Kacharu Madhukar Shinde Vs JCIT (ITAT Delhi)
ITAT Delhi held that penalty u/s 271E of the Income Tax Act leviable on account of repayment of loan in cash in excess of Rs. 20,000 vis-à-vis failure of assessee to prove that such payment is covered by exceptional circumstances covered under section 269T.
Facts- During the assessment proceedings, AO observed that assessee had re-paid loan in cash exceeding Rs.20,000/- aggregating to Rs.5,90,644/- during the F.Y.2009-10. The AO referred the case to the Ld. JCIT. The Ld. JCIT after giving opportunity to the assessee, passed the order under section 271E levied the penalty of Rs.5,90,644/-.
The assessee had accepted that repayment was made in cash. Aggrieved by the penalty order, the assessee filed an appeal before the ld.CIT(A). However, appeal was dismissed. Being aggrieved, the present appeal is filed.
Conclusion- The assessee failed to prove that the payments were made in some exceptional circumstances. As the assessee is not covered by any of the exceptions. Therefore, since the assessee has repaid loan in cash in excess of Rs.20,000/-, the assessee is liable for penalty u/s 271E. Hence, we uphold the penalty u/s 271E. Accordingly the grounds of appeal raised by the assessee are dismissed.
FULL TEXT OF THE ORDER OF ITAT DELHI
This is an appeal filed by the assessee i.e.Kacharu M.Shinde against the order of ld.CIT(A)-2, Pune dated 13.04.2018 for A.Y.2010-11 emanating from the penalty order under section 271E of the Income Tax, dated 27.04.2017 for A.Y. 2010-11. The grounds of appeal raised by the assessee are as under:
“1. In the facts and circumstances of/The case and in law, the learned C.I.T.[A] has erred in confirming the penalty of Rs.5,90,644.00 levied by the learned Assessing Officer u/s 27IE of the I. T. Act 1961. The impugned penalty levied being bad in law, arbitrary, perverse and devoid of merits the same may please be deleted.
2. In the facts and circumstances of the case and in law, both the lower authorities have failed to appreciate that there was no violation of the provisions of Section 27IE of the I. T. Act 1961 and hence the impugned penalty being without jurisdiction the same may please be deleted.
3. Without prejudice to above both the grounds of appeal and by way of an alternate submission, the appellant submits that the learned C.I.T.[A] has failed to appreciate that there was reasonable cause for the appellant in making the repayment of loan by journal entry and in the circumstances the learned C.I.T.[A] ought to have deleted the impugned penalty.
4. The appellant craves the permission to add, amend, modify, alter, revise, substitute, delete any or all grounds of appeal, if deemed necessary at the time of hearing of the appeal.”
2. The assessee for A.Y.2012-13 raised following grounds of appeal :
1. In the facts and circumstances of the case and in law, the learned C.I.T.[A] has erred in confirming the penalty of Rs.4,36,171.00 levied by the learned Assessing Officer u/s 271E of the I. T. Act 1961. The impugned penalty levied being bad in law, arbitrary, perverse and devoid of merits the same may please be deleted.
2. In the facts and circumstances of the case and in law, both the lower authorities have failed to appreciate that there was no violation of the provisions of Section 27IE of the I. T. Act 1961 and hence the impugned penalty being without jurisdiction the same may please be deleted.
3. Without prejudice to above both the grounds of appeal and by way of an alternate submission, the appellant submits that the learned C.I.T.[A] has failed to appreciate that there was reasonable cause for the appellant in making the repayment of loan by journal entry and in the circumstances the learned C.I.T.[A] ought to have deleted the impugned penalty.
4. The appellant craves the permission to add, amend, modify, alter, revise, substitute, delete any or all grounds of appeal, if deemed necessary at the time of hearing of the appeal.
3. The assessee also taken an additional ground of appeal as under:
“Gr. No. 5: The Hon’ble CIT(A) is not justified in confirming the penalty levied by the Ld. Assessing Officer under section 271E as the assessment order in which the penalty was initiated is bad in law since there was no addition on account of the reason for which notice under section 148 was issued. Thus, the assessment order becomes bad in law in the light judgment of Hon’ble Bombay High Court in the case of CIT v. Jet Airways (I) Ltd. therefore, the impugned penalty may please be deleted.”
4. Brief facts of the case: In this case, assessment under section 143(3) r.w.s 147 for A.Y.2010-11 was completed on 11.03.2016 assessing the total income at Rs.1,71,950/-. During the assessment proceedings, the Assessing Officer(AO) observed that assessee had re-paid loan in cash exceeding Rs.20,000/- aggregating to Rs.5,90,644/- during the F.Y.2009-10. The AO referred the case to the Ld.JCIT. The Ld.JCIT after giving opportunity to the assessee, passed the order under section 271E levied the penalty of Rs.5,90,644/-. As per the penalty order, following loans have been re-paid in cash.
