TaxTMI 
TaxTMI 
2005 (10) TMI 209
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....ersons. He recorded the statement of Shri Harbans Lal, wherein he stated that he had advanced loans of Rs. 80,000 repayable in instalments of Rs. 100 per day. He further stated that he advanced fresh loan after the first loan was returned by the borrower. Since Shri Harbans Lal was not able to explain the source of various loans advanced to parties, he disclosed income under VDIS to cover these loans. The assessment was accordingly completed in the case of Shri Harbans Lal. Thereafter, it appears that the Assessing Officer obtained copies of the accounts of various persons to whom he had given loans. The Assessing Officer observed that the assessee had advanced loans in cash to various persons including these two persons in violation of the provisions of section 269SS. He, therefore, referred the case to JCIT, Bhatinda, for consideration of levy of penalty under section 271D of the Income-tax Act. Accordingly, the JCIT issued show-cause notices to the aforesaid persons. Since he was not satisfied with the explanation of the aforesaid persons, he imposed penalties of the following amounts for the below mentioned assessment years: ---------------------------------------------- Name A....
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....ading Co. [1994] 48 ITD 210 (SMC)/48 ITD 211 and some other cases. The learned CIT(A) considered these submissions. He observed that the Assessing Officer has imposed penalty in all these cases by relying copies of accounts of these parties obtained from M/s. Juneja Traders and the factual position stated therein did not tally with the statement given by Sh. Harbans Lal. In his statement, Shri Harbans Lal had stated that fresh loans were given only after the earlier loans were returned by the borrowers. This position was found contrary in the copies of accounts obtained from the parties. He also observed that the Assessing Officer has not adduced any clinching evidence to establish that the affected parties had received loans from Shri Harbans Lal to the extent referred to in the penalty orders. Statements of some of the persons on whom penalty has been imposed were also recorded. They also stated that they had taken loans 2 or 3 times from Shri Harbans Lal during their whole life span. The ld. CIT(A) further observed that the department was not in a position to produce any original records, on the basis of which impugned penalties were levied. Taking into account these facts, the ....
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.....) Ltd. v. Dy. CIT 15-IT Rep. 159 (TM), where it was held that the justice should be done even if the heaven falls. (A copy of the judgment was placed before us). (d) The decision of the ITAT (Delhi Bench) in the case of Sat is h Gupta v. ITO [2005] 145 Taxman 37 (Delhi) (SMC) (Mag.), assessment year 1995-96, where by relying on the judgment of the Hon'ble Supreme Court in the case of Kishanchand Chela Ram v. CIT [1980] 125 ITR 713, the Tribunal has held that if any evidence is used against the assessee and the same was not shown to him and an opportunity to controvert the same was not given, such evidence was not admissible in support of the addition. He further relied on the two judgments of Hon'ble Punjab & Haryana High Court in the cases of CIT v. Sham Lal [1981] 127 ITR 816 and State Bank of Patiala v. Union of India [1973] 91 ITR 630. He further submitted that in his statement recorded by the Assessing Officer and referred to by the learned CIT(A) in the impugned orders, Sh. Harbans Lal had stated that fresh loans were given after the earlier loans were returned. However, he drew our attention to page 5 of the paper book which is copy of the account of Sh. Navin Gamber appe....
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....of a third party without confronting the same to the affected parties and without allowing an opportunity to cross examine Shri Harbans Lal violated the principles of natural justice. It is a trite law that evidence obtained from the third party cannot be used against the assessee until the same has been confronted to the assessee and an opportunity to cross examine the witness has been allowed. The various decisions of the ITAT relied upon by the ld. Counsel, the judgment of the Hon'ble Supreme Court in the case of Kishanchand Chela Ram and two judgments of the jurisdictional High Court in the case of Sham Lal and State Bank of Patiala also support this view. Therefore, we are of the view that such evidence could not be the basis of levy of penalty in the present cases. 7.1 Now coming to the merits of the cases, we find that during the course of appeal proceedings, photocopies of the accounts of these persons appearing in the books of account of M/s. Juneja Traders were given to these persons. As pointed out by the ld. Counsel and duly accepted by the ld. CIT(A), copies of accounts of these persons did not record some of the receipts duly acknowledged and signed by Shri Harbans L....
