Sunil H Masand, Mumbai vs Assessee

IN THE INCOME TAX APPELLATE TRIBUNAL "E" BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JM AND SHRI D. KARUNAKARA RAO, AM

आयकर अपील सं./I.T.A. No.110 & 111 /Mum/2011 ( नधा रण वष / Assessment Year : 2006-07

Shri Sunil H. Masand, बनाम/ Jt. Commissioner of 42, Rajnigandha, Income Tax -Range Vs. Gulmohar Cross Road, 21(2), No. 11, J.V.P.D. Scheme, Mumbai. Mumbai -400 044. थायी ले खा सं . /PAN : AABPM 9185 F (अपीलाथ /Appellant) .. ( यथ / Respondent)

Appellant by Shri S.C. Agrawal Respondent by Shri Neil Philip (D.R)

ु वाई क तार ख / Date of Hearing सन : 06-05-2015 घोषणा क तार ख /Date of Pronouncement : 10-06-2015 [

आदे श / O R D E R PER VIJAY PAL RAO, J.M. :

These two appeals by the assessee are directed against the order dated 26-11-2010 of ld. CIT(A)- 32, Mumbai pertaining to A.Y. 2006-07 and arising from the penalty order passed u/s 271D & 271E of the Income tax Act, 1961.

2. During the year under consideration, the assessee has accepted cash loan of Rs. 1,50,000/- from son and also repaid loan in cash of Rs. 2,80,240/- to his mother. On query from the A.O., the assessee submitted that he was not aware about the provisions of section 269SS and 269T of the Act and since he had only a part time Accountant was not conversant with the provisions, the loan was accepted and repaid due to ignorance. The A.O. held that the reasons given by the assessee are general in nature and does 2 ITA 110 & 111/M/11

not bring out a specific and reasonable cause in accepting and repayment of loan in cash. Thus, the A.O. held that the case of the assessee is not covered under the exemptions provided u/s 269SS and 269T of the Act. The A.O. accordingly levied penalty in respect of loan of Rs. 1,50,000/- u/s 271D and Rs. 2,80,240/- u/s 271E of the Act. The assessee challenged the action of the A.O. before the ld. CIT(A) and reiterated the contention as raised before the A.O. The ld. CIT(A) did not accept the explanation of the assessee and accordingly confirmed the levy of penalty u/s 271D and 271E of the Act.

3. Before us, the ld. Counsel for the assessee submitted that the assessee is a layman and was not aware about the provisions of section 269SS and 269T of the Income Tax Act. The turnover of the assessee during the year under consideration was less than Rs. 40 lacs and therefore the accounts of the asessee were required to be audited. The asessee came to know about the violation of provisions of section 269SS and 269T of the Act only when the tax auditor pointed out to him the same. He has further contended that the transaction was within the family and due to business exigencies the assessee has accepted and repaid the loan in cash. Since there was a reasonable cause and therefore the case of the assessee covered under the provisions of section 273B. In support of his contention, he has relied upon the following decisions:-

l. CIT vs. Sunil Kumar Goel 315 ITR 163 ( P & H)

2. Dr. B Gpanda vs. DCIT 2000 Taxman (II / Taxman 86) Cal.

3. ITO vs. Snil M Kasliwal 2003 (80 T T J) Pune.

4. Skyline Silk Mills vs. ACIT 101 TTJ 798

5. Mohan Karkare vs. CIT 52 ITD 236

6. Shivandan Kaushik 74 ITJ 761 (Chandigarh)

7. Tarlochan Singh 81 ITJ 1021 (Amritsar)

8. Shree Mahavir Industries 82 T T J (Jodhpur) 3 ITA 110 & 111/M/11

9. Bhagwati Prasad Bajoria HUF 263 ITR 487 ( Gauhati)

10. In CIT vs. Manoj Lalwani 260 ITR 590 (Raj) ~

Thus, the ld. Counsel has submitted that the transactions are within the family and due to business exigency, the assessee has established a reasonable cause as per the provisions of section 273B of the Act.

4. On the other hand, the ld. D.R. has submitted that the case of the assesse does not fall under the exemption as provided u/s 269SS and 269T of the Act, therefore, it is a case of gross violation of the provisions and consequently the penalty is attracted. He has relied upon the orders of authorities below.

5. We have considered the rival submissions as well as relevant material placed on record. As far as the violation of the provisions of section 269SS and 269T of the Act, we find that the assessee has violated the said provisions of the Act and the case of the assessee does not fall under the exemptions provided there under. However, the assessee has contended that the acceptance of cash loan and repayment of cash loan are within the family members is due to business exigency and further the assessee was not aware about the provisions of section 269SS and 269T of the Act. The assessee has pleaded that he was under the bonafide belief that such act of accepting and repayment of cash loan with the son and mother of the assessee does not violate any provisions of the Act. The assessee has pleaded that the explanation of the assessee falls under the purview of reasonable cause as per section 273B and, therefore, even if the assessee failed to comply with the provisions of the Act, if the assessee proved that there was a reasonable cause for the said failure, no penalty shall be leviable. We note that the case of the assessee has not been examined by the authorities below in the context of section 273B and accordingly in the facts and circumstances of the case and in the interest of justice, we set aside the matter to the record of the A.O. for 4 ITA 110 & 111/M/11

considering the explanation of the assessee in the context of section 273 B of the Act.

6. In the result, appeals filed by the assessee are allowed for statistical purpose.

Order pronounced in the open court on 10th June, 2015.

आदे श क घोषणा खल ु े #यायालय म% &दनांकः ... 10-06-2015. को क गई ।

Sd/- sd/- (D. KARUNAKARA RAO) (VIJAY PAL RAO) ACCOUNTANT MEMBER JUDICIAL MEMBER मुंबई Mumbai; &दनांक Dated 10-06-2015 [ व.5न.स./ R.K. R.K , Sr. PS

आदे श क! " त$ल%प अ&े%षत/Copy of the Order forwarded to :

1. अपीलाथ / The Appellant

2. यथ / The Respondent.

3. आयकर आयु6त(अपील) / The CIT(A) -32, Mumbai

4. आयकर आय6 ु त / CIT- -City -21 Mumbai

5. 9वभागीय 5त5न;ध, आयकर अपील य अ;धकरण, मुंबई / DR, ITAT, Mumbai E Bench

6. गाड? फाईल / Guard file.

ु ार/ BY ORDER, आदे शानस

स या9पत 5त //True Copy// उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपील य अ धकरण, मुंबई / ITAT, Mumbai