Uday S. Jagtap v. Joint Commissioner Of Income Tax Central Range, Nashik

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 145 OF 2016WITHINCOME TAX APPEAL NO. 154 OF 2016WITHINCOME TAX APPEAL NO. 171 OF 2016 Shivaji Ramchandra Pawar (HUF) v/s. The Joint Commissioner of Income Tax,Range 3, Nashik .. Appellant ..Respondent Mr. Prayag Jha a/w Mr. Prateek Jha for the appellantMr. Sham Walve for the respondent CORAM : M.S. SANKLECHA & SANDEEP K. SHINDE, J.J. P.C. DATED : 18[th] JULY, 2018. 1.These three appeals under Section 260A of the Income Tax Act, 1961 (the Act) challenge the common order dated 18[th] March 2015 of the Income Tax Appellate Tribunal (the Tribunal). The commonimpugned order relates to Assessment Years 2003-04, 2004-05 and2005-06. Thus, the three appeals. 2.Mr. Jha, learned Counsel appearing in support of the threeappeals urges the following re-framed questions of law for ourconsideration :- 1 of 7 (i)Whether on the facts and in the circumstances of the caseand in law, the Tribunal was right in upholding penalty imposedunder Section 271D without appreciating that the transactionswere genuine, bona fide and carried out without having anyintention to evade tax and the infraction of provisions of Section269SS was not with knowledge or in defiance of this section withcontumacious or dishonest intent? (ii)Whether on the facts and in the circumstances of the caseand in law, the Tribunal was correct in coming to the conclusionthat there was an absence of reasonable cause within the meaningof section 273B? 3.During the course of search and seizure action, it was found thatthe appellant has received loans in cash in breach of Section 269SS ofthe Act which invites penalty under Section 271D of the Act. Thus, atthe time of passing of the assessment order, the penalty proceedingswere initiated for the previous years relevant to the three assessmentyears. Thereafter, the Assessing Officer issued a show-cause notice tothe appellant to show-cause as to why penalty should not be imposedunder Section 271D of the Act. The appellant has filed his explanationto the show-cause notice. However, the Assessing Officer was notsatisfied with the explanation and, therefore, imposed penalty underSection 271D of the Act in respect of the breach of Section 269SS of the Act for the subject three assessment years. 4.Being aggrieved, the appellant carried the issue in appeal to theCommissioner of Income Tax (Appeals) [CIT(A)] from the three penaltyorders all dated 11th July 2008 for Assessment Years 2003-04, 2004-05and 2005-06 under Section 271D of the Act. By the three separateorders all dated 14[th] January 2011, the CIT(A) dismissed the appeals. 5.On further appeal, the Tribunal by the impugned order dated 18[th]March 2015 partly allowed the appeal of the appellant from the ordersdated 14[th] January, 2011. This by deleting the penalties imposed inrespect of the amounts of loan of Rs.20,000/- or less received in cash.It further restored the issue to the Assessing Officer to verify whetherlenders Ananat P. More, Anjanabai Chaudhari and Baijabai P. Deorewere agriculturists and whether or not banking facilities existed in theirvillages for the purposes of considering reasonable cause for acceptingloans in cash. Besides, penalty imposed in respect of Rs.1.75 lakhsobtained from Mr. R.B. Suryawanshi in cash was also restored to theAssessing Officer to re-examine the issue as the contention of theassessee was that the loan amount was only Rs.1 lakh and, therefore,the penalty could not be in excess thereof. Thus, wherever the reasonable cause was shown, the impugned order of the Tribunal hasdeleted the penalty or where reasonable cause was likely the issue wasrestored to the Assessing Officer for fresh consideration. In cases whereno reasonable cause was shown by the assessee, the impugned orderupheld the order of the Tribunal to the extent of cash loans werereceived in excess of Rs.20,000/-. reasonable cause was shown, the impugned order of the Tribunal hasdeleted the penalty or where reasonable cause was likely the issue wasrestored to the Assessing Officer for fresh consideration. In cases whereno reasonable cause was shown by the assessee, the impugned orderupheld the order of the Tribunal to the extent of cash loans werereceived in excess of Rs.20,000/-. 