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.... provisions of section 269SS. No such finding has been recorded by the learned CIT(A) after accepting the position that the department has not been able to place any evidence in support of levy of penalty in each case. It must be noted that provisions of sections 271D and 271E are the harshest of all other penalty provisions of the Income-tax Act, as in this case penalty is not leviable with reference to income or tax payable thereon, but the amount of penalty is equal to the amount of loan given or taken irrespective of the fact whether the person accepting such loan/advancing loan has taxable income or not? Therefore, it is imperative on the part of the revenue authorities to exercise due care and examine the case from various angles before levying penalty under these sections. This approach has not been adopted in the present cases. 7.3 The provisions of sections 269SS and 269T have been introduced in the Act with a view to curb tax evasion. In the present cases, the undisputed facts of the cases are that these were small persons having no major source of income. Facts placed on record show that Shri Navin Kumar was working as salesman in a cloth shop, Sh. Ajay Kumar was an emp....
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....eeding, 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 a conscious disregard of its obligation. Penalty will not also be imposed merely because it is lawful to do so. Whether penalty should be imposed for failure to perform a statutory obligation is a matter of discretion of the authority to be exercised judicially and on a consideration of all the relevant circumstances. Even if a minimum penalty is prescribed the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act or where the breach flows from a bona fide belief that the offender is not liable to act in a manner prescribed by the statute." In the present cases, the authorities below have failed to establish that these persons acted in conscious disregard of the statutory obligation and they were guilty of contumacious or dishonest conduct. In the light of these facts and circumstances of the cases and the legal position discussed above, we are of the considered opinion that the learned CIT(A....
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....hatija v. Collector, Thane, Maharashtra [l990] 183 ITR 130 and Union of India v. Paras Laminates (P.) Ltd. [1990] 186 ITR 722, directed that coordinate Bench should follow order of the Bench on identical question and warned in clear terms that non-compliance of such direction, a very strict view of the matter would be taken. The last para of Hon'ble President's letter reads as under: "It is thus settled law that a coordinating Bench should follow the decision of same Bench on an identical question. If they are to differ, the procedure as laid down by the Hon'ble Supreme Court should be followed. I, therefore, once again request you to adhere to principle laid down by the Hon'ble Supreme Court. There is no justification to disregard above principle. In future if I note that attempt is being made not to follow the law as laid down by the Hon'ble Supreme Court, a very strict view of the matter would be taken and such cases would be dealt with in accordance with law." 2. Despite that learned A.M. did not agree to change his stand and returned the files to me on last Friday of my working at Amritsar. So under these circumstances I am writing my order. 3. In ITA Nos. 357(ASR.)/2000 an....
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....s wife; that these loans have been repaid by him after sale of clothes, sale of ancestral house and raising loan from the bank; that the loan has bean accepted by him after banking hours. In the last para, the assessee has sought some time to collect the evidence regarding reasonable cause of contravening the provisions of section 269SS of the Act. 5. The Assessing Officer considered the submissions of the assessee but did not find any force in it because proof of illness of assessee's wife pertained to the period April, 1994 whereas the assessee has raised/accepted loans w.e.f. February 1995 to March, 1996 i.e. during the period relevant to the assessment years 1995-96 and 1996-97. Similarly, the copy of account of the assessee as appearing in the books of M/s. Juneja Traders, Fazilka obtained by the Assessing Officer, Ward-2, Abohar during the course of assessment proceedings in the case of M/s. Juneja Traders, Fazilka, showed that the assessee is making the repayment of the loans regularly. Further, the proof attached by the assessee i.e. PNB, Fazilka's letter dated 25-10-1999 shows that the assessee has raised loan from the bank to run the business of tailoring and stitching o....
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....e tax assessee and he was also not aware of the technical provisions of law. Moreover, he was acting under the bonafide belief that no offence was being committed. The contention is further justified if facts of the case are examined in context of normal human behaviour as also in the context of normal knowledge of law. It is a trite law that levy of penalty is not automatic in view of the Supreme Court decision in Motilal Padampat Sugar Mills Co. Ltd. v. State of Uttar Pradesh [1979] 118 ITR 326 to the effect that there is no presumption that every person knows the law but that this is not a correct statement, there is no such maxim known to the law. He has also relied in support of his submissions on Supreme Court decision in Hindustan Steel Ltd. v. State of Orissa [1992] 83 ITR 26. Further reliance was placed on the decisions of the I.T.A.T., Amritsar Bench in the cases of M/s. Harpal Singh Jaswant Singh, Malout; M/s. Rattan Singh Mann Singh, Malout and M/s. Jagir Singh Balraj Kumar, Malout to plead that the I.T.A.T. has held that bona fide belief will constitute a reasonable cause for not invoking the provisions of sections 271D and 271E of the Income-tax Act. He has also relie....
