Case Law Details
ACIT Vs Sanjeev J. Aeren (ITAT Delhi)
ITAT Delhi quashed a Rs.25 crore penalty imposed under Section 271D, ruling that mere seizure of an MOU without evidence of actual cash loan cannot establish violation of Section 269SS. The tribunal emphasized that assumptions without independent proof are insufficient for penalty.
Revenue appealed against order of CIT(A) deleting penalty of Rs.25 crores imposed u/s 271D on the ground that the Assessee had accepted cash loan in violation of s.269SS.
A search u/s 132 was conducted on 17.08.2011 in the Aeren group. During search, a photocopy of MOU dated 10.08.2011 was seized from residence of Shri Surendra Kumar Gupta & also from office of Sanjeev J. Aeren. AO concluded that Shri D.K. Gupta (brother of Assessee) advanced Rs.25 crores in cash to Sanjeev J. Aeren on 31.07.2011 against transfer of 25% undivided share in a Prithvi Raj Road property valued at Rs.18.75 crores. Relying on these findings, Addl. CIT levied penalty u/s 271D holding that Assessee violated s.269SS by accepting cash loan.
Before CIT(A), Assessee argued that there was no actual cash transaction, & penalty was merely based on assumptions drawn in assessment of Shri D.K. Gupta. CIT(A) found that there was no independent evidence of cash loan, & deleted penalty.
Tribunal noted that penalty order was entirely based on assessment in case of Shri D.K. Gupta, which itself was found unsustainable. No evidence proved actual cash movement of Rs.25 crores. When very foundation was incorrect, penalty u/s 271D could not survive. Tribunal agreed with CIT(A) that there was no violation of s.269SS & upheld deletion of penalty. Thus, Revenue’s appeal was dismissed.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal filed by the Revenue is against the order of the Ld. CIT(A)-25, New Delhi dated 31.03.2016 relating to assessment year 2012-13 on the following ground:-
“1. The Ld. CIT(A) has erred in law and on the facts in deleting the penalty u/s. 271D of the Act of Rs. 25 Crores imposed on the assessee for violation of provisions of section 269SS of the Act.
2. That the Ld. CIT(A) has erred in law and on fact in ignoring the contents of MOU which clearly mentioned payment of Rs. 25 crore in cash to the assessee.
2. Brief facts of the case are that a Search & Seizure operation u/s 132 was conducted on 17.08.11 on the Assessee, and other members of the group at various residential and business premises. Proceedings u/s. 143A were initiated against the assessee for the AY 2012-13 and the assessment order u/s. 153A/143(3) was passed by the ACIT, CC-09, New Delhi on 31.3.2014. During the course of search conducted on 17.8.2011, certain documents being pages 32 to 36, being an MOU dated 10.8.2011 were seized from the residence of Sh. Surendra Kumar Gupta, photocopy of which being pages 132 to 135 of Annexure A-1 were seized from the office of Sh. Sanjeev J. Aeren. On the basis of these documents, it was concluded by the ACIT, CC-9, New Delhi, i.e. the Assessing Officer of Sh. DK Gupta, brother of Sh. Sanjeev J. Aeren (the assessee) that a cash loan of Rs. 25 crores was given by Sh. DK Gupta to Sh. Sanjeev J. Aeren on 31.7.2011, in lieu of which 25% of the undivided share of the property bearing no. 15/1, Prithvi Raj Road, New Delhi, measuring approximately 2,200 square yards, valued at about Rs. 18.75 crores was given to Sh. DK Gupta. On the basis of such conclusion, the ACIT, CC-9, New Delhi i.e. the Assessing Officer of Sh. DK Gupta, was of the opinion that unaccounted cash of Rs. 25 crores was advanced by Shri DK Gupta to Sh. Sanjeev J. Aeren, and added this amount to the income of Sh. DK Gupta for AY 2012-13. On the basis of above conclusions in the course of assessment proceedings in the case of Sh. DK Gupta for AY 2012-13, it was concluded by the AO that Sh. Sanjeev J. Aeren had defaulted under the provision of section 269SS of the Act. The AO made a reference to Addl. CIT, Central Range-4, New Delhi and submitted that on perusal of seized material and details filed by the assessee, it was found that the assessee i.e. Sh. Sanjeev J. Aeren had received cash loan amounting to Rs. 25 crores in contravention to the provisions of section 269SS of the Act and was liable for penalty under section 271D of the Act. Assessee preferred appeal before the Ld. CIT(A), who vide his impugned order dated 31.03.2016 has allowed the appeal of the assessee. Aggrieved, with the action of the ld. CIT(A), Revenue is in appeal before us.
3. At the time of hearing, Ld. DR relied the order of the AO and filed her written submissions in support of her contention. Per contra, Ld. AR for the assessee relied upon the order of the Ld. CIT(A)and submitted that same does not need any interference on our part.
4. We have heard both the parties and perused the records alongwith the written submissions filed by the Ld. DR. We find that the penalty order u/s. 271D shows that the Additional CIT, Central Range-4, New Delhi has relied upon the Assessment order for AY 2012-13 in the case of Sh. D.K. Gupta to conclude that the assessee had taken/ accepted cash loan of Rs. 25 crores from Sh. DK Gupta which was in violation of Section 269SS and therefore, attracted penalty u/s. 271D of the I.T. Act, 1961. The facts are contained in the assessment order in the case of Sh. D.K. Gupta for AY 2012-13 and the only judicial pronouncement mentioned in the order are those mentioned by Sh. Sanjeev J. Aeren in the submission before the Additional CIT, Central Range-4, New Delhi, which are reproduced on page 3 of the penalty order. All these judicial decisions support the stand of the assessee. Other than these, no other judicial pronouncements are discussed in the entire penalty order. Once the opinion of the AO in the case of Sh. DK Gupta for AY 2012-13 has been found to be erroneous and there is nothing to show that there was any actual cash payment of Rs. 25 crores by Sh. DK Gupta to Sh. Sanjeev J. Aeren, and the penalty order u/s. 271D is based on such findings in the assessment proceedings in the case of Sh. D.K. Gupta for AY 2012-13, it is obvious that the opinion of the Additional CIT, Central Range-4, New Delhi cannot be approved. In view of above, it is abundantly clear that there was no cash payment of Rs. 25 crores by Sh. DK Gupta to Sh. Sanjeev J. Aeren, and thus, there was neither any violation of the provisions of Section 269SS, nor any penalty u/s 271D was leviable, hence, the same was rightly been deleted by the Ld. CIT(A). Keeping in view of the aforesaid background, we do not find any infirmity in the order of the Ld. CIT(A), hence, we uphold the same wherein, the Ld. CIT(A) deleted the penalty in dispute. Accordingly, the ground raised by the Revenue stand rejected.
5. In the result, the Revenue’s appeal stands dismissed in the aforesaid manner.
Order pronounced in the Open Court on 24-09-2025.
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