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आयकर अपीलीय अिधकरण,च"ीगढ़ "ायपीठ “ए” , च"ीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH HEARING THROUGH: HYBRID MODE "ी िव"म िसंह यादव, लेखा सद" एवं "ी परेश म. जोशी, "ाियक सद" BEFORE: SHRI. VIKRAM SINGH YADAV, AM & SHRI. PARESH M. JOSHI, JM आयकर अपील सं./ िनधा"रण वष" / Assessment Year : 2018-19 Inder Pal Singh बनाम The ITO Legal Heir of deceased Satnam Singh Ward-1, Jagraon, Punjab 171789, Street No. 8, Guru Teg Bahadur, Jagraon, Punjab "ायी लेखा सं./PAN NO: ADTPS1546D अपीलाथ"/Appellant ""थ"/Respondent िनधा"रती की ओर से/Assessee by : Shri Kushal Chopra, C.A राज" की ओर से/ Revenue by : Shri Rohit Sharma, CIT DR सुनवाई की तारीख/Date of Hearing : 31/07/2024 उदघोषणा की तारीख/Date of Pronouncement : 12/08/2024 आदेश/Order PER PARESH M. JOSHI, J.M. :
This is an appeal filed by the Assessee under section 253 of the Income Tax Act, 1961. The assessee is aggrieved by the Order No. ITBA/NFAC/S/250/2023- 24/1056979491(1) dated 11/10/2023 of Ld. CIT(A) passed under section 250 of the Income Tax Act, 1961 which is hereinafter referred to as “impugned order”. Brief Factual Matrix 2. In the instant case, penalty proceedings were initiated against the assessee for A.Y. 2018-19 and penalty of Rs. 1,04,00,000/- was imposed u/s 271DA. The contravention is under Section 269ST of the Act. The order of Ld. AO is dated 16/03/2022.
An information was received from DCIT, Central) Cir-2, Ludhiana vide letter No. ITBA/COM/F/17/2021-22/1033127382(1) Dt. 27.05.2021 that during the course of assessment proceedings in the case of M/s Laxmi Traders [PAN; AAGFL2688B] for the A.Y. 2018-19, it is noticed that the assessee is one of the partner in the firm m/s. Jai Shree Ganesh & Co. and has withdrawn and received cash on various dates from M/s. Jai Shree Ganesh & Co. amounting to Rs. 1,04,00,000/- (multiple entries of Rs. 2,00,000/- per day). The details of said withdrawals are as under:
Sr. No. Date Particulars Vch. No. Debit 01. 1/4/2017 To Cash 2 2,00,000 02 2/4/2017 To Cash 11 2,00,000 03 3/4/2017 To Cash 21 2,00,000 04 4/4/2017 To Cash 28 2,00,000 05 5/4/2017 To Cash 38 2,00,000 06 6/4/2017 To Cash 49 2,00,000 07 7/4/2017 To Cash 59 2,00,000 08 8/4/2017 To Cash 67 2,00,000 09 9/4/2017 To Cash 75 2,00,000 10 10/4/2017 To Cash 85 2,00,000 11 11/4/2017 To Cash 93 2,00,000 12 12/4/2017 To Cash 98 2,00,000 13 13/4/2017 To Cash 104 2,00,000 14 14/4/2017 To Cash 109 2,00,000 15 15/4/2017 To Cash 115 2,00,000 16 16/4/2017 To Cash 121 2,00,000 17 17/4/2017 To Cash 126 2,00,000 18 18/4/2017 To Cash 131 2,00,000 19 19/4/2017 To Cash 136 2,00,000 20 20/4/2017 To Cash 139 2,00,000 21 21/4/2017 To Cash 145 2,00,000 22 22/4/2017 To Cash 149 2,00,000 23 23/4/2017 To Cash 154 2,00,000 24 24/4/2017 To Cash 160 2,00,000 25 25/4/2017 To Cash 163 2,00,000 26 26/4/2017 To Cash 172 2,00,000 27 27/4/2017 To Cash 175 2,00,000 28 28/4/2017 To Cash 178 2,00,000 29 29/4/2017 To Cash 183 2,00,000 30 30/4/2017 To Gash 186 2,00,000 31 10/5/2017 To Cash 219 2,00,000 32 11/5/2017 To Cash 224 2,00,000 33 12/5/2017 To Cash 229 2,00,000 34 13/5/2017 To Cash 233 2,00,000 35 14/5/2017 To Cash 237 2,00,000 36 15/5/2017 To Cash 241 2,00,000 37 16/5/2017 To Cash 246 2,00,000 38 17/5/2017 To Cash 250 2,00,000 39 18/5/2017 To Cash 254 2,00,000 40 19/5/2017 To Cash 258 2,00,000 41 15/2/2018 To Cash 1039 2,00,000 42 16/2/2018 To Cash 1042 2,00,000 43 17/2/2018 To Cash 1045 2,00,000 44 18/2/2018 To Cash '1048 2,00,000 45 19/2/2018 To Cash 1050 2,00,000 46 20/2/2018 To Cash 1054 2,00,000 47 21/2/2018 To Cash 1057 2,00,000 48 22/2/2018 To Cash 1059 2,00,000 49 23/2/2018 To Cash 1061 2,00,000 50 24/2/2018 To Cash 1063 2,00,000 51 25/2/2018 To Cash 1065 2,00,000 52 26/2/2018 To Cash 1067 2,00,000 TOTAL 1,04,00,000
