Sandeep Kaur Gill Vs JCIT (ITAT Raipur)
ITAT Raipur held that assessee failed to put forth the reasonable cause because of which provisions of section 269T of the Income Tax Act was not complied. Accordingly, penalty under section 271E of the Income Tax Act leviable.
Facts- The assessee had made cash repayment of loans that were raised by her from M/s. Tata Motors and M/s. Tata Finance Ltd for financing purchase of buses. On the basis of the information shared by the AO with the JCIT, Range-3, Raipur, the latter called upon the assessee to show cause as to why penalty may not be imposed upon her u/s. 271E of the Act for having repaid the loans in question otherwise than as per the modes prescribed in section 269T of the Act.
JCIT held that the assessee had without any reasonable cause repaid the loans in contravention of the provisions section 269T of the Act, therein saddled her with a penalty of Rs.6,71,939/- u/s. 271E of the Act.
On appeal, the CIT(A) finding no substance in the contentions of the assessee dismissed the appeal.
The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us.
Conclusion- Held that as the assessee had not only failed to comply with the provisions of section 269T of the Act, therein rendering 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 to make repayment of the monthly installments of her outstanding loans in a manner other than that prescribed under law, therefore, finding no infirmity in the penalty of Rs. 6,71,939/- imposed by the JCIT u/s. 271E of the Act, uphold the same.
FULL TEXT OF THE ORDER OF ITAT RAIPUR
The present appeal filed by the assessee is directed against the order passed by the Commissioner of Income-Tax (Appeals), National Faceless Appeal Center (NFAC), Delhi, dated 24.12.202 1, which in turn arises from the order passed by the JCIT, Range-3, Raipur under Sec.27 1E of the Income-tax Act, 1961 (in short ‘the Act’) dated 28.12.20 18 for assessment year 2015-16. The assessee has assailed the impugned order on the following grounds of appeal before us:
“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.671939/- 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.
2. The assessee reserves the right to add, amend or alter any grounds of appeal at any time of hearing.
2. Controversy involved in the present appeal lies in a narrow compass e., sustainability of the penalty imposed by the JCIT u/s. 271E of the Act.
3. Succinctly stated, the AO while framing the assessment in the case of the assessee for A.Y 2015-16 observed, that the assessee had made cash repayment of loans that were raised by her from M/s. Tata Motors and M/s. Tata Finance Ltd for financing purchase of buses. On the basis of the information shared by the AO with the JCIT, Range-3, Raipur, the latter called upon the assessee to show cause as to why penalty may not be imposed upon her u/s. 271E of the Act for having repaid the loans in question otherwise than as per the modes prescribed in section 269T of the Act. In reply, it was the claim of the assessee that the monthly installments towards repayment of the aforementioned loans were made in cash because the concerned financers had insisted her to do so. In order to fortify her aforesaid contention the assessee placed on record a letter dated 05.11.2012 from M/s. Tata Motors Pvt. Ltd., which revealed that she was called upon by the financiers concerned to make repayment of the loans in cash. In the backdrop of the aforesaid facts, it was submitted by the assessee that as she was prevented by a reasonable cause for not making the repayment of the monthly installments of the loans in question through cheque, coupled with the fact that she was ignorant of the provisions of section 269T of the Act, therefore, as per the mandate of section 273B of the Act no penalty in all fairness was liable to be imposed upon her u/s. 271E.
4. The JCIT after deliberating on the explanation of the assessee was however 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 past experience with the assessee were not ready to receive the payments from the assessee by cheques, then she could have made the said payments as per the other prescribed modes, i.e by demand drafts or electronic transfers as provided in section 269T of the Act. In so far the claim of the assessee that she was unaware about the mandate of law, it was observed by the JCIT that the said hollow claim of the assessee could not be accepted. It was observed by the JCIT that as the assessee at the relevant point of time was assisted by a Chartered Accountant who had duly audited her books of accounts, therefore, her aforesaid claim did not merit acceptance. Accordingly, the JCIT on the basis of his aforesaid deliberations, being of the view that the assessee had without any reasonable cause repaid the loans in contravention of the provisions section 269T of the Act, therein saddled her with a penalty of Rs.6,71,939/- u/s. 271E of the Act.
5. On appeal, the CIT(A) finding no substance in the contentions of the assessee dismissed the appeal.
6. The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us.
7.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.
8. Admittedly, it is a matter of fact borne from record that the assessee during the year under consideration had repaid loans aggregating to Rs.6,71,939/- in cash, as under:-
