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TMI Blog2023 (3) TMI 761X X X X Extracts X X X X X X X X Extracts X X X X ..... remain un-rebutted. Ignorance of law - As it is necessary to keep in mind the provisions of law invoked. The issue is not to be decided on the plea of ignorance of law and is to be considered under the umbrella provision of Section 273B of the Income Tax Act, 1961. Thus, the pleading that the assessee was in ignorance of law at best can be considered to be a submission so as to argue that it is not a case of willful and deliberate defiance of law on the part of the assessee. In this case admittedly the assessee has led sufficient explanations consistently on record with evidence which remains unrebutted to plead a reasonable cause. No doubt, what would constitute a reasonable cause cannot be specifically defined by any clear definition it is to be considered on the basis of all the possible factors which may come into play for the actions of the assessee. The very expression 'reasonable cause' itself cannot be satisfactorily defined for all purposes, times and situations. The simple dictionary meaning of 'reasonable' is fair, practical and sensible. Over a period of time, it has been seen that a reasonable cause is a standard of proof that is applied to a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 271D, the assessee as per record filed written submissions. These are extracted in para 3 of the Penalty order and are reproduced hereinafter for completeness: 3. The counsel of the assessee submitted that the assessee owns very small Janta flat and for the purpose of arranging funds for the marriage of her daughter, the assessee sold her impugned Janta flat for a total consideration of Rs. 9,10,000/-. The registry for the sale of the aforesaid impugned Janta flat was duly executed on 22.11.2016 with Sub Registrar VI, New Delhi vide registration No. 11070. The sale consideration was received in cash on different dates i.e. Rs. 150,000/- on 17.02.2016, Rs. 160,000/- on 12.04.2016, Rs. 240,000/- on 16.06.2016, Rs. 170,000/- on 20.07.2016 and Rs. 190,000/- on 10.10.2016. The full consideration was received upto 10.10.2016 and e-stamp for the registry of the impugned Janta flat was purchased on 10.10.2016 and due to administrative and procedural delays the registration was executed on 22.11.2016. It was also submitted that the sole reason for the sale of aforesaid impugned Janta flat was that the assessee was in-dire need of funds for the purpose of materializing the marriage of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o unsuccessful. For the purposes of completeness, it is necessary to bring out the contentions of the assessee as summed up by the First Appellate Authority referring to facts as available before the AO: c) The contentions of Appellant before the AO are as under:- i. Appellant sold the Janta Flat for arranging funds for marriage of her daughter. Registry for sale was executed on 22.11.2016 with Sub Registrar VI, Delhi. ii. Sale consideration was received in cash on 5 different dates upto 10.10.2016 and e-stamp was purchased on 10.10.2016. iii. Marriage of Appellants daughter was repeatedly postponed due to shortage of funds although the engagement happened on 07.01.2013. Appellant was in dire needs of funds to materialize her daughter marriage. iv. Buyer of flat told Appellant that he cannot pay in lump sum on single date and he paid it in parts. Marriage was fixed on 08.12.2016 in Rohini, Delhi. v. Husband of Appellant was in capacitated due to major accident so entire burden, of marriage was on Appellant. vi. Appellant relied on various case laws as outlined in para 4 of the order. (emphasis supplied) 3.1. The written submissions of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missions as found advanced in para 3 of the penalty order and assailed the findings in para 5 submitting that the assessee's husband was doing small job work with a goldsmith in Jagraon and admittedly had no assessable income and consequently was a non-filer of return. It has been argued that due to her husband's incapacity on account of some accident, the assessee had to do the running from Jagraon to Delhi frequently for the sale of the asset and utilized the proceeding for making purchases for marriage ceremonies of her daughter which was repeatedly postponed over the years for want of funds. Due to a slump in the market, the sale of the said flat could be finalized with great difficulty. It was his submission that the assessee has led evidences to show that marriage of the assessee's daughter was finalized in the year 2013 and being repeatedly delayed on account of lack of funds ultimately took place in 2016. The proceeds were received in Delhi as the purchaser of the flat who is identified and already named also being a man of small means expressed his inability to make a lumpsum payment and could make smaller payments as per record on five different dates. