ITO, New Delhi v. M/s Tridev Buildwell Pvt. Ltd.,, New Delhi

ITA 4686/DEL/2009 | 2006-2007
Pronouncement Date: 18-02-2010 | Result: Dismissed

Appeal Details

RSA Number 468620114 RSA 2009
Assessee PAN AACCT4080C
Bench Delhi
Appeal Number ITA 4686/DEL/2009
Duration Of Justice 2 month(s) 7 day(s)
Appellant ITO, New Delhi
Respondent M/s Tridev Buildwell Pvt. Ltd.,, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 18-02-2010
Appeal Filed By Department
Order Result Dismissed
Bench Allotted H
Tribunal Order Date 18-02-2010
Date Of Final Hearing 11-02-2010
Next Hearing Date 11-02-2010
Assessment Year 2006-2007
Appeal Filed On 11-12-2009
Judgment Text
I.T.A. NO. 4686/DEL/2009 1/7 IN THE INCOME TAX APPELLATE TRIBUNAL NEW DELHI BENCH H BEFORE SHRI K.G. BANSAL ACCOUTANT MEMBER AND SHRI GEORGE MATHAN JUDICIAL MEMBER ITA NO. 4686 /DEL/2009 (ASSESSMENT YEAR 2006-07) ITO WARD 16(4) VS. M/S. TRIDEV BUILDWELL P.LTD. NEW DELHI FLAT NO.1104 11 TH FLOOR HEMKUNT CHAMBERS 89 NEHRU PLACE NEW DELHI. (APPELLANTS) (RESPONDENTS) PAN / GIR NO. AACCT4080C APPELLANT BY: SHRI N K CHAND SR. DR RESPONDENT BY: SHRI GOPAL NATHANI ADV. ORDER PER GEORGE MATHAN JM: 1. THIS APPEAL BY THE REVENUE HAS BEEN PREFERRED AG AINST THE ORDER OF LD. CIT(A)-XIX NEW DELHI IN APPEAL NO.52/2009-2010 DATED 06.09.2009 FOR THE ASSESSMENT YEAR 2006-07 AGAINST THE DELETION OF PENALTY IMPOSE D U/S 271D OF THE ACT. 2. IT WAS THE SUBMISSION BY THE LD. D.R. THAT THE A SSESSEE HAD PURCHASED A PROPERTY FROM SHRI PREM NATH & ROOP CHAND AND THE SELLER OF THE PROPERTY HAD PAID THE S TAMP DUTY OF RS.3 00 300/- TO THE GOVERNMENT ON BEHALF O F I.T.A. NO. 4686/DEL/2009 2/7 THE ASSESSEE IN CASH ON ACCOUNT OF REGISTRATION CHA RGES. IT WAS THE SUBMISSION THAT THE A.O. HAD HELD THAT T HE AMOUNT PAID BY THE SELLER OF THE PROPERTY TOWARDS S TAMP DUTY FOR REGISTRATION OF THE PROPERTY WAS THE LOAN TAKEN AND THE SAME HAVING BEEN TAKEN IN CASH THE ASSESSE E HAD VIOLATED THE PROVISIONS OF SECTION 269SS OF THE ACT AND CONSEQUENTLY LEVIED PENALTY U/S 271D. IT WAS T HE SUBMISSION THAT THE CIT(A) HAD DELETED THE PENALTY HOLDING THAT IT WAS ONLY THE TECHNICAL/VENIAL BREAC H OF LAW AND PENALTY COULD NOT BE LEVIED FOR SUCH BREACH BY FOLLOWING THE DECISION OF HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN STEELS LTD. 83 ITR 26 29. IT WA S ALSO THE SUBMISSION THAT THE LD. CIT(A) HAD ACCEPTED THE REASONABLE CAUSE AND HAD RELIED UPON THE DECISION O F HON'BLE HIGH COURT OF JHARKHAND IN THE CASE OF OMEC ENGINEERS REPORTED IN 294 ITR 599. IT WAS THE SUBMISSION THAT THE FACT THAT THE ASSESSEE HAD TAKE N THE LOAN IN CASH WAS IN VIOLATION OF THE PROVISIONS OF SECTION 269SS AND PENALTY WAS LIABLE TO BE CONFIRME D. IT WAS THE SUBMISSION THAT THE ORDER OF LD .CIT(A) SHOULD BE REVERSED. 