9911796707
TMI Blog2024 (11) TMI 244X X X X Extracts X X X X X X X X Extracts X X X X ..... tection of substantial tax evasion and which constitutes a sine qua non for a reward being provided under the 2018 Scheme. Once it is found that the cash deposits, repayment of loans and other cash transactions stood duly reflected in the books of account, were examined in the assessment proceedings and were also scrutinized by the AO, it cannot possibly be said that the information which was proffered by the petitioner was one which was not otherwise available with the respondents. We consequently find ourselves unable to hold in favour of the writ petitioner bearing in mind the indubitable fact which emerges from the record and establishes that the information proffered was already in the knowledge of the respondents and that the material provided by the petitioner did not pertain to undisclosed income. The material furnished by the petitioner also cannot be viewed as having triggered the discovery of a scheme of substantial tax evasion. In fact, the findings as rendered by the Tribunal are clearly to the contrary and dispel the allegation of undisclosed income and tax evasion. - HON'BLE MR. JUSTICE YASHWANT VARMA AND HON'BLE MR. JUSTICE RAVINDER DUDEJA For the Petition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... teral benefit which may arise to revenue in any other case as a result of the information furnished by the informant. In view of the above, it is obvious that you do not fulfil the above criteria(s) mentioned at Para 8(i), 8(vi) and 8(viii) of the Income Tax Informants Rewards Scheme, 2018. Accordingly, the request to allot informant code under Income Tax Rewards Scheme, 2018 is rejected . This issues with the prior approval of the Competent Authority. 3. Although there is no challenge to the aforesaid order formally raised in the writ petition, since the petitioner appeared in person, we do not propose to hold against him on this technicality. 4. As per the case set forth in the writ petition, the petitioner is stated to have provided information to the respondents in terms of a complaint dated 06 September 2013 giving details of various cash deposits and loans received and extended by Delhi State Taxi Operator s Co-operative Thrift and Credit Society Cooperative Society. Although various communications appear to have been exchanged between the parties thereafter, no formal cognizance or action appears to have been taken on the said complaint except for the respondents acknowledgi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , e.g., through letter, e-mail, CD, WhatsApp, SMS, phone, posting in social networking site or publishing letter in newspaper or any other media. 6. The procedure for furnishing information was prescribed in Clause 4 and which is extracted here in below:- 4. Procedure of furnishing information by Informant 4.1 A person who wants to give information of substantial tax evasion in expectation of reward under this scheme may contact the DGIT (Inv.)/PDIT (Inv.)/JDIT (Inv.) concerned. If he appears before DGIT (Inv.)/PDIT (Inv.), they will direct him to appear before JDIT (Inv.) concerned to furnish the information in the prescribed form (Annexure-A). If the jurisdictional JDIT (Inv) considers the information prima facie actionable, the person shall have to submit the information in prescribed format in Annexure - A by appearing in person before the JDIT (Inv), when called. In case of any difficulty, the person desirous of giving specific information may contact the PDIT (Inv) of the area. The decision of PDIT (Inv) will be final in the matter of allotment of Informant Code under this Scheme. 4.2 Where a person gives information to an Income Tax Authority other than DGIT (Inv.)/PDIT (Inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se information/evidence/statement will be liable to be prosecuted for such offence. 7. It appears that upon the promulgation of the 2018 Scheme, the petitioner was informed by the respondents of submitting a formal application and as per the prescribed format. Taking cue from the suggestion of the respondents, the petitioner is stated to have submitted a Form on 06 December 2018. As is apparent from the disclosures made against Serial No. 10 of that Form, the petitioner alleged that the cooperative society in question had received huge cash deposits from members and also extended cash loans in Assessment Years AY 2013-14, 2014-15 and 2015-16. 8. It was further asserted that out of the aforesaid amounts as determined, the respondents had been able to realize a sum of INR 3,74,56,531/- for AY 2013-14 and INR 3,26,57,514/- for AY 2014-15. However, and as is manifest from the order dated 24 February 2021, the respondents have held the petitioner disentitled to the reward in light of the provisions made in sub-clauses (i), (vi) and (viii) of Clause 8 of the 2018 Scheme. Clause 8 of the 2018 Scheme reads as under:- 8. No reward shall be granted to an informant under certain circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urther, the assesse has also repaid the deposit to the members in contravention of provisions of Section 269 T of the Income Tax, 1961. Reference is being sent to Joint Commission of Income Tax, Range -60 for considering the imposition of penalty u/s 271 D and u/s 271 E of the Income Tax Act, 1961. 11. Pursuant to the aforesaid, penalties appear to have been imposed upon the cooperative society. The Joint Commissioner on due consideration of the facts as found levied penalties of INR 16,71,24,134/- and INR 2,01,58,524/- under Sections 271D and 271E of the Act for violation of the provisions of 269SS and 269T respectively. The imposition of these penalties was upheld by the Commissioner of Income Tax (Appeals) CIT(A). 