TaxTMI 
TaxTMI 
2022 (8) TMI 1579
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....on 269ST." 2. In ITA No. 1569/Mum/2021, the Revenue has raised the following grounds of appeal: Grounds of appeal Tax effect relating to each Ground of appeal (see note below) 1. Whether on the facts and circumstances of the use and in law, the Ld Pr.CIT(A)-48, Mumbai had erred in deleting the addition of Rs. 38,51,83,495/- on the basis on the order of the Hon'ble ITAT dated 12.06.2019 wherein the Hon'ble ITAT had restored the registration granted u/s. 12A without appreciating the facts that AN appeal is filed to the Bombay High Court against the said order of the Hon'ble ITAT and the matter is subjudice. Rs. 38,51,83,495/- 2. Whether on the facts and circumstances of the case and in law, the Ld Pr.CIT(A)-48, Mumbai had erred in deleting the addition of Rs. 78,79,641/- on account of disallowance of legal expenses without appreciating the facts that these expenses were incurred to settle the dispute among the trustees and these expenses are not incurred for the benefit of the trust. Rs. 78,79,641/- Total tax effect (see note below) Rs. 39,30,63,136/- 3. Brief facts of the case are that the assessee-trust is engaged in providing healthcare faci....
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....269ST of the Act i.e, the assessee should have received amount of two lakh rupees or more otherwise than by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account without good and sufficient reasons. Section 269ST of the Act was introduced vide Finance Act, 2017 with effect from 1 April, 2017. Relevant extract stating the rationale behind the introduction of the said section as stated in the memorandum as released along with Finance Act is reproduced as under: "In India, the quantum of domestic black money is huge which adversely affects the revenue of the Government creating a resource crunch for its various welfare programmes. Black money is generally transacted in cash and large amount of unaccounted wealth is stored and used in form of cash. In order to achieve the mission of the Government to move towards a less cash economy to reduce generation and circulation of black money, it is proposed to insert section 269ST." Hence it is clear that the sole objective behind the introduction of the section 269ST is to curb black money large amount of unaccounted wealth is stored and used in f....
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....d with due care and attention." "The expression sufficient cause implies the presence of legal and adequate reason. The word 'sufficient' means 'adequate', 'enough', "as much as may be necessary to answer the purpose intended." Etc. The Assessee would like to reiterate that the reasons for acceptance of cash are discussed in para 3.3 and para 3.14 to 3.20 and your Honor would appreciate that the Assessee had no malafide intentions and it had immediately deposited all the cash collected into the bank account. Thus mere technical violation of provisions of section 2695T without any malafide intentions and without there being any compelling circumstances behind the conscious contravention of section 269ST, It would be "Good and Sufficient cause" so as to come out of penal action u/s/271DA. Without prejudice to the above, the Assessee submits that Section 269ST was introduced with intent to move towards a less cash economy to reduce generation and circulation of black money, The Assessee submits that it is cognizant of the Government's intent of curbing black money and the Assessee itself is a huge supporter of such a cause. The Assessee submi....
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....d for a loan shall not be aggregated for the purpose of determining applicability of the provisions of the said section. Thus, the said circular was issued by considering the practical difficulties as faced by the non- banking financial companies and housing finance. Hence it was clear that the said section was only introduced to curb flotation of black money/ promote digital economy and not for the purpose of providing unnecessary hardship or problems in the business of the taxpayers. For the aforesaid reasons, the CBDT understood the practical difficulties as faced by NBFC and HFC and grant relief to them in regard to one of the conditions as specified in section 269ST of the Act. 10. In the present case in hand, the assessee accepted such payments of Rs. 2,00,000/- or more in cash only to cater to the medical needs and/or emergencies of several patients with different disabilities and/or disorders and not for the purpose of circulating bank money being the sole objective of introduction of the aforesaid section. The assessee submits that section 269ST of the Act clearly states that no person shall receive an amount of two lakh rupees or more. The assessee submits that on peru....
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....which amounts to around Rs. 8 Cr. 12. Relying on the decision of Hon'ble Rajasthan High Court as mentioned (supra), the amount received in excess of Rs. 1,99,999/- only can be considered for the purposes of section 269ST which comes out to be Rs. 10,27,021/- only. 13. In addition to above, we have considered and relied upon the following precedents of various High Courts including the Jurisdictional High Court of Mumbai as under: "The Hon'ble Bombay High Court in the case of CTT vs Ajitnath AY 2018-19 ay HiTech Builders P Ltd has examined identical provision wherein it is held that "there is a reasonable cause for not complying with section 26955 and penalty under section 271D is not imposed in case where journal entries constitute a recognized mode of recording of transactions and in absence of any adverse finding by authorities that journal entries were made with a view to achieve purpose outside normal business operations or there was any involvement money," Further, Hon'ble Bombay High Court in the case of CIT vs Triumph International Finance Ltd held that, "penalty under section 271E could not be imposed for contravening provisions of section 26....
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....e, nor conversely of a "sufficient cause" which is not d post one and we would add that, other of these is not different from "good and sufficient cause" which is used in this context in other Statutes If, on the other hand, there is any difference between the two it can only be that the requirement of a "good cause" is complied with on a lesser degree of proof than that of "sufficient cause". Hon. Supreme Court's in the case of Hindustan Steel Ltd v State of Orissa [1972] 83 ITR 26 (SC) wherein it has been held that an order imposing penalty for failure to carry out a statutory obligation is the result of a quasi criminal proceedings, and penalty will not ordinarily be imposed unless the party obliged either acted deliberately in defiance of law or was guilty of conduct contumacious or dishonest, or acted in conscious disregard of it's obligation. The penalty will not also be imposed merely because of it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of authority to be exercised judicially and on a consideration of all relevant circumstances. Even if a minimum penalty is prescribed the ....
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....o as "the Act") for AY.2015-16 by the Ld. CIT(A)-48 Mumbai in the case of Lilavati Kirtilal Mehta Medical Trust (here in after called as the assessee). 18. Facts of the case are that the assessee trust is registered as a charitable trust u/s. 12A of the Income Tax Act, 1961, since 22 January, 1979. The assessee is engaged in according medical relief and encouraging medical science, and more particularly running a hospital in name of Lilawati Hospital at Bandra Mumbai, which constitutes a "charitable purpose" as per section 2(15) of the Income Tax Act, 1961. For AY 2015-16, the assessee had filed its original return of income on 26.09.2015 declaring total income at Rs. NIL. The case was selected under CASS for scrutiny and notice u/s.143(2) dated 26.09.2016 was issued and served on the assessee. Thereafter, a notice u/s.142(1) was issued on 02.08.2017 with detailed questionnaire and duly served on the appellant. Prior to that the then CIT(Central)-1, Mumbai had issued a show cause u/s 12AA(3) to the assessee trust, with a view to cancel the registration, as certain anomalies had been found during the course of search held on 11.04.2011, indicating that the assessee had diverted c....