3. IN REPLY THE LD. A.R. SUBMITTED THAT THE ASSESS EE HAD BEEN INCORPORATED ON 10.03.2006 WITH THE MAIN OBJEC TS OF TRADING AND DEVELOPMENT OF REAL ESTATE. THE ASS ESSEE HAD BEEN INCORPORATED ON 10.03.2006 THE ASSESSEE DI D I.T.A. NO. 4686/DEL/2009 3/7 NOT HAVING BANK ACCOUNT AS ON 31.03.2006. IT WAS T HE SUBMISSION THAT IN THE MEANTIME THE ASSESSEE HAD PURCHASED THE PROPERTY FOR CONSIDERATION OF RS.53 05 300/- AND AS THE ASSESSEE DID NOT HAVE ADEQUATE FUNDS FOR THE STAMP DUTY THE SELLER HAD P AID THE STAMP DUTY ON BEHALF OF THE ASSESSEE. IT WAS T HE SUBMISSION THAT THE ASSESSEE HAD NOT TAKEN ANY LOAN IN CASH BUT IN FACT THE SELLER HAD PAID THE CASH DIREC TLY TO THE GOVERNMENT TOWARDS THE REGISTRATION CHARGES ON BEHALF OF THE ASSESSEE. IT WAS THE SUBMISSION THAT THIS AMOUNT HAD BEEN TREATED AS A LOAN AND THE A.O. HAD LEVIED PENALTY U/S 271D FOR THE VIOLATION OF THE PROVISIONS OF SECTION 269SS. IT WAS THE SUBMISSION THAT IT WAS ONLY BECAUSE THE ASSESSEE DID NOT HAVE A BAN K ACCOUNT THE ASSESSEE COULD NOT TAKE THE AMOUNT THRO UGH THE CHEQUE. IT WAS ALSO THE SUBMISSION THAT AS THE SHORTFALL IN THE FUNDS AVAILABLE WITH THE ASSESSEE AT THE TIME OF REGISTRATION WAS IMMEDIATELY REQUIRED FOR T HE PURPOSE OF REGISTRATION THE SELLER OF THE PROPERTY HAD PAID THE SAME ON BEHALF OF THE ASSESSEE TO THE GOVERNMENT ACCOUNT ITSELF. IT WAS THE SUBMISSION T HAT IT WAS ONLY BECAUSE OF THE SHORTAGE AT THE TIME OF REGISTRATION AND THE FACT THAT THE REGISTRATION HAD TO GO THROUGH AT THAT POINT OF TIME THAT THE AMOUNT WAS P AID IN CASH ON BEHALF OF THE ASSESSEE TOWARDS THE STAMP DU TY I.T.A. NO. 4686/DEL/2009 4/7 FOR REGISTRATION OF THE PROPERTY. IT WAS THE SUBMI SSION THAT AS PER THE PROVISIONS OF SECTION 273B IN VIEW OF THE REASONABLE CLAUSE AS EXPLAINED BY THE ASSESSEE BEIN G THE IMMEDIATE REQUIREMENT OF FUNDS FOR THE PURPOSE OF REGISTRATION OF THE PROPERTY THE CIT(A) HAD DELETE D THE PENALTY. IT WAS THE FURTHER SUBMISSION THAT GENUI NENESS OF THE TRANSACTION IS NOT IN DISPUTE. IT WAS THE SUBMISSION THAT THE ORDER OF LD. CIT(A) IS LIABLE T O BE UPHELD. IN REPLY THE LD. D.R. SUBMITTED THAT THE GENUINENESS OF THE LOAN AND DEPOSIT IS NOT A CRITER IA IN RESPECT OF THE VIOLATION OF THE PROVISIONS OF SECTI ON 269SS AND THE LEVY OF PENALTY U/S 271B OF THE ACT. HE PLACED RELIANCE UPON THE DECISION OF HON'BLE HIGH C OURT OF MADRAS IN THE CASE OF KASI CONSULTANT CORPORATIO N REPORTED IN 311 ITR 419. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE ASSESSEE HAS BEEN INCORPORATED ONLY ON 10.03.2006. IT IS NOTICED THAT THE ASSESSEE HAS PURCHASED A PROPER TY BEFORE THE END OF THE RELEVANT ASSESSMENT YEAR. IT IS ALSO NOTICED THAT EVEN BEFORE THE A.O. AS WELL AS T HE LD. CIT(A) THE ASSESSEE HAD SPECIFICALLY MENTIONED THA T THE ASSESSEE DID NOT HAVE A BANK ACCOUNT. THE PURCHASE OF THE PROPERTY IS ALSO NOT IN DISPUTE. THE STAMP DUT Y PAID FOR THE PURCHASE OF THE PROPERTY IS ALSO NOT IN DIS PUTE. THE ONLY ISSUE FOR THE LEVY OF PENALTY IS THAT THE I.T.A. NO. 4686/DEL/2009 5/7 ASSESSEE HAS TAKEN A LOAN OF RS.3 00 300/- FROM TWO OF THE SELLERS OF THE PROPERTY AT THE TIME OF REGISTRA TION FOR THE PURPOSE OF PAYMENT OF STAMP DUTY. OBVIOUSLY WH EN THE REGISTRATION