12. Those orders were subjected to challenge by the cooperative society before the Income Tax Appellate Tribunal (Tribunal). The Tribunal while dealing with the validity of the penalties which came to be imposed has ultimately answered that question in favour of the cooperative society on merits as would be evident from the following extracts of its decision and which are reproduced here in below:- 14.7 The assesses submitted before the Ld. CIT(A) that the assessment u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Ld. AR drew our attention to the rationale behind the introduction of section 269SS explained by the board in Circular No. 387 dated 6th July, 1984 reported in (1985) 152 ITR (St) 22. It says that unaccounted cash found in the course of searches carried out by the Income Tax Department is often explained by taxpayers as representing loans taken from or deposits made by various persons. Unaccounted income is also brought into the books of account in the form of such loans and deposits, and the taxpayers are also able to get confirmatory letters from such persons in support of their explanation. With a view to countering this device which enables the taxpayer, to explain away unaccounted cash or unaccounted deposits, the Finance. Act, 1984 inserted a new section 269SS. The argument of the Ld. AR is that the legislative intent was to bring down the non-genuine transactions to prevent the unaccounted income being brought into the books of account in the form of loans/deposits. According to the Ld. AR in the case of the assessee none of the deposits or repayments have been doubted or found to be ingenuine either by the Ld. AO or by the Ld. CIT(A). The activities of the society are gen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f banking as it was providing credit facilities to its members right from inception. It is also an admitted position that the assessee's claim of deduction under section 80P has always been accepted by the department on the basic premise that the assessee has been engaged in carrying on the business of banking or providing credit facilities to its members as stipulated in sub-section 2(a)(i) of section 80P of the Act. It is noteworthy that the provisions of section 269SS and section 269T were brought on the statute book w.e.f. 01.04.1984 which is around 28 years after the assessee society game into existence. But the Department never before the AY 2013-14 presently under consideration raised the issue of violation of the provisions of section 269SS and 269T though assessments were made under section 143(3) of the Act after scrutiny. This gives the bona fide impression that the Department had accepted, by implication that in the facts and peculiar circumstances of the assessee's case, the provisions of section 269SS and 269T were inapplicable to it. Therefore, the rule of consistency should have been followed in AY 2013-14 also which has not been done. Even the CBDT acknowle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed penalty upon the assessee but he failed to appreciate that none of the observations of the Hon'ble Supreme Court apply to the facts of the assessee's case. It is not a case of search operations conducted on the asessee. There is no allegation levelled by the Revenue that false explanation at any point of time has been given by the assessee. Neither any false entry was ever detected by the Revenue in the books of account of the assessee. We are at pains to say that further observations made by the Hon ble Supreme Court in the decision (supra) escaped the attention of the Ld. JCIT/C1T(A). The Hon'ble Supreme Court further observed in para 19 that it is important to note that another provision, namely section 273B of the Act was also incorporated which provides that notwithstanding anything contained in the provisions of section 271D no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provision if he proves that there was reasonable cause for failure to take a loan otherwise than by account payee cheque pr account payee demand draft then the penalty may not be levied. Therefore, undue hardship is very ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at audit report under section 44AB of the Act obtained from an independent Chartered Accountant also confirmed that the provisions of section 269SS and 269T are not applicable to the society. The society is under bonafide belief that the deposits are made/repaid voluntarily by the members and are genuine. The case of the assessee is of mutually aided society for the benefit of its members. The penalty proceedings be kindly dropped. It becomes relevant to note that the aforesaid order of the Tribunal has since been upheld by this Court in Principal Commissioner of Income Tax-20 Delhi vs. M/s Delhi State Taxi Operators Cooperative Thrift Society ITA 247/2024 decided on 01 May 2024. 15. As is apparent from a reading of the above, the cash deposits as well as the aspect of repayment of deposits in purported violation of Sections 269SS and 269T appear to have been clearly taken note of by the AO in the course of the assessment proceedings itself. This leads us to the inevitable conclusion that the cash deposits and repayment thereof were aspects which were duly noticed and stood disclosed in the assessment proceedings. It would consequently be incorrect to hold that the information prov ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