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....in view the contentions of Shri Harbans Lal Juneja, Prop. M/s. Juneja Traders, Fazilka before the Assessing Officer that he advanced fresh loans on the repayment of earlier loan. The logical conclusion will be that the entries on these books were not conclusive to impose penalty under section 271D on the assessee. Reliance for the contention is placed on the following judgments: State Bank of India v. CIT [1986] 157 ITR 67 (SC) Chiranjit Lal Steel Rolling Mills v. CIT [1972] 84 ITR 222 (Punj. & Har.) P.S. Abdul Majeed v. Agrl. Income-tax and Sales Tax Officer [1994] 209 ITR 821 (Ker.). 10. It was further pleaded that the department has not allowed the assessee to cross examine Shri Harbans Lal. In view of the above facts, the learned Counsel pleaded that the penalties imposed may kindly be deleted. 11. The Assessing Officer on the other hand, observed that the assessee indulged in the contravention of the provision of section 269SS and rendered himself liable to the penalty under section 271D of the Income-tax Act, 1961 and accordingly he imposed penalties of Rs. 80,000 for the assessment year 1995-96 and Rs. 1,00,150 for the assessment year 1996-97 and the said section of the....
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....d Counsel for the assessee pleaded the Assessing Officer has imposed penalty in all these cases by relying upon copies of accounts of these parties obtained from M/s.Juneja Traders and the factual position stated therein did not tally with the statement given by Shri Harbans Lal. In his statement, Shri Harbans Lal has stated that fresh loans were given only after the earlier loans were returned by the borrowers. This position was found contrary in the copies of accounts obtained by the parties. It was further contended that the Assessing Officer has not established that parties had received loans from Shri Harbans Lal to the extent referred to in the penalties orders. Statements of some of the persons on whom penalty has been imposed were also recorded. It was also stated that they have taken loans 2 or 3 times from Shri Harbans Lal during their whole life span. The learned CIT(A) further observed that the department was not in a position to produce any original records, on the basis of which impugned penalties were levied. Taking into account these facts, the learned CIT(A) observed that it would be reasonable to assume that all these persons must have taken loans of Rs. 30,000 i.....
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....t would transpire that except one or two entries, all other entries do tally with the copy of accounts and even balance at, pages 6 and 7 tallied with the balance shown in these receipts with respect to tour of the entries and the assessee has not produced all the receipts nor a chance to verify such receipts has been given to Jt. CIT by learned CIT(A) who without following due procedure as laid down under Rule 46A has admitted additional evidence and considered the same also. So on the basis of such receipts, no further relief is allowable and in view of these facts, relief as claimed by the assessee cannot be allowed and order of learned CIT(A) should be upheld. 15. Both the sides have been heard and material on record has been perused in the light of case law cited by rival sides. Before adverting to the facts of the present case, it would be appropriate to reproduce relevant portion of section 269SS which reads as under: "269SS. No person shall, after the 30th day of June, 1984, take or accept from any other person (hereafter in this section referred to as the depositor), any loan or deposit otherwise than by an account-payee cheque or account-payee bank draft if,- (a) the a....
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....tion 273B providing that if there was a genuine and bona fide transaction and the taxpayer could not get a loan or deposit by account-payee cheque or demand draft for some bona fide reason, the authority vested with the power to impose penalty has a discretionary power not to levy the penalty. It is settled law that the heads of legislation given in the lists in the Seventh Schedule to the Constitution should not be construed in a narrow or pedantic way. If any Legislature makes an ancillary or subsidiary provision which incidentally transgresses its jurisdiction for achieving the object of such legislation, it would be a valid piece of legislation. The entries, in a legislative list should be given their fullest meaning and widest amplitude and be held to extend to all ancillary and subsidiary matters which can fairly and reasonably be said to be comprehended in them. It is only when a Legislature which has no power to legislate, or the legislation is camouflaged in such a way as to appear to be within its competence when it knows that it is not, that it can be said that the legislation so enacted is a colourable legislation and that there is no legislative competence. If any leg....
