Shri Balwan Singh
Asst. Commissioner of Income Tax
ITA No. 2383/DEL/2019
Assessment Year 2008-09
Decision in Favour: AssesseeINCOME TAX APPELLATE TRIBUNAL, DELHI BENCH “A” DELHI
The assessee is engaged in the business of transportation as proprietor of M/s. Balwan Road Carriers & M/s. Global Travelling Corporation. A survey under Section 133A was conducted on 19.11.2007 on the business premises of the assessee. Certain documents and registers were impounded from the business premises towards lorry receipts, expenses, and other entries. In the course of the assessment under Section 143(3) dated 31.12.2010, the assessee could not produce any books of accounts and claimed that the assessee does not maintain any regular books of account. The assessment was completed on the basis of registers impounded. These registers allegedly contained entities of cash receipts and cash payments exceeding Rs.20,000/- from various persons which are admitted as cash loan deposits receipts and cash loan deposits repayments. The competent authority, i.e., Additional Commissioner of Income Tax invoked the provisions of Sections 271D and 271E for alleged infringement of Sections 269SS and 269T and imposed the penalty of Rs.21,82,000/- and Rs.16,70,500/- respectively.
The assessee challenged the imposition of penalty under Sections 271D and 271E of the Act before the CIT(A). The CIT(A) however dismissed the appeal of the assessee and confirmed the action of the Assessing Officer.
Being aggrieved, the assessee preferred to appeal before the Tribunal.
Ld. counsel for the assessee contended that the cash has been received by way of a temporary loan from family members for business needs and used for payment to drivers and other business associates to enable him to ply the trucks.
The Tribunal bench comprising Shri Saktijit Dey, Judicial Member & Shri Pradip Kumar Kedia, Accountant Member observed that the assessee is engaged as a transporter and has not maintained any regular books of account. The assessment has been made on estimations. The assessee in the course of the survey itself, on being questioned, responded that the cash has been received by way of a temporary loan from family members to meet the business exigency having regard to the nature of the business he is involved in. The fact of business exigency has not been denied by the Revenue.
Therefore, imposition of penalty separately towards such receipts by way loan is not justified. The impromptu response of the purportedly uneducated assessee at the time of survey, in our view, requires to be seen in its natural perspective and requires to be given credence. The assessee has declared that the money was received from family members to meet the business exigencies. Having regard to the nature of business of the assessee and ground realities, such explanation appears plausibleINCOME TAX APPELLATE TRIBUNAL, DELHI BENCH “A” DELHI
The assessee has shown existence of reasonable cause in accepting/repayment of cash to meet the immediate business requirements. In our view, mitigating circumstances exists to exonerate the assessee from the recourse of penalty under Sections 271D and 271E of the Act. We accordingly set aside the order of the CIT(A) and cancel the penalty imposed under Sections 271D and 271E of the Act by the competent authorityINCOME TAX APPELLATE TRIBUNAL, DELHI BENCH “A” DELHI
In the result, the appeal of the assessee is allowed.