TaxTMI 
TaxTMI 
2023 (2) TMI 840
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....tion No. 47/Ind/2021 are penalty-matters filed respectively by the revenue and assessee against the appeal-order dated 06.07.2020 passed by Ld. CIT(A), which in turn arise out of penalty order dated 30.09.2016 passed by learned Addl. CIT / Joint CIT, Central, Indore ["Ld. Addl. CIT"] u/s 271D of Income-tax Act, 1961. 2. Since the factual backdrop and basis for adjudication of all these matters is same, we proceed to decide by this common order for the sake of convenience. 3. Heard the learned Representatives of both sides at length and case-records perused. 4. The registry has informed that there is a fling-delay of 439 days in ITA No. 283/Ind/2021 and 94 days in ITA No. 20/Ind/2021, therefore these appeals are time-barred. The Ld. AR prayed that the delay has occurred due to Covid-19 Pandemic. The Ld. AR further placed reliance on the order of Hon'ble Supreme Court in Suo Motu Writ Petition (C) No. 3 of 2020 read with Misc. Applications, by which suo motu extension of the limitation-period for filing of appeals w.e.f. 15.03.2020 under all laws has been granted and hence there is no delay in fact. We confronted the Ld. DR who agreed to the submission of Ld. AR. In view of ....
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....erefore, it is clear that these payments have been made by M/s Prakash Asphalting & Toll Highways (India) Ltd. from its unaccounted income." 6. Finally, the Ld. AO completed re-opened assessment vide order dated 03.03.2016 after making an addition of Rs. 1,15,14,659/- by observing and holding thus: "14. Therefore, it is clear and evident that the assessee company has given the loan of Rs. 1,15,00,000/- to the company M/s AIDPL out of undisclosed income and charged total interest of Rs. 14,659/- for A.Y. 2008-09 and the same transaction has not been incorporated in the regular books of account. Hence, an addition of Rs. 1,15,00,000/- and interest charged of Rs. 14,659/- is made on account of unexplained cash credit to the total income of the assessee for A.Y. 2008-09. Penalty proceeding u/s 271(1)(c) of the Act is initiated separately on this issue. Further, the matter is being referred to Addl. Commission of Income-tax (Central), Indore for issuing notice and imposing penalty u/s 271D and 271E of the "Act". 7. Against assessment-order, the assessee filed first-appeal to Ld. CIT(A) wherein the challenge was made to the legality of re-assessment as well as the addition....
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....s.14,659/-. The total undisclosed income in these seized documents is Rs. 1,22,19,659/- which is admitted by AIDPL in AY 2008-09 and order u/s 263 has been passed accordingly. 3. Considering the above facts, the addition of Rs.1,15,14,659/- was wrongly been made in the assessment order of PATH(I)Ltd which may kindly be deleted." 4.2.1. From the report of the AO, it is clear that the additions in AY 2008-09 were wrongly made in the assessment order passed dated 03.03.2016 u/s 143(3) r.w.s. 147 which is under consideration. Therefore, addition made by the AO amounting to Rs. 1,15,14,659/- is deleted. Therefore, appeal on this ground is allowed." Penalty-matters upto first-appeal: 8. As observed earlier, while completing assessment the Ld. AO made a reference to Ld. Addl. CIT for imposing penalty u/s 271D and 271E of the act. Based on such reference made by Ld. AO, the Ld. Addl. CIT issued two separate notices, both dated 23.03.2016, one for penalty u/s 271D and other u/s 271E, which are placed in the Paper-Book at Page No. 47 and 48, scanned copies thereof being reproduced below: 9. Subsequently, the Joint Commissioner of Income-tax (Central), Indore also i....
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.... loan of Rs.1,15,00,000/. is exactly matching with the entry of cash received of dated 29 March and 31 March 2008 of table in pageD21. It is also worth mentioning that the hand written jottings on pageD23 (mentioned in bottom) share buyback 13/1/9 3,66,25,000 is also getting correlated with the entry mentioned in Page No. 21 of LPS-1 relating to entry in 15 Jan, 09. During the course of assessment proceedings, the submission of the assessee Agroh Infrastructure Developers Pvt. Ltd (AIDPL) is as follows: _ b. The first table Contains calculation of interest On Rs. 85.00 Lacs given by Agroh infrastructure Developers Private Limited to Prakash Asphaltings and Toll Highways India Limited. The Amount of Advance Rs. 85.00 Lacs is Correct and was given by the Agroh Infrastructure Developers by way cheque on 25/03/2008, however, total interest charged from PATH for the year is Rs 1159466/- which has been included in books and TDS also has been deducted on same. Copy of account of Prakash Asphalting and Toll Highways India Limited is enclosed herewith. From this Submission of the assessee, it is clear that in page no. 23 of LPS-1 the entry of Rs. 85 lakhs is a val....