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.... could have complied with the requirements of section 269SS of the Act, without much difficulty. It is the duty of every citizen to respect law. Majesty of law is to be maintained. 15. Taking into consideration the entire conspectus of the case, I am of the opinion that there existed no reasonable cause for accepting the loan of Rs. 1,00,000 i.e. Rs. 50,000 each from Smt. Chandralekha R Khivasara and Smt. Zankarbai Khivasara. Penalty can therefore be maintained protanto. I, therefore, agree partly with the learned JM and partly with the learned AM." 18. In the context of penalty provision, the Full Bench of Hon'ble Patna High Court in the case of CWT v. Jagdish Prasad Choudhary [1995] 211 ITR 472 has held that for existence of reasonable cause the assessee is entitled to offer a factual explanation. It is incumbent upon the Assessing Officer to be satisfied about the existence or the absence of the reasonable cause in the context of the explanation offered. The Assessing Officer, in arriving at his satisfaction in such a situation, acts in a quasi-judicial capacity. The proceeding for imposition of penalty is a quasi-criminal proceeding. The satisfaction has to be reached by the ....
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....consideration in the case titled CIT v. Sunil Kumar Goel [2005] 274 ITR 53 (Punj. & Har.) in which CIT has prayed for determination of the following question of law in appeal under section 260A before Hon'ble Punjab & Haryana High Court: "Whether, on the facts and in the circumstances of the case, the Hon'ble Income Tax Appellate Tribunal was justified in deleting the penalties imposed under sections 271D and 271E of the Income-tax Act, 1961, amounting to Rs. 1,45,000 and Rs. 95,000 respectively, by holding that the assessee has made transactions of cash bona fide and under ignorance of the provisions of the Income Tax law, ignoring the fact that ignorantia legis non-excusat (ignorance of law is no excuse)?" 21. After noting the facts of the case, in the said judgment, the conclusion as arrived at by Income Tax Appellate Tribunal was reproduced as under: "We have considered the facts and circumstances of the case presented before us. We have also perused the decision of the Tribunal rendered in the case of Vit Sales Corporation. The decision is direct on the point. No contrary decision was brought before us. In the instant case, a transaction was between the sister concerns. It ....
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....ea of the assessee that he did not know the law nor deletion of the penalty on this ground by learned A.M., can be accepted/agreed to by me. As such plea in this regard is rejected. 25. Further, the assessee, in this case, has taken the stand before the Assessing Officer that in connection with illness of his wife he borrowed these funds after banking hours and sought time to substantiate the plea raised which plea of the assessee was not appropriately addressed by Jt. CIT who rejected the same but before ld. CIT(A), the assessee comes out with a totally different plea and also filed fresh evidence in the shape of photocopies of the receipts stated to have been issued by Shri Harbans Lal without formally applying for admission of such evidence and ld. CIT(A) without adhering to the provisions of Rule 46A of IT Rules, not only admitted such evidence but even considered the same before arriving at the conclusion drawn by him. There is no mention about statement of Shri Harbans Lal having been recorded or forming part of penalty proceeding but learned CIT(A) is found to have not only mentioned about such statement, he has also considered the same for arriving at the conclusion drawn.....
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....epted after banking hours to bear the medical expenses on illness of his wife but he rejected assessee's request for adjournment and proceeded to draw the inference that illness of assessee's wife to the period April 1994 whereas the assessee has accepted loans with effect from February 1995 to March 1996 and the assessee was making repayments of loans regularly. The assessee came up with detailed explanation before first appellate authority, which he accepted partly on the basis of relevant and irrelevant considerations. The course of action adopted by learned CIT(A) is not in accordance with the settled position because before admitting any material in the proceeding learned CIT(A) should have confronted such material to the Assessing Officer and should have sought his objection which he failed to do so. It is also settled law that necessary opportunity is required to be given by the officer imposing the penalty and if such opportunity is lacking, the proper course is that the matter should be remanded back to the file of the officer for giving adequate opportunity. Hon'ble Supreme Court in the case of Tin Box Co. v. CIT [2001] 249 ITR 216 has opined as under: "Held, reversing t....