IS TO BE DONE BOTH THE BUYER AND THE SELLER HAS TO BE PRESENT. WHEN THERE ARE MULTIPLE S ELLERS OF THE PROPERTY TO GET THE SELLERS COLLECTED ON A S PECIFIED DATE IT IS A DIFFICULT POSITION ESPECIALLY WHEN THE PAYMENTS DUE TO THEM HAVE BEEN GIVEN TO THEM. THE ASSESSEE HAVING BEEN ABLE TO GET THE SELLERS OF THE PROPERTY FOR REGISTRATION AND THE ASSESSEE HAVING A SHORTFALL TOWARDS STAMP DUTY AND THE SELLERS HAVING ASSISTED THE ASSESSEE BY PAYING PART OF THE STAMP D UTY AT THE TIME OF REGISTRATION IN CASH TO THE GOVERNMENT ACCOUNT CANNOT BE SAID TO BE A CONTEMPTUOUS ACT ON THE PART OF THE ASSESSEE WITH THE INTENTION TO VIOLATE THE PROVISIONS OF SECTION 269SS OF THE ACT. AT THE TIM E OF REGISTRATION OF THE PROPERTY WHEN PROCESS OF REGIST RATION IS BEFORE THE SUB-REGISTRAR NO PERSON WOULD BE THI NKING OF LEGAL IMPLICATIONS AND WOULD BORROW CASH FOR PAYMENT TO THE GOVERNMENT ACCOUNT WHICH IS IMMEDIATELY REQUIRED. THIS ACT OF THE ASSESSEE IN BORROWING THE FUNDS FOR THE PURPOSE OF REGISTRATION CAN BEST BE TERMED AS TECHNICAL/VENIAL BREACH OF THE PROVISIONS OF SECTION 269SS. SUCH TECHNICAL/VENIAL BREACH OF LAW CANNOT BE SAID TO LEAD TO LEVY OF PEN ALTY I.T.A. NO. 4686/DEL/2009 6/7 ESPECIALLY IN VIEW OF THE PROPOSITION LAID DOWN BY THE HON'BLE SUPREME COURT IN THE CASE OF HINDUSTAN STEE LS LTD. REFERRED TO SUPRA. FURTHER VIOLATION OF THE PROVISIONS OF SECTION 269SS DOES NOT LEAD TO AUTOMA TIC LEVY OF PENALTY U/S 271D AS THE PROVISION OF SECTIO N 273B DOES RECOGNIZE THAT IF THE ASSESSEE HAS A REASONABLE CAUSE PENALTY U/S 271D NEED NOT BE LEVI ED. FURTHER EVEN THE DECISION OF HON'BLE HIGH COURT OF MADRAS RELIED UPON BY THE LD. D.R. IN THE CASE OF K ASI CONSULTANTS CORPORATION REFERRED TO SUPRA HAS RECOGNIZED PROPOSITION THAT IF URGENCY IS PROVED TH EN THE VIOLATION OF SECTION 269SS CAN BE CONDONED AND PENALTY U/S 271D NOT LEVIED. THIS OBVIOUSLY GIVES SUPPORT TO THE PROPOSITION THAT IF THERE IS REASONA BLE CAUSE THEN PENALTY U/S 271D NEED NOT BE LEVIED WHIC H PROPOSITION HAS ALSO BEEN LAID DOWN BY THE HON'BLE HIGH COURT OF JHARKHAND IN THE CASE OF AMIT ENGINEE RS REFERRED TO SUPRA. HERE IT IS NOTICED THAT THERE WAS URGENCY IN REQUIREMENT OF FUNDS IN SO FAR AS THE AS SESSEE DID NOT HAVE A BANK ACCOUNT AT THE TIME OF REGISTRA TION OF THE PROPERTY AND CONSEQUENTLY THE ASSESSEE DID H AVE REASONABLE CAUSE FOR ACCEPTING THE LOAN. IN THESE CIRCUMSTANCES WE ARE OF THE VIEW THAT THE FINDINGS OF LD. CIT(A) ON THE ISSUE IN CANCELING THE PENALTY IS ON I.T.A. NO. 4686/DEL/2009 7/7 THE RIGHT FOOTING AND DO NOT CALL FOR ANY INTERFERE NCE. IN THESE CIRCUMSTANCES APPEAL OF THE REVENUE IS DISMI SSED. 5. IN THE RESULT THE APPEAL OF THE REVENUE STANDS DISMISSED. 6. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT O N 18 TH FEB. 2010. SD./- SD./- (K.G. BANSAL) (GEORGE MATHAN) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED:18 TH FEB. 2009 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER 4. CIT(A) 5. DR DY. REGISTRAR ITAT NEW DELHI