Ita/536/2012 Of Director Of Income Tax v. Maharaji Education Trust

.e ls $-+*xNTIIT] HIGH COURT OF DI'LHI [Ntr],W ] rTA 53612012 DIRI.JC'I'OIT OF INCOM]I'I'AX..... Appcllant'I'hrough: Mr. Abhishek Maratha, Sr. StanclingCor,rnsel. vcrsus ..... ItcspondcntI'hrough: Mr. Vivck [Singh, ][Advocatc.] MNIIAI{N.TI il)UCN'fION'IRI]S'T COIIAM:MR. ][S. ][I{AVINDITA ][I}IIA.I.]IION'I}I,}.] IION'I}I,E MIT. [JUSTICE R.V.BASWAR] ORDT]R "1, 31.10.2012 l. 'l'hc clucstiol ol' law sought to bc urgcd on bchall'of thc lLcvenuc [in this ][appcal]agairrst tlrc'l'ribunal,s [order datcd ][2l.ll.20ll ][in ][I'l'A ][4209lDcll20ll ][is ][as ][to ][the ][lcgality]and corrcctncss 6f its [order, upholding ][the ][Appcllate Commissioncr's ][ordcr ][rvhich]dircctcd tlc setting [asidc ][of ][thc penalty imposcd ttpon thc ][assessec ][rinder ][Scctiot"t271I:'in]l.cspcct ol.thc [payincnt ][madc ][to thc tunc ][ol'Rs.75 Lakhs ][in ][cash.] 2. 'l'hc bricf lacts of the casc arc that thc asscsscc - a trust - rvas laced [rvith ][adverse]orclcrs and [lrad ][to ][satisfy ][dccrec ][of ][the ][Debt f{ccovcry 'l'ritrunal ][(t)l{l). ][At ][that ][stagc, the]'l'rustcc t)r. p. Malialingarn arrangccl thc recprisite funds lrom [atrother ][conccrn i.c. Ayush]Comrnercial [privatc Lirnited ][through trvo ][chcques/clemand ][dralts ][i.c. ][of ][I{s.50 Lakhs ][and]I{s.25 Lakhs. ['l'his ]savcd [the trust's ][propcrty and ][assets ][fi'om ][cxcct'ttiott ][and ][other]DKI': [an adverse ][decrcc stood ][satisficd. ]['l'hc ][asscssec ][rcpaid]pr.cccclings clircctcd by [thc ]thc autclr.rnt tcl thc [Ayush ][Clourrnercial ][Privatc ][Limitcd lrotn ][r'vhotrl ][the ][amounts ][rvcre]o5tai1c6 by its [trLrstec ][i1 cash. 'l'hc ][Asscssing ][Officcr ][irnposcd ][ponalty, ][rcasoning ][that] .J-t t tlrc mandatory provision of Section [269'l'havc ][bcen ][violatcd ][on ][accourrt ][of ][the ][payments]made - in discharge of thc [debt ][- ][in ][casl.r ][and ][dircctcd fecovcry ][of ][pcnalty atnount ][under]Scction 2711:,.'l'hc [assessce's ][appcdl ][to ][the ][CIl'(n) ][succceded; ][thc Rcvcnuc's ][appeal ][to]thc l'l'A'l'rvas dismisscd [try ][the ][impr-rgned ][ordcr.] 3. lt is argucd o1 behalf ol'the [Revcnue that ][thc ][rccords ][cleally ][cstablish ][facially ][a]violatiorr of the [nrandatory ][provision ][of ][Scction ][269'l'. ][It ][is ][also ][r.rrged ][that there ][rvas].othing on the record [to ][suggest ][that ][in ][fact the ][payrtrent ][rcccivcd ][was ][divcrted ][for ][the]ultinrats objcctivc [i.c. ][to ][satisfy ][the ][DI{T's ][decree.] 4. Ilot6 the CI'l' (A) as well [as ][thc ]['fribunal ][have, ][aftcr ][corrsidering ][thc ][rccords,]particularly rroticcd that [thc ][paynlent had indccd been madc ][to ][the ][DI{f ][frorn ][the funds]bon-orvcd arrd [that ][tlrc trusl ][was constraincd ][to ][pay ][back ][thc ][amount ][to ][the ][ultirnate]crcditor i.c. Ayush Comrrcrcial [Privatc ][Limitcd ][in ][cash ][in ][order ][to ][avoid an ][rrgly]situation. ['l'hc'l'riburral ][fLrrt|er ][rcasoned ][rvhile ][rcjccting thc I{cvcnue's ][appeal ][as ][follorvs:] 4. Ilot6 the CI'l' (A) as