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....r law after allowing a reasonable opportunity of being heard to the assessee. I hold and direct accordingly. 28. As a result, the appeals for both the years are allowed for statistical purposes. 29. As regards appeals in the case of Ashu Bagla [IT Appeal Nos. 377 and 378 (Jab.) of 2000] for the assessment years 1995-96 and 1996-97 are concerned, the facts indicate that the assessee is doing business of readymade garments at Fazilka and has never filed income-tax return. The Assessing Officer while making the assessment of M/s. Juneja Traders, Fazilka found that this concern has advanced loans to various persons against interest. During the course of assessment proceedings Shri Harbans Lal Juneja, Prop, of the firm is found to have advanced cash loans to various persons aggregating to Rs. 20,000 and above in cash i.e. otherwise than crossed cheque or bank draft as required under section 269SS. The Assessing Officer referred the matter to Jt. CIT who issued notice to the assessee with respect to acceptance of cash loan of Rs. 30,000 and Rs. 45,000 on two and four occasions for the assessment years 1995-96 and 1996-97 respectively. The first notice remained uncomplied with and in re....
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....ed in that case. I hold and direct accordingly. 33. As a result, all the appeals are treated to have been accepted for statistical purposes. REFERENCE UNDER SECTION 255(4) OF THE INCOME TAX ACT There being difference of opinion amongst the Members constituting the Bench in above noted appeals, following point of difference is formulated and referred to learned President for nominating Third Member under section 255(4) of the Income-tax Ad: "Whether penalty under section 271D, in view of facts and circumstances, can be entirely deleted or matter can be restored back on the file of the Assessing Officer for reconsideration?" Per Shri Joginder Pall, Accountant Member.- Normally I would have immediately agreed to the draft question proposed by my Ld. brother for reference under section 255(4) of the Income-tax Act, 1961. But after I had sent my proposed draft order on 3-9-2004 and receipt of proposed order of the JM, on 25-4-2005, there have been some developments of the case which need to be mentioned. These have not been incorporated in the order of Hon'ble JM who wrote his order afterwards although he has placed reliance on the same. 2. Once the Hon'ble JM conveyed to me that ....
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....stored to the file of Assessing Officer for reconsideration ? (ii) Whether, in the facts and circumstances of the cases and having informed his intention of writing a dissenting order on 15-9-2004 and before sending a dissenting order on 25-4-2005, the action on the part of Hon'ble JM in becoming a party to a subsequent decision by the Division Bench on 30-11-2004, expressing a contrary view than proposed by the AM in the initial draft order is in conformity with the procedure laid down under section 255(4) of the Act? (iii) Whether, subsequent order passed by the Division Bench on 30-11-2004 is binding on the Member who proposed the initial draft order expressing a contrary view and he is bound to modify the initial proposed order to fall in line with subsequent order which did not exist on the date when Bench heard the appeals and the Member sent the initial draft order?" THIRD MEMBER ORDER PerShri Vimal Gandhi, President. - On account of difference between the learned Members of the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar, the following questions have been referred to me under section 255(4) of the Income tax Act:- Questions proposed by the learned Judicial ....
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.... loan or deposit, any loan or deposit taken or accepted earlier by such person from the depositor is remaining unpaid (whether repayment has fallen due or not), the amount or the aggregate amount remaining unpaid; or (c) the amount or the aggregate amount referred to in clause (a) together with the amount or the aggregate amount referred to in clause (b), is (twenty) thousand rupees or more (since the case of the assessee does not fall within the purview of either of the proviso, hence these are not being reproduced)." 4. It may be relevant to state that both the assessees do not maintain any books of account nor they have ever been assessed under the Income-tax Act. However, from the assessment of one Shri Harbans Lal Prop. M/s. Juneja Traders, Fazilka, it was found that loans in cash were given by that concern to several parties in violation of the terms of sections 269SS and 269T of the Income-tax Act. Accordingly, proceedings under section 269SS were taken against the assessees and show-cause notice was issued to them as to why penalty under section 271D be not imposed in their cases. The matter was ultimately referred to the Joint. C.I.T., Bhatinda Range, Bhatinda, who after....
