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TMI Blog2015 (1) TMI 1395X X X X Extracts X X X X X X X X Extracts X X X X ..... e - ITA Nos. 196/Bang/2014, 197/Bang/2014 , 198/Bang/2014 , 199/Bang/2014 , 200/Bang/2014 , 201/Bang/2014 , 202/Bang/2014 - - - Dated:- 22-1-2015 - SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI ABRAHAM P. GEORGE , ACCOUNTANT MEMBER Appellant by : Dr. P.K. Srihari, Addl. CIT (DR) Respondent by : Shri V. Sridhar, C.A. O R D E R Per Bench These are appeals filed by the revenue against the orders of the ld. CIT(Appeals) deleting penalties levied on the assessee for the various assessment years involved. 2. Relevant appeal nos., assessment years, section under which penalty was levied, penalty amount and short reason for levy of penalty are reproduced in the chart hereunder:- ITA Nos. A.Y. Section under which penalty levied Penalty amount Nature 196/B/2014 2005-06 271D (violation of 269SS) 6,50,000 Accepting cash loan from one Shri Ashok Bhimappa Naik 197/B/2014 2006-07 271E (violation of 269T) 3,50,000 Repayin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for violation of section 269T and levy of penalty u/s. 271E for A.Ys. 2006-07 and 2007-08. 4. Reply of the assessee was that it was an institute which was situated in a remote area run by its Chairman Members, who were all uneducated persons. As per the assessee, no loans or deposits were accepted or repaid by the assessee in cash. Transactions were through the management represented by its Chairman who had given the loans. On receipt of this reply, AO required the assessee to give the dates on which amounts were taken/repaid in cash for each assessment year separately. Assessee submitted such details and also pleaded before the AO that transactions were genuine and reflected in books of account. 5. However, AO was not appreciative of the contentions taken by the assessee. He held that sections 269SS 269T had to be interpreted in a strict manner. As per ld. AO, assessee was unable to show a reasonable cause for getting the benefit of Section 273B of the Act. Thus, according to him, the cash transactions invited penalty u/s. 271D/271E of the Act. Penalties were levied accordingly as per table mentioned by us above at para 2. 6. Aggrieved, assessee moved appeals before t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llected from the students. The cash of the appellant society is handled by its chairman A.B.Nayak and the A.O and the JCIT had considered cash handled by the chairman as receipt and repayment of loan from the chairman. The appellant had also contended that no where in the orders the dates of receipt or repayment of cash loans had been mentioned. The appellant has also contended that at the time of survey only the statement of the Principal was recorded and at no point of time the chairman of the society was questioned about the loans. The appellant has further contended that receipt and expenditure accounts prepared earlier were incorrect and therefore, the appellant has redrawn its financial statements on the basis of basic records which had been impounded by the A.O subsequent to the Survey u/s 133A conducted on 06-10-2010 and which were still in the custody of the department. The revised financial statements do not show any receipt or repayment of cash loans. The JCIT, Bijapur Range, Bijapur in his aforesaid remand report prepared after considering the appellant s submissions including revised financial statements, affidavit and impounded material has mentioned that it is true t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in view of Rule 46A(4) of the I.T. Rules, 1962. (5) In the facts and circumstances of the case, the learned CIT(Appeals), erred in ignoring the fact that indication or non-indication of the date(s) of loan is inconsequential in the face of the fact that the hand loans are reflected in the audited Balance sheet of the assessee and the fact that violation of provisions of section 269SS/269T of the I.T. Act, 1961 was admitted by the assessee in the assessment proceedings, penalty proceedings and grounds of appeal filed before the CIT(Appeals). (6) In the facts and circumstances of the case, the order of the CIT(Appeals) may be set aside for re-examination of the facts of the case in full. 9. First issue raised by the revenue is that fresh financial statements were accepted by the ld. CIT(A) in contravention of Rule 46A. Rule 46A(1) (2) of the Income-tax Rules are reproduced hereinbelow:- 46A. (1) The appellant shall not be entitled to produce before the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals), any evidence, whether oral or documentary, other than the evidence produced by him during the course of proceedings before the Assessi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The contention of the assessee was pursued along with impounded materials and the submissions made before your goodself and the findings are as under- (a) The exact date of receiving and repayment of loan, is not ascertainable from the material in possession of the Department. Again this is evidenced by the order passed by the then AO levying penalty wherein no exact date of receiving and payment of loan has been mentioned in the penalty order for all the AYs. (b) The books of account prepared fresh and claimed to be correct by the assessee are test checked for their correctness vis- -vis impounded materials and are found to be in order. In view of the above, it is submitted that the appeal may be decided on merits. 12. A reading of the remand report clearly shows that the AO had verified the revised financial statements furnished by the assessee before the CIT(A). In the remand proceedings it is mentioned that the revised statements were tallying with the books of account and other impounded material. It is also mentioned that date of receipt and payment of cash loan, if any, was not ascertainable. For levy of penalty u/s. 271D as well as 271E, it is required for the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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