Case Number: ITA 1457/DEL/2020
Appellant: Ram Singh, Karnal
Respondent: Addl. CIT Range, Karnal
Assessment Year: 2010-11
Case Filed On: 2020-08-05
Order Type: Final Tribunal Order
Date of Order: 2022-08-11
Date of Pronouncement: 2022-08-11
The Income Tax Appellate Tribunal (ITAT) Delhi ‘F’ Bench adjudicated the appeal filed by Ram Singh against the Additional Commissioner of Income Tax (Addl. CIT) Range, Karnal, for the assessment year 2010-11. The appeal challenged the penalty of Rs. 24,15,000 imposed under section 271D of the Income-tax Act, 1961, for accepting cash loans in violation of section 269SS.
This case involved the appellant, Ram Singh, a resident individual from Karnal, Haryana. For the assessment year 2010-11, he did not file a return of income under section 139(1) of the Act, citing that he had no income chargeable to tax except agricultural income. However, based on information that the appellant had invested Rs. 70,75,286 in agricultural land, the Assessing Officer (AO) reopened the assessment under section 147.
The primary grounds of appeal raised by Ram Singh included:
The Tribunal, comprising Shri Saktijit Dey, Judicial Member, and Dr. B.R.R. Kumar, Accountant Member, reviewed the appeal and submissions made by both parties. They focused on the applicability of section 269SS and whether the penalty under section 271D was justified.
The Tribunal noted that section 269SS prohibits accepting loans or deposits of Rs. 20,000 or more in cash. However, the second proviso to section 269SS exempts transactions where both the borrower and lender have only agricultural income and no other income chargeable to tax under the Act.
The Tribunal observed that the appellant had provided evidence, including affidavits from the lenders, to substantiate the genuineness of the loans. The AO had accepted part of the loans but treated Rs. 9,75,000 as unexplained, leading to the penalty imposition.
The Tribunal examined whether the penalty was justified, given that the appellant and lenders had only agricultural income. They cited multiple judicial precedents where penalties were not imposed if the transactions were genuine and within the exemptions provided by the Act.
The ITAT Delhi ‘F’ Bench ruled in favor of the appellant, deleting the penalty imposed under section 271D. They concluded that the appellant’s case fell within the exemptions of the second proviso to section 269SS, as both the appellant and lenders had agricultural income and no other income chargeable to tax.
Order: Penalty under section 271D deleted; appeal allowed.
Date of Order: 2022-08-11
Date of Pronouncement: 2022-08-11
Bench: Delhi ‘F’ Bench
Members: Shri Saktijit Dey, Judicial Member; Dr. B.R.R. Kumar, Accountant Member
Appellant Representative: Dr. Rakesh Gupta, Advocate; Sh. Somil Agarwal, Advocate
Respondent Representative: Ms. Indu Sen, Sr. DR
Case Conclusion: The ITAT deleted the penalty under section 271D, ruling in favor of Ram Singh, based on the applicability of the second proviso to section 269SS.
ITA 1457/DEL/2020: Ram Singh vs. Addl. CIT Range, Karnal – Tax Dispute for AY 2010-11
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