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....30,000 in each case in each year with the following observations:- "5. I have given careful consideration to the views expressed by both the sides. It is a factual position that the appellant has taken the loan/deposit from Shri Harbans Lal, Prop. M/s. Juneja Traders, Fazilka. It is also a factual position that the Fazilka party has given loans to different individuals in and around the area of Fazilka. It is also a factual position that the Jt. C.I.T. has levied penalty in most of the cases of the loanees of Shri Harbans Lal, Prop. M/s. Juneja Traders, Fazilka under the provisions of section 271D of the Income-tax Act, 1961 as he has held that all the loanees have contravened the provisions of section 269SS of the Income-tax Act, 1961. It is also a factual position that the ITO, Abohar has recorded the statement of most of the loans of M/s. Juneja Traders, Fazilka, Prop. Shri Harbans Lal wherein they have started that they has taken loan from Fazilka party. They have also stated that they have taken loan amounting to Rs. 10,000 and had returned it with interest at a nominal instalment running from Rs. 100 to Rs. 200 per day and once the principal including the interest is returne....
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....enue Authorities accepted above order of the learned CIT(A). The assessees, however, remained aggrieved and impugned the order in appeals before the Income-tax Appellate Tribunal. 8. After hearing the parties, the learned Accountant Member proposed (he leading order and cancelled the penalties sustained by the learned CIT(A). His reasonings for taking the above view can be summarised as below:- (i) The copies of account of assessees in the books of account of M/s. Juneja Traders, Fazilka obtained by the Assessing Officer were not given to the assessees. Copy of statement of Shri Harbans Lal was also not given even during the penalty proceedings. No opportunity to cross-examine Shri Harbans Lal was allowed to these persons. Thus action of the Assessing Officer in relying upon the accounts of a third party without confronting the affected parties and without affording opportunity to cross-examine Shri Harbans Lal violated the principles of natural justice. Above evidence could not form basis of levy of penalty. For above view the learned Accountant Member relied upon the decision of the Hon'ble Supreme Court in the case of Kishanchand Chela Rani v. CIT [1980] 125 ITR 713 and the de....
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....t be taxable. It is, therefore, imperative that the Revenue authorities must exercise due care and examine the case from various angles before imposing penalty under these sections. Such approach has not been adjudicated in the present cases. (iv) The object of provisions of sections 269SS and 269T was to curb tax evasion. The assessees are petty persons with no taxable income. They never filed any income-tax return. In spite of heavy loans alleged to be taken by them, no assessments/reassessments were initiated in those cases. The assessees had clearly acted bona fidely. These people were also not aware of statutory provisions. The real culprit was Shri Harbans Lal, who claimed to have advanced cash loans to these persons out of undisclosed income. In the above background, levy of penalty when there was no intention to avoid any tax, was unjustified. No contumacious or dishonest conduct on the part of the assessee has been proved. The matter is duly covered by the often cited judgment of the Hon'ble Supreme Court in the case of Hindustan Steel Ltd. (v) In the ultimate para, the learned Accountant Member observed as under:- "In the present cases, the authorities below have faile....
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....ng in opposite directions. For smooth functioning of the Benches and of the Institution as a whole individualistic approach and ego has to be suppressed by adopting fair, reasonable and objective approach aimed at advancing cause of justice. Conflicts and disputes as far as possible are to be adopted. I am not suggesting that Members are not entitled to disagree or pass dissenting orders. Disagreement and dissenting is essential for development of law and is healthy but disagreement has to be shown in a graceful manner. It should not lead to any bitterness or disgrace, nor it should damage the image of the institution. 12. In the present case, after the learned Judicial Member had made suggestion to the learned Accountant Member and when he found that the suggestions were not acceptable to the learned Member, the learned Judicial Member should have stopped at that. There was absolutely no need for him to write D.O. letters and repeat his suggestion with a view to force the other Member to agree to his point of view, particularly when the proposed order of the learned Accountant Member was with him for a considerable time. The learned Judicial Member should have written his separat....
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....ial Member took note of the loans shown as per the books of account of M/s. Juneja Traders, Fazilka for the assessment years 1995-96 and 1996-97. He referred to the observations of the Assessing Officer and the opportunities of being heard provided by him to the assessee. He further referred to the written submissions dated 12-1-2000, not signed by the assessee and to the contentions raised therein. He observed that the Assessing Officer did not find any force in the submissions advanced on behalf of the assessee. He referred to the observations of the Assessing Officer that the assessee was making repayment of loans regularly. He noted the circumstances under which penalty was imposed under section 269SS of the Income-tax Act. 16. The learned Judicial Member thereafter noted the proceedings which took place before the learned CIT(A). He further referred to the statement of Shri Harbans Lal Juneja where he had stated that against advanced cash loan of Rs. 10,000 he was actually advancing Rs. 8,500 which was received back in instalment of Rs. 100 per day. The learned Judicial Member also referred to the observations of the learned CIT(A) holding that entries in the books of account....