6.Mr. Jha, learned Counsel appearing in support of the appealsubmits that the impugned order of the Tribunal is not sustainablebecause on the same set of facts, it has deleted penalty in respect of thesome parties while upheld penalty in respect of the other parties.Besides, reliance is placed upon the decision of the Supreme Court inAsst. Director of Inspection Vs. Kum. A.B. Shanthi, 122 Taxman 574,the decision of this Court in Commissioner of Income Tax Vs. TriumphInternational Finance (I) Ltd., 22 taxmann.com 138 and the MadrasHigh Court in Commissioner of Income Tax Vs. Kundrathur Finance& Chit Co. 283 ITR 329. All this in support of his submission thatthere is discretion in the Authority to not impose penalty and thatreasonable cause is different from sufficient cause. Therefore, widermeaning should be given to the expression 'reasonable cause' then thatgiven to the words 'sufficient cause'. It is further submitted that the impugned order of the Tribunal has not appropriately dealt with thegrounds in the appeal memo which were raised in their memo ofappeals. Therefore, the impugned order is not sustainable. 7.We find that the impugned order of the Tribunal is a detailedspeaking order. Wherever the party has made submissions and madeout a reasonable cause, the Tribunal has exercised its discretion insetting aside the imposition of penalty or restoring it to the AssessingOfficer for fresh consideration in the light of the facts pointed out by theappellant during the course of the hearing. Wherever no reasonablecause was pointed out, the impugned order of the Tribunal did notdisturb the findings arrived at by the Assessing Officer and the CIT(A).Thus, this is not a case of non exercise of discretion under Section 273Bof the Act as alleged by the appellant. From the reading of theimpugned order of the Tribunal, we find that in respect of the loans onwhich penalty has been confirmed, the appellant assessee has not madeout and / or submitted any reasonable cause for the Tribunal to exerciseits discretion to set aside the penalty in such cases. The case laws ofthe Apex Court and co-ordinate bench of this Court relied upon by Mr.Jha on behalf of the appellant, is binding upon us and there can be noquarrel with the proposition set out therein. However, the same cannot be considered in vacuum. It necessarily has to be in the context of thefacts arising in the case. In this case, we find that the appellantassessee has not made out any case for reasonable cause in respect ofcases where the impugned order has not disturbed the finding of thelower authorities. 8.So far as the grievance that the grounds mentioned in the memoof appeal have not been appropriately considered, we find that theappellants were represented by an advocate before the Tribunal. Thus,it was for him to make appropriate submissions in support of his case. Ifno submissions in support of the grounds are made, when a party isrepresented by an Advocate, it is not for the Tribunal to go beyond thesubmissions made and investigate into facts suo moto. The impugnedorder of the Tribunal has dealt with the submissions made before it andtaken possible view in the facts of the present case. 9.Thus, the view taken by the impugned order of the Tribunal onfacts is a reasonable view and cannot be said to be perverse so as towarrant interference of this Court.facts is a reasonable view and cannot be said to be perverse so as towarrant interference of this Court. 10.In the above facts, both the identical questions proposed in all the appeals do not give rise to any substantial questions of law. Thus, notentertained. 9.Thus, the view taken by the impugned order of the Tribunal onfacts is a reasonable view and cannot be said to be perverse so as towarrant interference of this Court.facts is a reasonable view and cannot be said to be perverse so as towarrant interference of this Court. 10.In the above facts, both the identical questions proposed in all the appeals do not give rise to any substantial questions of law. Thus, notentertained. 11.Accordingly, all three appeals are dismissed. No order as tocosts. (SANDEEP K. SHINDE J.) (M.S. SANKLECHA, J.)