16-03-2020, Auto Fuel Centre, Section 269T, 271E, Tribunal Kolkata

Section - 269T, 271E, 273B, 269SS

Order Date - 16-03-2020

Favouring - Assessee

Court - Tribunal Kolkata

Appellant - Auto Fuel Centre

Respondent - JCIT

Justice - A. T. VARKEY, JM & DR. A.L. SAINI, AM

Citation - 320Taxpundit736

Appeal No. - ITA No.398/Kol/2019

Asstt. Year - 2013-14

PER : Dr. A. L. Saini, AM

The captioned appeal filed by the assessee, pertaining to Assessment Year 2013-14, is directed against the order passed by the ld. Commissioner of Income Tax(Appeals), Durgapur dated 25.01.2019 which in turn arises out of an assessment orde passed by Assessing Officer u/s 271E of the Income Tax Act, 1961 (hereinafter referred to as the ‘Act’).

2. The grounds of appeal raised by the assessee are as follows:

1.FOR THAT the Ld. Commissioner of Income Tax (Appeals) Durgapur failed to appreciate that none of the conditions precedent required to be satisfied for the assumption of jurisdiction u/s. 271E read with section 269T of the Income Tax Act, 1961 existed and/or have been complied with and/or fulfilled in the instant case by the Ld. Joint Commissioner of Income Tax. Range 1, Durgapur and his specious action in upholding the impugned order imposing penalty to the extent of Rs. 5,80,000/- in that legal perspective is therefore ab initio void, ultra vires and ex-facie null in law.

2. FOR THAT on a true and proper interpretation of the scope and ambit of the provisions of section 271E of the Income Tax Act, 1961, the Ld. Commissioner of Income Tax (Appenls) Durgapur misconceived his jurisdiction in upholding the action of the Ld. Joint Commissioner of Income Tax, Range 1, Durgapur of passing the specious order imposing penalty to the extent of Rs.5,80,000/- misconstruing the expression "any other preson” appearing in the provisions of section 269T of the Act and his purported finding reached on such tenuous premise is completely unfounded, unjustified and untenable in law.

3.FOR THAT the Ld. Commissioner of Income Tax (Appeals) Durgapur acted unlawfully in upholding the order imposing penalty u/s. 271E of the Income Tax Act, 1961 amounting to Rs. 5,80,000/- passed by the Ld. Joint Commissioner of Income Tax, Range 1- Durgapur and was remiss in not taking into consideration the 'reasonable cause' as envisaged within the scope and ambit of the provisions of section 273B of the Income Tax Act, 1961 on the facts and circumstances of the instant case and the adverse conclusion reached on that behalf is totally illegal, illegitimate and infirm in law.

3. The facts of the case which can be stated quite shortly are as follows. The assessee filed its return of income for the A.Y. 2013-14 on 19-09-2013 disclosing total income of Rs.1,79,515/-. An assessment u/s 143(3) of I.T. Act 1961 has been made on 21/03/2016 on a total income of Rs 2,72,280/-. The assessing officer noticed that the assessee had repaid cash loan of Rs.1,40,000/- and 4,40,000/- in aggregate to loan creditors Sri Bijay Guha and Sri Samarendra Sinha Babu respectively, on different d tes as mentioned in the following table: The assessing officer observed that total repayment of loan in cash to the tune of Rs. 5,80,000/-(Rs.1,40,000 + and 4,40,000) was made by assessee during A.Y. 2013-14 which is in contravention of the provisions of section 269T of the I.T. Act 1961, which attracts Penalty u/s 271E of the I.T. Act 1961. Therefore, AO issued notice to the assessee u/s 271E of the I.T. Act 1961.

In response to the notice, the assessee in his letter dated 31-08-2017 stated that the entire round of transactions took place within the relatives and friends of the family and he had made repayment of the money to the persons who were in dire need of funds on those days, in order to enable them to carry on their business. The assessee also submitted before the AO that the transactions of repayment of loan in question in the instant case are genuine and bona fide, th refore the penal proceedings u/s 271E of the I.T. Act, 1961 should not be initiated.

However, the assessing officer rejected the ontention of the assessee and imposed the penalty of Rs.5,80,000/- u/s 271E of the I.T. Act 1961 for violation of provisions of section 269T of the I.T. Act 1961.

4. Aggrieved by the order of the ssessing officer, the assessee carried the matter in appeal before ld CIT(A) who h s confirmed the penalty imposed by the assessing officer. Aggrieved the assessee is in appeal before us.

5. We heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record. We note that assessee, a
partnership firm, is an authorized dealer of Hindusthan Petroleum Corporation Limited which is engaged in retail trading of motor spirit and high speed diesel. During the previous year relevant to the assessment year under dispute, the assessee had repaid different amounts on various dates to two persons, namely Shri Bijay Guha in the sum of Rs. 1,40,000/- and Shri Samarendra Sinhababu amounting to Rs. 4,40,000/- aggregating to a sum Rs. 5,80,000/-. According to the ld. Assessing Officer, such repayment of the amounts to the partners had infringed the provisions of section 269T of the Income Tax Act, 1961.

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