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..... The relevant extract of loose papers i.e. 21-23 of LPS-1 is scanned on page no 5-7 of the penalty order. 4.1.1 The appellant during the course of appellate proceedings submitted that a loan of Rs. 85 lakhs was taken from AIDPL in FY 2007-08 (AY 2008-09) through cheque and appellant has paid total interest on the said loan at Rs. 1159466/- which is fully recorded in books of account. However, for the other amounts mentioned on the said loose papers no such loan was taken or interest was paid by the appellant. The appellant has further contended that the statement of Shri Shailendra Singhal was never confronted with the appellant. The appellant has also taken a plea that presumption applied by the AO u/s 132(4A) & 292C of the Act that the onus of explaining the contents of the seized documents is on the appellant, is baseless, because the said loose paper was found from third party premises i.e. AIDPL. 4.1.2 I have considered the facts of the case, evidences on record and findings of the AO. After considering the entire factual matrix and evidence/material on record inter alia written submissions filed, I reach to conclusion that impugned imposition of penalty was....
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....entary and oral evidence. The penalty order does not discuss any such attempt by the department to conclusively establish that the transaction whereby debtor creditor relationship has been created between the two parties. The reciprocity which is a fundamental necessity of existence of transaction was never proved or attempted by the department. 4.1.4 This is settled legal position that any 'dumb document' cannot be used as an evidence to draw an adverse inference against the assessee. Case laws supporting this proposition are as under:- XXX (not reproduced for brevity) 4.1.8 The AO during the course of appellate proceedings vide letter dated 29.05.2017 has stated that the apepllant has accepted cash of Rs. 1,22,19,659/-, therefore, penalty u/s 271D ought to have been levied at Rs. 1,22,19,659/-. However, penalty was levied at Rs. 1,15,00,000/- only. Therefore, the AO has requested to enhance the penalty by Rs. 7,05,000/-. The facts of the case has been discussed in depth in above mentioned paras, therefore, I do not find any merit in enhancing the penalty by Rs. 7,05,000/- which has been levied on the basis of impugned loose papers as discussed above. Th....
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....the order of first-appeal referred to in above paragraph No. 13, the revenue has come in ITA No. 20/Ind/2021 before us, on the following grounds: "1. On the facts and circumstances of the case, the Ld. CIT(A) erred in deleting the penalty of Rs. 1,15,00,000/- levied by JCIT u/s 271D on account of violating the provisions of section 269SS of the Act. 2. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in holding that then penalty was imposed on the basis of dumb documents despite the fact that the data on the said documents was duly corroborated as per the findings in the penalty-order." The assessee has also filed Cross-Objection No. 47/Ind/2021 on the following ground: "Ground No.1 Penalty order under section 271D of the Income Tax Act 1961(the Act) is bad in law: On the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeal)-3, Indore (hereinafter referred to as the Ld. CIT(A)) erred in not holding that penalty order dated September 30, 2016 under section 271D of the Act is bad in law. The appellant prays that the penalty order dated September 30, 2016 under secti....
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....re the Pr. CIT(Central), Bhopal in response to the notice u/s 263 of the Act for AY 2008-09. v. From the seized documents page no.21 of LPS-1, it is seen that total cash loan given by AIDPL is Rs.1,22,05,000/-. Similarly, from page no. 23 of LPS-1, it is seen that the AIDPL has received interest of Rs.14,659/-. The total undisclosed income in these seized documents is Rs. 1,22,19,659/- which is admitted by AIDPL in AY 2008-09 and order u/s 263 has been passed accordingly. 3. Considering the above facts, the addition of Rs.1,15,14,659/- was wrongly been made in the assessment order of PATH(I)Ltd which may kindly be deleted." 4.2.1. From the report of the AO, it is clear that the additions in AY 2008-09 were wrongly made in the assessment order passed dated 03.03.2016 u/s 143(3) r.w.s. 147 which is under consideration. Therefore, addition made by the AO amounting to Rs. 1,15,14,659/- is deleted. Therefore, appeal on this ground is allowed." He then carried us to the factual-report submitted by Ld. AO to Ld. Addl. CIT, as reproduced here-in-above in Paragraph No. 11, and requested us to peruse contents thereof which, according to him, is self-speaking and....