From the above chart, it is evident that the assesses has received cash of 2,00,000/- each per day, on multiple occasions from a firm M/s. jat Shree Ganesh & Co. and thus he has violated the provisions of Sect 269ST of the Act, A perusal of section 269ST reveals that it bars any 'person' from receiving an amount of Two lakh rupees or more (a) in aggregate from a person in a day; or (b) in respect of single transaction; or (c) in respect of transactions relating to one event or occasion from a person, otherwise than by account payee cheque or account payee bank draft or use of electronic clearing system through a [bank account or through such other electronic mode as may be prescribed].
In the instant case, the assesse has received Rs. 2,00,000/- per day, on multiple occasions form M/s. Jai Shree Ganesh & Co, in cash i.e. otherwise than account payee cheque/bank draft or use of electronic clearing system. This act of the assasse is nothing but contravention of provisions of Sect 269ST of the I.T. Act, and therefore he is liable for the penalty u/s. 271 DA of the I.T. Act Consequent to above, a show cause notice u/s. 274 r.w.s 271 DA of the Act was issued on 19.08.2021 requiring the assessee to explain as to why penalty u/s. 271 DA should not be imposed for his failure to comply with the provisions of Sect. 269ST of the Act. Assessee did not furnish any explanation in response to said notice. Hence, another notice u/s 274 r.w.s 271DA was issued to the assessee on 04.02.2022 requiring his compliance on 10.02.2022. However assessee failed to comply with this notice too. Further, a non responsive reference was raised through Insight Portal on 19.02.20222 and letter was issued to the assessee requiring him to respond within 7 days. However, there is no response from the assessee even after ? days. In the circumstances it is construed that the assesse has no plausible explanation to offer in response to show cause notices issued u/s. 271 DA of the I.T. Act. In the circumstances, the assesse has made himself liable for imposition of penalty u/s, 271 DA of the I.T. Act.
The relevant provision of Section 271DA and Section 269ST are reproduced below:
Section 271 DA- Penalty for failure to comply with the provisions of section 269ST. 271 DA. (1) If a person receives any sum in contravention of the provisions of section 269S7. he shall be liable to pay, by way of penalty, a sum equal to the amount of such receipt
Section 269ST. Mode of undertaking transactions No person shall receive an amount of two lakh rupees or more - (a) in aggregate from a person in a day; or (b) in respect of single transaction; or (c) in respect of transactions relating to one event or occasion from a person, otherwise than by account payee cheque or account payee bank draft or use of electronic clearing system through a [bank account or through such other electronic mode as may be prescribed].
That in the order of Ld. AO dated 16/03/2022 following finding is recorded: 7. As discussed in the preceding paragraphs, the assesse despite of offering opportunities by issuing show cause notices, has not submitted any explanation with relevant documentary evidence in respect of cash receipts of Rs. 2 lakhs per day, on multiple occasions, as detailed in para 2 above. In the circumstances it is construed that the assesse has no explanation of offer in response to show cause notices issued u/s. 271 DA of the IT. Act.
