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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: SHRI VIJAY PAL RAO & SHRI B.M. BIYANI
This appeal by the assessee is directed against the order dated 30.03.2022 of Commissioner of Income Tax(Appeal), National Faceless Appeal Centre, Delhi arising from penalty order passed u/s 271D of the Income Tax Act for Assessment Year 2020-21. The assessee has raised following grounds of appeal:
“1. On the facts and circumstances of the case and in law the learned Commissioner of Income tax (Appeals) ("CIT(A)") erred in confirming penalty under Section 271D of the Income Tax Act. The Appellant prays that the said penalty be directed to be deleted. 2. Without prejudice to above, on the facts and circumstances of the case and in law the learned Commissioner of Income tax (Appeals) ("CIT(A)") erred in confirming the penalty by failing to appreciate the Page 1 of 4 Chetandas Sablani Page 2 of 4 existence of reasonable cause as contemplated under Section 273B of the Act, behind the impugned transactions where penalty ought not to have been confirmed. Accordingly, the Appellant prays that the said penalty be directed to be deleted.
On the facts and circumstances of the case and in law the learned CIT(A) erred in confirming the penalty by passing an order which is illegal, unwarranted and uncalled for and thus is prayed to be quashed.
4. The Appellant craves leave to add to, alter and/or amend all or any of the foregoing grounds of appeal.”
2. The assesse is an individual deriving income from sales of mobile and Toys from his shop in Burhanpur. An amount of Rs.8 lacs was seized from the assessee by Executive Magistrate during the checking at Burhanpur Railway Station on 24.04.2019. Accordingly, the income tax department was informed about the seized cash from the assesse. In his statement the assessee explained that this amount was taken as loan from one Shri Baliram Chaudhary a farmer. The AO accepted the source of the seized amount however, initiated the penalty proceedings u/s 271D for default u/s 269SS on account of accepting cash exceeding Rs.20,000/-. The AO after considering the statements of the assesse as well as of Shri Baliram Chaudhary recorded by the Nodal Officer during the course of checking levied penalty of Rs.8 lacs u/s 271D of the Act vide order dated 05.02.2020. The assessee challenged the levy of penalty before the Ld. CIT(A) however, the appeal filed by the assesse was dismissed and order of the Assessing Officer passed u/s 271D was confirmed as the assesse did not respond to the various notices issued by the Ld. CIT(A).
3. Before the Tribunal the Ld. AR of the assesse has submitted that this amount was taken by the assesse for purchase of business goods on the occasion of festival. Further the loan was taken from a farmer in cash out of his agricultural income. The AO has accepted the genuineness of the cash loan of Rs. 8 lacs but levied for non-compliance of section 269SS. Once it is a case of business exigency and loan taken from a farmer which falls in the exception provided u/s 269SS and consequently, the penalty
Chetandas Sablani Page 3 of 4 levied by the AO is not justified. He has relied upon the following decisions:
1.Balaji Traders vs. DCIT 78 ITD 368 (Pune) 2. Dr. Deepak Muchala vs. ITO 58 TTJ 524 3. Rajiana Kheti Stor vs. ITO 20 SOT 3
On the other hand, Ld. DR has submitted that no explanation was furnished by the assessee before ld. CIT(A), therefore, at the most the matter may be set aside to the record of the CIT(A) for giving one more opportunity of hearing to the assesse to explain the reasons for taking loan in violation of provision of section 269SS.
We have considered the rival submission as well as relevant material on record. The Ld. CIT(A) has upheld the levy of penalty by recording the fact as under:
“5. To afford the appellant an opportunity of being heard, notices u/s 250 were issued on 27.03.2021, 04.12.2021, 28.12.2021 and 10.03.2022. Despite repeated opportunity, the appellant has not filed any written submission in support of the grounds. Under these circumstances, the appeal is being decided on the basis of the facts available on the record. The decision covering all the grounds of appeal is being given as under: 6.Decision In his statement dated 15.05.2019, the appellant has clearly mentioned that the sum of Rs. 8,00,000/- was received by him in cash from Shri Baliram Chaudhary. The same fact has been confirmed by Shri Baliram Chaudhary in his statement dated 15.05.2019. Thus the uncontroverted facts of the case clearly establish that there has been a violation of the provisions of section 269SS. Under these circumstances, the penal provisions as given/u/s 2710 would get attracted unless the assesse is able to prove that the violation was caused due to an unavoidable situation and there was a reasonable cause for the same. Unfortunately the appellant has not brought anything on record which would establish any reasonable cause for the default. Hence there is no option but to confirm the penalty imposed by the JCIT u/s 271D.”
6. Thus, it is manifest from the order of the Ld. CIT(A) that despite four notices issued the assesse has not filed any written submissions in Page 3 of 4
Chetandas Sablani Page 4 of 4 support of the grounds. Even before the Tribunal the assessee has not produced any record to substantiate the claim that the cash loan taken by the assessee falls in the exception provided u/s 269SS or bonafide explanation u/s 273B not attraction the penalty u/s 271D of the Act. Accordingly, in the facts and circumstances of the case and in the interest of justice, we are of the considered opinion that the assesse be given one more opportunity to explain his case before the Ld. CIT(A). Hence the impugned order of the Ld. CIT(A) is set aside and matter is remanded to the record of the Ld. CIT(A) for deciding the same afresh after giving one more opportunity of hearing to the assesse.
In the result, appeal of assessee is allowed for statistical purpose.
Order pronounced in the open court on 22.06.2023.