2002-VIL-381-DEL-DT

Equivalent Citation: [2004] 266 ITR 255, 180 CTR 489, 135 TAXMANN 100

DELHI HIGH COURT

Date: 26.11.2002

COMMISSIONER OF INCOME-TAX

Vs

PARMA NAND.

BENCH

Judge(s)  : D. K. JAIN., SHARDA AGGARWAL.

JUDGMENT

This appeal under section 260A of the Income-tax Act, 1961 (for short the "Act"), by the Revenue, is directed against the order, dated May 6, 2002, passed by the Income-tax Appellate Tribunal, Delhi Bench "D", New Delhi, in I.T.A. No. 4048/Del of 1996, for the assessment year 1990-91. By the impugned order the Tribunal has upheld the order passed by the Commissioner of Income-tax (Appeals), whereby penalty levied on the respondent/assessee under section 2nD of the Act was deleted.

While affirming the said order and holding that the assessee has been able to prove that there was a reasonable cause for receiving the money in cash, the Tribunal has held as follows:

"Further, we find that there was a reasonable cause because the assessee was going to be directly benefited if the cheques issued to Hindustan Engg. Products are cleared in time, as there was a discount at 2 per cent. for cash payment against the bills. The cheques issued by the assessee were dated April 4, 1989; September 14, 1989; December 21, 1989; January 16, 1990, and February 20, 1990, and the advances, which were received by the assessee in cash, were on the dates nearing the dates of issue of the abovesaid cheques. The payments were received on April 5, 1989; September 15, 1989; December 22, 1989; January 17, 1990 and February 21, 1990, respectively. The loans were taken by the assessee just to clear these cheques issued by it, as there was no sufficient bank balance with the assessee. The amounts were prepaid through account payee cheques, this is an undisputed fact. We further noted that bona fide intention of the assessee has already been proved because the Assessing Officer has made additions under section 68 by rejecting the explanation of the assessee in regard to the genuineness of these loans. The Commissioner of Income-tax (Appeals) confirmed the additions.

However, all these additions were deleted by the Tribunal vide its order dated March 10, 1995, in I.T.A. No. 1365/Dellhi of 1994 for the assessment year 1990-91, wherein it was held that the basis adopted by the Revenue in making the impugned additions, i.e., violation of the provisions of section 26955 is Wholly unwarranted. Accordingly, the impugned additions were deleted. This, in our considered view, is a default of venial nature and the decisions of the apex court in the case of Hindustan Steel Ltd. v. State of Orissa [1972] 83 ITR 26; [1970] 25 STC 211 is squarely applicable on the facts of the present case. Therefore, in view of these facts and circumstances, we hold that penalty levied and confirmed by the Commissioner of Income-tax (Appeals) was not justified. Accordingly, we delete the same."

The afore-extracted portion of the Tribunal's order shows that the conclusion of the Tribunal that there was a reasonable cause in not strictly complying with the provisions of section 26955 of the Act is based on relevant factors. We find it difficult to hold that the view taken by the Tribunal is either perverse or so irrational that no reasonable person, on the given facts, would have come to the same conclusion. The findings recorded by the Tribunal are essentially factual giving rise to no question of law much less a substantial question of law.

The appeal is accordingly dismissed.

 

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