Thus on the basis of the above discussion, it is concluded that this is fit case for imposition of penalty u/s.271DA of the I.T.Act, Therefore, as per provisions of section 271 DA the Act, the assesse© would be liable to pay penalty a sum equal to the amount of cash of Rs. 2 lakhs per day [received on multiple occasions] totaling to Rs. 1,04,00,000/-, in contravention of provisions of Sect. 269ST of the Act.
From the above discussion, 1 am satisfied that it is justified to levy the penalty u/s, 271 DA of the Act of Rs. 1,04,00,000/- Which is equal to amount received, by the assessee in cash of Rs, 1,04,00,000/- in contravention of provisions of Sect. 269ST of the Act. Accordingly the Penalty of Rs. 1,04,00,000/- is levied u/s. 271 DA of the l.T. Act.
The assessee being aggrieved by the order of Ld. AO dated 16/03/2022 preferred first appeal before the Ld. CIT(A) who by impugned order has sustained the order of Ld. AO dt. 16.03.2022.
8. The assessee being aggrieved by the impugned order of Ld. CIT(A) has preferred an appeal in Form No. 36 before us and interalia has raised following grounds of appeal:
1. That the Ld. CIT(A), National Faceless Appeal Centre, New Delhi has erred in passing the ex-parte order and confirming the levy of penalty u/s 271 DA to the tune of Rs. 1,04,00,000/- on account of alleged violation of section 269ST.
2. That no proper or reasonable opportunity has been afforded to the appellant to represent the case since no notice was received on the email of assessee or on the email of his counsel or through physical mode. That the levy of penalty even otherwise is against the facts and 3. circumstances of the case.
4. That the appellant craves leave to add or amend the grounds of appeal
before the appeal is finally heard or disposed off. Record of Hearing
9. The hearing in the appeal took place on 31/07/2024 when both the parties appeared before us. At the outset and threshold the Ld. AR cotended that impugned order is in violation of the principles of natural justice in as much as no opportunity of hearing was given to the assesse. The Ld. AR interalia further contended that in Form No. 35 which is a form for filling an appeal before Ld. CIT(A) against column no:- e-mail address they had given e-mail address as “ advocate mpsinghoffice@gmail.com. It was further contended that no notice came at said e-mail address consequently “impugned order” came to be passed which is exparte order and therefore same should be set aside being in violation of the principles of natural justice. The Ld. DR fairly agreed to the contentions of the Ld. AR. Findings and Conclusions
10. Delay of 38 days is condoned on basis of affidavit filed and for delay reasonable cause is shown. Delay condoned. After carefully perusing the impugned order we notice that “notice of hearing” was issued on 12/12/2022, 05/09/2023, 15/09/2023 and 21/09/2023 and it is claimed to have been served on registered email id of assessee. The email id which was on record i.e; advocate mpsinghoffice@gmail.com, no notice came to be served. Consequently assessee could not appear and matter was decided exparte. We notice that for purpose of notice / communication email address in Form No. 35 is of “advocatempsinghoffice@gmail.com on which no notice came to be served. The Ld. DR too has accepted this factual position. We notice from paper book filed that notice was served on email address “spsingh212@gmail.com” which was not as per form
35. Order
11. Accordingly, we hold that impugned order is in violation of the principles of natural justice as no opportunity was provided to the asseessee before passing the impugned order. We therefore set aside the impugned order and remand the case to Ld. CIT(A) on denovo basis. We direct Ld. CIT(A) to give proper opportunity to the assessee and pass a speaking and a well reasoned order on merit simultaneously we direct asessee to cooperate with the Department in disposal of the appeal. The CIT(A) to decide the Appeal as expeditiously as possible preferably within a period of six months from date of receipt of this order. Accordingly, the appeal of the assessee is allowed as and by way of remand on denovo basis with direction as aforesaid.
12. In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 12/08/2024 िव"म िसंह यादव परेश म. जोशी ( VIKRAM SINGH YADAV) (PARESH M. JOSHI) लेखा सद"/ ACCOUNTANT MEMBER "ाियक सद" / JUDICIAL MEMBER AG