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a [1972] 83 ITR 26 (SC); Motilal Lal Padampat Sugar Mills Co. Ltd. vs. State of Uttar Pradesh Ors. reported in [1979] 118 ITR 326; Faridkot Bathinda Kshetriya Gramin Bank vs. JCIT reported in [2003] 125 Taxman 268 (ASR.) (MAG.); CIT vs. Saini Medical Store reported in (2005) 276 ITR 79 (P H); CIT vs. Sunil Kumar Goel reported in [2009] 183 Taxman 53 (P H); CIT-1 vs. Smt. M. Yesodha reported in [2013] 31 taxman.com 153 (Madras); CIT vs. Maheshwari Nirman Udyog reported in [2008] 170 Taxman 502 (Rajasthan); CIT vs. Bhagwati Prasad Bajoria (HUF) reported in [2003] 133 Taxman 426 (GAU.); Mohanjeet Singh vs. CIT, Khanna reported in [2016] 70 taxmann.com 335 (Chandigarh-Trib.); Mohan Lal Thakral vs. CIT reported in [2018] 93 taxman.com 156 (Punjab Haryana). On facts attention was also invited to the Paper Book filed wherein at pages 1 to 6 is the copy of the Sale Deed wherein the specific amounts as per the deposits in the bank on the specific dates are mentioned at page 4. Page 1 to 5 of the Paper Book is the typed copy of the Sale Deed and pages 7 to 13 are scanned copies. The said flat, it was submitted, had been purchased on 09.04.2012 for an amount of Rs. 6,50,000/- and finally ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... trict Ludhiana and the expenditure was be incurred at Delhi. 8. That I was having no knowledge that I cannot take the payments in cash against the sale consideration of property and sale consideration was received in cash under a bona fide belief that I can take sale consideration in cash. Sd/- Deponent Verification I do hereby declare that my above statement is true and correct to the best of my knowledge and belief and nothing has been concealed in it. Place : Jagraon Dated : 10.07.2019 Sd/- Deponent 5.5. Copies of the purchase bills of jewellery and cloth at pages 31 and 32 were highlighted. Typed copy of the transactions with the State Bank of India at Jagraon are at pages 33 to 34. Page 35 and 36 is the original statement. The assessee's husband, it was submitted, is handicapped on account of some accident and medical bills evidencing the fact of admission on 30.08.2013 to 09.09.2013 have been filed at pages 37 to 42. The fact that the assessee's daughter got married on a specific date was filed by way of evidence of marriage card, copy available at pages 43 and 44. Written submissions filed before NFAC are at pag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not rely upon the purchaser to make payments by cheques which may or may not be honoured and as argued before the First Appellate Authority that getting the amount deposited by way of RTGS/Cheque in her Jagraon account and then travelling with cash withdrawn at Jagraon to Delhi to make purchases was considered to be unsafe/impractical and alternatively/simultaneously it is seen that as per record, it is also pleaded possibly that there was a limit of cash withdrawals from ATMs. These submissions on record even if canvassed by hind sight to justify that the assessee chose the simplest and surest way of accepting the sale proceeds in Delhi and used the same for making purchases in Delhi for the oncoming marriage of her daughter also in Delhi remain un-rebutted. In addition, ignorance of law has also been pleaded. Agreeing with the arguments of the Ld. Sr. DR that ignorance of law is no excuse. However, it is necessary to keep in mind the provisions of law invoked. The issue is not to be decided on the plea of ignorance of law and is to be considered under the umbrella provision of Section 273B of the Income Tax Act, 1961. Thus, the pleading that the assessee was in ignorance of law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat ignorance of law is not an excuse. I find that the said submission correct in law is not open to debate and is a valid submission. However, in the present set of facts though it is pleaded, it need be emphasized that it has not been the reason or rationale for quashing the penalty. At the cost of re-iteration what is required to be seen for confirming or quashing the penalty imposed is the availability of the shelter provided by Section 273B of the Income Tax Act to the given set of facts. The lee-way given by the provision permitting the assessee to plead reasonable cause for the failure has to be examined fairly. The said argument, accordingly, stands addressed by way of quashing the penalty imposed. Considering the predicament of the present assessee and noticing near similar difficulties experienced by a sizeable number of marginal tax payers lacking proper advice, appropriate exposure I believe that I would be failing in my duty in not highlighting again the urgent need and requirement for the Tax Administration to take necessary steps on a war footing in disseminating relevant information to the public at large i.e. inform them on acceptable ways of transacting and the ne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e system instead of placing reliance on the good advice and offices of systematic supportive tax administration of the country. Hence, in my opinion disseminating financial literacy information for ensuring compliances to the citizens cannot be postponed any further as in the absence of relevant information, the public at large comprising of small taxpayers are left floundering hopelessly in the sea of confusion due to administrative obduracy which fails to provide these people sound helpful advice/assistance and thus by default creating in them a sense of alienation with the Indian polity on account of the administrative apathy. The risks of resultant push of this population inadvertently towards dishonest means of only being seen to be compliant in sheer numbers and percentages should not be overlooked. This population in terms of total financial contribution to the financial kitty of the country may not be contributing much, however, the impact on the socio-economic system of the country by this human population in sheer numbers as they constitute a sizeable part of the fabric of the country should not be taken lightly and can no longer be ignored. A country moving towards 7 tri ..... X X X X Extracts X X X X X X X X Extracts X X X X
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