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....before the Assessing Officer that in connection with illness of his wife he borrowed these funds after banking hours and sought time to substantiate the plea raised which plea of the assessee was not appropriately addressed by Jt. CIT who rejected the same but before ld. CIT(A), the assessee comes out with a totally different plea and also filed fresh evidence in the shape of photocopies of the receipts stated to have been issued by Shri Harbans Lal without formally applying for admission of such evidence and ld. CIT(A) without adhering to the provisions of Rule 46A of IT Rules, not only admitted such evidence but even considered the same before arriving at the conclusion drawn by him. There is no mention about statement of Shri Habans Lal having been recorded or forming part of penalty proceedings but learned CIT(A) is found to have not only mentioned about such statement, he has also considered the same for arriving at the conclusion drawn. Learned CIT(A) while discussing the case has referred to repayment of loan in instalment of Rs. 100 or Rs. 200 per day but if the photocopies of the receipts filed by the assessee, it would transpire that these receipts do not support such inf....
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....accepted loans with effect from February 1995 to March 1996 and the assessee was making repayments of loans regularly. The assessee came up with detailed explanation before first appellate authority, which he accepted partly on the basis of relevant and irrelevant considerations. The course of action adopted by learned C1T(A) is not in accordance with the settled position because before admitting any material in the proceeding learned CIT(A) should have confronted such material to the Assessing Officer and should have sought his objection which he failed to do so. It is also settled law that necessary opportunity is required to be given by the officer imposing the penalty and if such opportunity is lacking, the proper course is that the matter should be remanded back to the file of the officer for giving adequate opportunity. Hon'ble Supreme Court in the case of Tin Box Co. v. CIT [2001] 249 ITR 216 has opined as under:- 'Held, reversing the decision of the High Court, that once the Tribunal found that the Income tax Officer had not given to the assessee proper opportunity of being heard, that the assessee could have placed the evidence before the appellate authority or before the....
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....The matter was fixed for hearing and I have heard Shri Sudhir Sehgal, Advocate on behalf of the assessees and Shri Jayant Kumar, the learned D.R. for the Revenue. Shri Sudhir Sehgal relied upon the order of the learned Accountant Member. He further argued that there was no clear evidence of advancing loan of Rs. 20,000 in this case. In this connection, he referred to page 5 of the paper book, which was copy of account of the assessee from 1-4-1995 to 31-3-1995 in account books of M/s. Juneja Traders. Total amount received as loan on different dates was Rs. 82,000 against which Rs. 18,200 was paid by the assessee. On the next page, some further amount was received and whole balance was cleared by sixth of January. Nobody stuck day-to-day balance to show that at any stage of loan/deposit exceeded Rs. 20,000. In fact certain return of loans were not recorded in above account and this position was duly accepted by the learned CIT (Appeals) in the impugned order which has been accepted by the revenue. Likewise the learned counsel has referred to account of the assessee on page 8 of the paper book which was allegedly maintained from 1-4-1995 to 31-3-1996. However, the said page contained....
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....cer. He recorded categorical factual findings to-which reference had been made earlier. It was open to the revenue to challenge the said order in further appeal before the Appellate Tribunal but that was not done. From above, it follows that order of learned CIT (Appeals), as far as revenue is concerned, have attained finality. In appeal filed by the assessee, the Revenue could only support the order of CIT (Appeals) and not challenge the same by raising various grounds. They could only argue that no further relief be allowed to the assessee. They had no right to contend that the CIT(A) had erroneously taken additional evidence or had recorded erroneous finding of facts. If the Revenue could not contend and challenge the order of the CIT(A) in the given circumstances, it was much less open to the Hon'ble Tribunal to find fault with the order or with any finding recorded in support of the claim of the assessee. Therefore, observation of the learned Judicial Member relating to admission of the additional evidence in violation of the provisions of Rule 46A of the Income-tax Rules and observation that factually finding recorded by the CIT(A) is erroneous are not only unjustified on the....