

admitted.

Bharathan. The assessee also received a sum of ` 1,60,000/- from

his mother Smt. B. Pushpa. Another sum of ` 1,25,000/- was

received by the assessee from one Smt. D. Vijaya, who is his

mother’s sister. According to the Ld. counsel, due to urgent

commercial necessity, the assessee borrowed funds in cash and

deposited the same on the very same day in the bank account for

clearing the cheque issued by the assessee. Referring to the

copies of the bank statements, the Ld.counsel submitted that the

cash received by the assessee from his close relatives were

deposited in the bank account and the same was cleared

immediately on the next day for clearing the cheque. Therefore,

4 I.T.A. No.1371/Mds/15 there was a reasonable cause on the part of the assessee for receiving the amount exceeding `20,000/- in cash.

Representative, submitted that admitted the assessee has received cash exceeding `20,000/- from three persons. There was no

reasonable cause which forced the assessee to receive the money

in cash. Placing reliance on the decision of this Bench of the

Tribunal in Thenamal Chhajjer v. JCIT (2005) 96 ITD 210, the Ld.

D.R. submitted that even for genuine loan or deposit, the assessee

has to explain why it was obtained in cash. If the explanation was

reasonable or acceptable, then penalty may not be levied under

Section 271D of the Act. In this case, there was no explanation

except to say that the assessee needed money urgently for

business purpose. The Ld. D.R. has also placed his reliance on the

judgment of Madras High Court in P.Baskar v. CIT (2012) 340 ITR

560.

perused the relevant material on record. It is not in dispute that the

assessee received money from his own father, mother and mother’s

sister. The assessee filed copies of the bank statements to show

that the amount was deposited in the bank and it was cleared on the

5 I.T.A. No.1371/Mds/15 very next day for honouring the cheque issued by him. This

Tribunal found that the Madras High Court in CIT v. Smt. M.

Yesodha (2013) 351 ITR 265 had an occasion to consider an

identical issue. The Madras High Court found that a transaction

between close relatives, i.e. assessee and his daughter-in-law and

father-in-law, was a reasonable transaction and genuine one due to

urgent necessity in paying the money to seller. In this case also,

the assessee admittedly received cash from his father, mother and

mother’s sister. In view of the close relationship between the

assessee and from whom the money was received, this Tribunal is

of the considered opinion that the judgment of Madras High Court in

Smt. M. Yesodha (supra) is squarely applicable to the facts of the

case. The assessee has also demonstrated that the money

received in cash was deposited in the bank account for clearing the

cheque issued due to commercial expediency. Therefore, this

Tribunal is of the considered opinion that there was a reasonable

cause on the part of the assessee in receiving the money in cash as

found by the Madras High Court in Smt. M. Yesodha (supra).

High Court in P. Baskar (supra). In the case before the High Court,

it is not the case of the assessee that the money was received from

6 I.T.A. No.1371/Mds/15 close relatives. The assessee has received money from various persons. Therefore, this Tribunal is of the considered opinion that the judgment of Madras High Court in P. Baskar (supra) may not be applicable. Similarly, the decision of this Bench of the Tribunal in Thenamal Chhajjer (supra) is also not applicable to the facts of the case, since it was not the case of receiving money from close relatives. Hence, by following the judgment of Madras High Court in Smt. M. Yesodha (supra), the orders of the lower authorities are set aside and the penalty is deleted.

Order pronounced on 21st August, 2015 at Chennai.

sd/- sd/- (चं� पूजार�) (एन.आर.एस. गणेशन) (Chandra Poojari) (N.R.S. Ganesan) लेखा सद�य/Accountant Member �या�यक सद�य/Judicial Member

चे�नई/Chennai, �दनांक/Dated, the 21st August, 2015. Kri.

आदेश क� ��त�ल�प अ�े�षत/Copy to: 1. अपीलाथ�/Appellant 2. ��यथ�/Respondent 3. आयकर आयु�त (अपील)/CIT(A), Chennai-18 4. आयकर आयु�त/CIT, Central II, Chennai 5. �वभागीय ��त�न�ध/DR 6. गाड� फाईल/GF.