well [as ][thc ]['fribunal ][have, ][aftcr ][corrsidering ][thc ][rccords,]particularly rroticcd that [thc ][paynlent had indccd been madc ][to ][the ][DI{f ][frorn ][the funds]bon-orvcd arrd [that ][tlrc trusl ][was constraincd ][to ][pay ][back ][thc ][amount ][to ][the ][ultirnate]crcditor i.c. Ayush Comrrcrcial [Privatc ][Limitcd ][in ][cash ][in ][order ][to ][avoid an ][rrgly]situation. ['l'hc'l'riburral ][fLrrt|er ][rcasoned ][rvhile ][rcjccting thc I{cvcnue's ][appeal ][as ][follorvs:] ,,6. We hcrye heard [the ][rivril ][contention,v ][in ][light ][of tlte ][materid ][produced ][attcl]precetlutt relietl 'has ttpon. [Wefintt ][that ][Ltl. ][Comntis:siortcr ][of ][hcortte ][T'ax (Appeals)]gitten a fincliig thctt prottisions of ,section 2738 cu'e crtfi'ucted. In thi's cctsaethere wus ,unrurrnblu [camse ]for [the ]failtn'e [ttt ][contply ][vith ][the ][prottisions ][in ][this]regcu.cl. In this case [ILs.75 ][Lac,y ][tpa.s ][aclt,tnrccct ][by ][Dr. ][P. fuIahulingtun ][to ][Mahcn'aji]Iiihrccuionttl T'rzN [vide ] [ancl ][checlue. ][ll'he ][abot,e mentioned ][cuttount ][wos]receive4 back in [luntp xtm ]f'om [Maharuji ][litltrccttional 'l\'ttst ][on ][28.6.2006' ][The]umormt receivecl back [tvcts ][receivecl ][in ][cash ][ctntl ][puit{ ][to Ayush Commercial ][(P)]Ltcl. fi"om thom [he ][has rcrisecl ][the ]ftmcl.s [tentltorarillt ]for [the ][puyment to ][the ][DRT']on ichalf of the [n.ust. ][The ][ptrytnent ][vas ][rrtucle ][to ][Altu,sh Commercictl ][(P) ][I'tcl-]ttrnotmlitrg to [ll"s' ][75 ][lctcs ]oi [zA'O'zOO6 ][b)' ][crccount ]lta)tee [clteclte drawn ][on ][the]Bank of tiuiusthun [Ltd. As ][Ltl. ][Commis.vioner of ][Inconrc'I'ux ][(Appeals) ][has ][rightlt]ob:sen ecl [thctt ][there ][lvos ][t'to ][elemenl ][of penulty is ][involved. ][The ][amount ][vcts ][given]by Dr. Ir. Mchctlingam fut [DD or ][cheqtrc, ][vhich ][wa.s ][rehrrned ][on ]28.6.2006ittmeclicttely by u cireqte lxrynrcnt [of ][lls.75 ][lacsvct:s made ][in ][the ][name of ][Ayush]Comntcrcicil [(f1 ][t,ta.^ ][I'hi ][cop1, ][of ][cheqzrc isstrcd ][to Alntslt ][Comnrcrcia-l ][(P) ][Ltd.]t,o,y also stilt'niittecl. [(Jnder ][ihe ][cit'atm:stances, ][r'e ][agree ][with ][the ][finding ][of ][the]Ld. Cotttnt1y5iotter of [htcome ]['I'ax ][(Altpeal,s) ][tltat ][lhe ][ctr,se ][i's ][covered ][ilS ][2738 ][of]rlte I7' Acr. Accoriingllt, [tve ][clo not ]fintl [uny ][infirmity ][in ][lhe ][orcler ][of ][the ][Ld'](lommi,s:sioner of Income ['ax (Appeals) attcl ltence, [we uphold ][the ][sume'] 7. hr the result, [the ][appeulfiletl ][by lhe Revenue,stands di'smis'sed."] 5. 'l'his Courl has considcrcd thc submissions of thc Revcnuc [arrd ][is ]ol'thc [opinion] '<'-r' - tliat thc colcLll'rcl'lt view of [the ][autlrorities ][below ][irrolr-rdirig ][the ]['l'ribrrnal ][cannot ][be]clraractcrizcd as unrcasonablc lraving [rcgard ][1o ][the ][facts and circutrrstanccs established.]6. In this viqv of thc mattcr, no substantial [qucstion ][of ][larv is ][ariscs. Thc ][appeal ][is]accord ingly disrnisscd. S. RAVINDIIA B}IAT, J lu *, [.-]R.V.I|ASWAII, J OCTOIlI,llt 3I,2012/vks/ \