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....s a valid entry and is a loan given by AIDPL to PATH. Obliviously, if the left-hand side column on upper side of page.23 is correct and if it means that AIDPL has given loan to PATH from bank account. Then, it automatically follows that in the bottom side of pageA 23 of LPS-1 is also correct and it means that the cash loan has been given by AIDPL to PATH." 17. Referring to above, Ld. AR argued that it is quite clear that the alleged document "LPS-1, Page No. 21 to 23" was found and seized from the premise of M/s PATH Oriental Highways Public Limited, Mhow / AIDPL and not from assessee. That apart, the authorities initially framed a conclusion that the assessee had given loan to AIDPL (Hereafter referred to as "original conclusion"), but subsequently they reversed their conclusion to the effect that AIDPL has given loan to the assessee, in other words the assessee has taken loan from AIDPL (Hereafter referred to as "reversed-conclusion"). Then, Ld. AR submitted that the assessment of assessee was re-opened on the basis of "original-conclusion". Ld. AR submitted that the "original-conclusion" was absolutely incorrect, hence the action taken u/s 148 as well as order of re-assessmen....
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....ough he agrees that neither penalty u/s 271D nor u/s 271E applies to the transaction of "loan given". Our analysis: 21. After a careful consideration of the material placed before us, we find that the present-appeals have a clear-cut history. Learned Representatives of both sides agrees that on the basis of "LPS-1, Page No. 21 to 23", the authorities made an "original-conclusion" that the assessee had given loan to AIDPL, but at a later stage it was observed that AIDPL has given loan to the assessee. They further agree that the re-assessment proceedings as well penalty-proceedings u/s 271D / 271E were initiated on the basis of "original conclusion". With such undisputed fact, we are required to check the validity of assessment-order and penalty-order. 22. We observe that the "original-conclusion" was such that the assessee had given loan to AIDPL but the "reversed-conclusion" was just opposite i.e. AIDPL had given loan to assessee. Now, if we give weightage to "original- conclusion", which could not be said to faulty as per understanding gained by authorities at that time, the result would be such that the order of reassessment would be valid but the penalty-proceeding wou....
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....X ACT, 1961 The assessment proceedings u/s 143(3) for A.Y. 2008-09 has been completed on 03.03.2016 and it is revealed that a violation of provision of section 269SS of the Income Tax Act, 1961 appears in your case, which may invoke a penalty u/s 271D. You are hereby requested to appear before me 11:00 am on 06.04.2016 and show cause why an order imposing a penalty on you should not be made u/s 271D of I.T. Act, 1961. If you do not wish to avail yourself of this opportunity of being heard in person or through authorised representative, you may show cause in writing on or before the said date which will be considered before any such order is made section 271D. (Seal) Abhish (Rajib Jain) Addl. Commissioner of Income Tax (Central) Indore ANNEXURE-. 12.02 48 OFFICE OF THE ADDL. COMMISSIONER OF INCOME TAX CENTRAL), INDORE AAYAKAR BHAWAN, MAIN BUILDING, OPP OF TITE CHURCH, INDORE-452001 PAN: AABCP0398N 508 Dated: 23:03:2016 To M/s Prakash Asphalting & Toll Highways (India) Ltd. 76, MaH Road, Mhow NOTICE UNDER SECTION 274 READ WITH SECTION 271 E OF THE INCOME TAX ACT, 1961 The assessment proceedings ....
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....red the issue and observed that, "It is well settled that a penalty under this provision is independent of the assessment. The action inviting imposition of penalty is granting of loans above the prescribed limit otherwise than through banking channels and as such infringement of Section 269SS of the Act is not related to the income that may be assessed or finally adjudicated. CA Abhishe 3+8 13/14 OFFICE OF THE ANNEXURE-12.04 5 JOINT COMMISSIONER OF INCOME TAX (CENTRAL), INDORE Aayakar Bhawan, Main Building, Room No. 307, Opp. White Church, Indorc PAN: AABCP0398N 1819 To, M/s Prakash Asphalting & Toll Highways (India) Ltd. 76, Mall Road, Mhow Dated: 08.07.2016 NOTICE UNDER SECTION 274 READ WITH SECTION 271 E OF THE INCOME TAX ACT, 1961 The assessment proceedings u/s 143(3) for A.Y. 2008-09 has been completed on 03.03.2016 and it is revealed that a violation of provision of Section 269T of the Income Tax Act, 1961 appears in your case, which may invoke a penalty u/s 271 E. You are hereby requested to appear before me 11:00 am on 2607.2016 and show cause why an order imposing a penalty on you should not ....