H.K. Infraventure Pvt. Ltd. Vs JCIT (ITAT Allahabad)
there was no valid and reasonable cause for assesse to have received loan or deposit of Rs. 1,10,02,000/- in cash from its Director namely Mr. Hemant Kumar Sindhi, more so Allahabad(Now Prayagraj), U.P. is having all the requisite banking facilities available, and there was no reason and justification for the assesse to have taken loan or deposit of Rs. 1,10,02,000/- in cash from Mr. Hemant Kumar Sindhi and no such urgency was there to receive such a huge amount in cash.
In the instant case no reasonable cause or urgency is shown by the assesse for having accepted cash aggregating to Rs. 1,10,02,000/- on different occasions from Mr. Hemant Kumar Sindhi.
It could not be shown as to why the transactions could not be undertaken in compliance with the prescribed modes u/s 269SS.
Further, the Private Limited company and Director are altogether different person under the provisions of Section 2(31), and there could not be two view on this.
in the instant case AO has recorded satisfaction before invoking provisions of Section 271D for contravention of Section 269SS.
Thus, keeping in view our aforesaid discussions as above, we uphold the penalty of Rs. 1,10,02,000/- levied by ld. JCIT and as upheld by ld.CIT(A). The appeal filed by the assesse stand dismissed. We order accordingly.
FULL TEXT OF THE ORDER OF ITAT ALLAHABAD
This appeal, filed by assessee, being ITA No.46/Alld./2019, is directed against an appellate order dated 19.03.2019 in Appeal No.55/ACIT/CC/Alld. /CIT(A)-III/Lko./17-18 passed by learned Commissioner of Income Tax (Appeals)-III, Lucknow (hereinafter called “theCIT(A)”),for assessment year(ay):2012-13, the appellate proceedings had arisen before learned CIT(A)from Penalty order dated 12th December, 2017 passed by learned Joint Commissioner of Income-tax, Varanasi (hereinafter called “the JCIt”) under Section 271D of the Income-tax Act,1961(hereinafter called “the Act”) .We have heard both the parties through physical hearing mode in Open Court proceedings.
2. The grounds of appeal raised by assessee in ITA No. 46/Alld./2019 for assessment year 2012-13, in memo of appeal filed with Income-Tax Appellate Tribunal, Allahabad Bench, Allahabad(hereinafter called “the tribunal”), reads as under:-
“1- That in any view of the matter penalty order dated 12-12-2017 passed u/s 271D of the IT Act by JCIT,CC, Varanasi by imposing a penalty of Rs. 1,10,02,000/- is bad both on the fact and in law as well as without justification.
2- That in any view of the matter the Ld. CIT (A) is highly unjustified and incorrect in confirming the penalty by ignoring the correct facts and her observations in the order dated 19-03-2019 are totally incorrect and contrary to the actual facts as the CIT (A) failed to consider correct facts, cited case law and affidavit, hence the penalty so levied and maintained arbitrarily is liable to be delete in the facts and circumstances of the case.
3- That in any view of the matter since the entire transaction between the company and its director was held genuine in respect of Rs. 60 Lakh as deleted by the CIT (A) in the light of facts and evidence. Therefore the penalty so imposed on that count is unjustified and wrong, hence the same is liable to be deleted.
4- That in any view of the matter the allegation of the Assessing officer that there was contravention of section 269SS of the IT Act is totally wrong and misleading specially when the transaction routed through banking channel and the payment for purchase of stamps was made to the state Government. Therefore the imposition of penalty is unwarranted in the fact and circumstances of the case.
5- That in any view of the matter the transaction between the company and director does not fall under the category of loan or deposit and also there was no element of interest, hence the imposition of the penalty is unjustified and wrong, therefore the same is liable to be deleted in the facts and circumstances of the case.
6- That any view of the matter since the transaction between the company & director has taken place on extreme urgency which was beyond control of the appellant company and these facts were brought to the knowledge of the lower authorities alongwith supportive affidavit also but the lower authorities ignored the same and made & maintained the penalty arbitrarily which is highly unjustified and illegal, therefore the so imposed & maintained penalty is liable to be deleted.
7- That in any view of the matter in compliance to the show cause notice explanation was offered requesting thereby to provide 10 days time to furnished further explanation but the lower authority failed in it and moreso the transaction is recorded in books and in whole of the transaction there was no rotation or movement of any unaccounted money in any manner, hence on that count the penalty so made & maintained is wrong, therefore the same is liable to be deleted in the facts and circumstances of the case.
8- That in any view of the matter imposition & maintenance of the such penalty is totally incorrect and injustice in the facts & circumstances of the case and the appellant reserves his right to take any further ground before hearing of the appeal.”
3. The brief facts of the case are that during the course of assessment proceedings conducted by the AO under Section 143(3) read with Section 143(2) of the 1961 Act for the impugned assessment year in the case of the assessee, it was observed by the AO that the assessee had accepted cash loan of Rs. 1,10,00,000/- from Shri Hemant Kumar Sindhi, Allahabad on various dates, in contravention of provisions of Section 269SS of the 1961 Act, and for such default the assessee is liable to be penalized under Section 271D of the Act. The details of such cash loans taken by the assessee, are as under:
