KAMALJEET KAUR GILL,RAIPUR vs. JOINT COMMISSIONER OF INCOME TAX-RANGE 3, RAIPUR

The captioned appeals filed by the assessee are directed against the respective orders passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 25.10.2022 which in turn arises from the order passed by the JCIT, Range-3, Raipur u/s.271E of the Income-tax Act, 1961 (for short ‘Act’), dated 28.12.2018 for A.Ys. 2012-13, 2013-14 & 2015-16. As common issues are involved in the appeals mentioned above, the same are being taken up and disposed of together by way of a consolidated order.

We shall take up the appeal in for the assessment year 2012-13 as the lead matter, and the order therein passed shall apply mutatis-mutandis to the remaining cases. The assessee has assailed the impugned order of the CIT(Appeals) on the following grounds of appeal: “1. On the facts and in the circumstances of the case, the CIT(A), NFAC has erred in confirming the order of the JCIT, Range-3, Raipur, wherein the Joint Commissioner of Income Tax-Range-3, Raipur has erred in imposing penalty of Rs.14,59,688/- u/s.271E of the Income Tax Act, 1961. Thus the order passed by the JCIT, Range-3, Raipur and confirmed by the CIT(A), NFAC is unjustified, unwarranted and uncalled for and deserves to be deleted.

Succinctly stated the assessee had filed her return of income for 2012- 13, declaring an income of Rs.4,75,290/-. The assessment was thereafter framed in the case of the assessee u/s.143(3) r.w.s. 147 of the Act on 23.12.2017, determining income at Rs.28,35,570/-.

During the course of assessment proceedings, it was observed by the A.O. that the assessee had made repayment of loans in cash to M/s.Tata Finance Corporation for the financing of buses, as under:

Based on information received from the A.O., the JCIT initiated penalty proceedings u/s. 271E of the Act. Notice u/s.274 r.w.s. 271E of the Act was issued on the assessee on 04.06.2018, wherein she was called upon to put

The JCIT, after deliberating on the explanation of the assessee, was not persuaded to subscribe to the same. It was observed by the AO that there was no justification for the assessee to have gone by the instructions of the financers, which were in contravention of the provisions of section 269T of the Act. Apart from that, it was observed by the JCIT that even if the concerned financers, considering their experience with the assessee, were not ready to receive the payments from the assessee by cheque, then she could have made the said payments as per the other prescribed modes, i.e., by demand

On appeal, CIT(A), finding no substance in the assessee's contentions, dismissed the appeal.

The assessee, being aggrieved with the order of the CIT(A), has carried the matter in appeal before us.

We have heard the ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the Learned Authorized Representative (for short ‘AR’) for the assessee to drive home his contentions.

The Ld. AR for the assessee, at the very outset of the hearing of the appeal, had fairly admitted that the issue involved in the present appeal was squarely covered against the assessee by the order passed by Tribunal involving identical facts in the case of her relative viz., Sandeep Kaur Gill Vs. JCIT (Range-3), Raipur (C.G.), dated 28.04.2023.

Admittedly, it is a matter of fact borne from the record that the assessee during the year under consideration had repaid loans aggregating to Rs.14,59,688/- in cash, as under :-

On a perusal of the reply filed by the assessee, it transpires that she had come forth with two reasons for having repaid the loans mentioned above in a manner other than that prescribed u/s. 269T of the Act, viz (i) that as her repayment record was abysmal as the cheques she issued towards repayment of loans in the past were not honored on several occasions;

Before proceeding any further, we deem it fit to cull out the provisions of section 269T of the Act, which reads as under (relevant extract):- “269T. No branch of a banking company or a co-operative bank and no other company or co-operative society and no firm or other person shall repay any loan or deposit made with it [or any specified advance received by it] otherwise than by an account payee cheque or account payee bank draft drawn in the name of the person who has made the loan or deposit[ or paid the specified advance], [or by use of electronic clearing system through a bank account [or through such other electronic mode as may be prescribed]……………………………………………..”

On a perusal of the aforesaid statutory provision, the same contemplates the prescribed modes for repayment of a loan exceeding the specified amount, viz (i). vide account payee cheque; (ii). vide account payee bank draft; (iii) use of the electronic system through a bank account; and (iv) through such other electronic mode as may be prescribed. Based on the aforesaid multiple methods of repayment of loan as envisaged in section 269T of the Act, we are of the considered view that even if the financers, on account of the poor track record of the assessee, were not ready and willing to receive the monthly installments towards repayment of loans from her through cheques, then she could have safely made the said repayments by way of account payee bank drafts or electronic clearing system through her bank account or any other

Also, we do not find any substance in the assessee's claim that she was unaware of the provisions of section 269T of the Act. It is a matter of fact borne from the record that the assessee was availing the services of a Chartered Accountant and had got her accounts for the year under consideration audited from him. Considering the aforesaid factual position, and independent of the settled position of law that an assessee cannot be allowed to plead ignorance of the law, we are even otherwise of the considered view that there is no substance and merit in the claim of the assessee that she was oblivion of the modes and manner for repayment of loans as prescribed under section 269T of the Act.

Apropos the support drawn by the assessee from the fact that a similar penalty that was imposed in the case of her nephew, viz Shri Ajay Gill, had been vacated by the CIT(A), NFAC, we are of a firm conviction that as the facts involved in every case stand on their independent footing, therefore, her claim above would be of no assistance.

Based on our observations above, we are of the considered view that as the assessee had not only failed to comply with the provisions of section 269T of the Act, which therein had rendered her liable for imposition of penalty u/s. 271E of the Act but had also failed to come forth with any reasonable cause which had prevented her from making repayment of the monthly installments of her outstanding loans in a manner prescribed under the law, therefore, finding no infirmity in the imposition of penalty of Rs. 14,59,688/- u/s 271E of the Act by the JCIT, we uphold the same.

Resultantly, the appeal filed by the assessee in for A.Y.2012-13 is dismissed in terms of our observations above. & 253/RPR/2022 A.Ys.2013-14 & 2015-16

As the facts and issues involved in the captioned appeals remain the same as were there before us in the assessee’s appeal in for assessment year 2012-13, therefore, our order therein passed while disposing off the said appeal shall apply mutatis-mutandis for disposing off the captioned appeals i.e., ITA Nos.252 & 253/RPR/2022 for assessment years 2013-14 & 2015-16. In these cases also, finding no infirmity

Resultantly, appeals of the assessee in & 253/RPR/2022 for A.Ys.2013-14 & 2015-16 are dismissed in terms of our observations above.

In the combined result, all the captioned appeals of the assessee are dismissed in terms of our observations above.