Director of Income Tax v. Maharaji Education Trust

.e ls $-+*xN TIIT] HIGH COURT OF DI'LHI AT Ntr],W DELHI rTA 53612012 DIRI.JC'I'OIT OF INCOM]I'I'AX ..... Appcllant 'I'hrough: Mr. Abhishek Maratha, Sr. Stancling Cor,rnsel. vcrsus MNIIAI{N.TI I il)UCN'fION'IRI]S'T ..... Itcspondcnt I'hrough: Mr. Vivck Singh, Advocatc. COIIAM: IION'I}I,}.] MR. JUSTICT] S. I{AVINDITA I}IIA.I. IION'I}I,E MIT. JUSTICE R.V.BASWAR ORDT]R "1,

31.10.2012 l. 'l'hc clucstiol ol' law sought to bc urgcd on bchall'of thc lLcvenuc in this appcal agairrst tlrc'l'ribunal,s order datcd 2l.ll.20ll in I'l'A 4209lDcll20ll is as to the lcgality and corrcctncss 6f its order, upholding the Appcllate Commissioncr's ordcr rvhich dircctcd tlc setting asidc of thc penalty imposcd ttpon thc assessec rinder Scctiot"t271I:'in l.cspcct ol.thc payincnt madc to thc tunc ol'Rs.75 Lakhs in cash.

¶2'l'hc bricf lacts of the casc arc that thc asscsscc - a trust - rvas laced rvith adverse orclcrs and lrad to satisfy dccrec of the Debt f{ccovcry 'l'ritrunal (t)l{l). At that stagc, the 'l'rustcc t)r. p. Malialingarn arrangccl thc recprisite funds lrom atrother conccrn i.c. Ayush Comrnercial privatc Lirnited through trvo chcques/clemand dralts i.c. of I{s.50 Lakhs and I{s.25 Lakhs. 'l'his savcd the trust's propcrty and assets fi'om cxcct'ttiott and other pr.cccclings clircctcd by thc DKI': an adverse decrcc stood satisficd. 'l'hc asscssec rcpaid thc autclr.rnt tcl thc Ayush Clourrnercial Privatc Limitcd lrotn r'vhotrl the amounts rvcre o5tai1c6 by its trLrstec i1 cash. 'l'hc Asscssing Officcr irnposcd ponalty, rcasoning that Certify that the digital and physical file have been compared and the digital data is as per the physical file and no page is missing. -t .J tlrc mandatory provision of Section 269'l'havc bcen violatcd on accourrt of the payments made - in discharge of thc debt - in casl.r and dircctcd fecovcry of pcnalty atnount under Scction 2711:,.'l'hc assessce's appcdl to the CIl'(n) succceded; thc Rcvcnuc's appeal to thc l'l'A'l'rvas dismisscd try the impr-rgned ordcr.

¶3lt is argucd o1 behalf ol'the Revcnue that thc rccords cleally cstablish facially a violatiorr of the nrandatory provision of Scction 269'l'. It is also r.rrged that there rvas .othing on the record to suggest that in fact the payrtrent rcccivcd was divcrted for the ultinrats objcctivc i.c. to satisfy the DI{T's decree.

¶4Ilot6 the CI'l' (A) as well as thc 'fribunal have, aftcr corrsidering thc rccords, particularly rroticcd that thc paynlent had indccd been madc to the DI{f frorn the funds bon-orvcd arrd that tlrc trusl was constraincd to pay back thc amount to the ultirnate crcditor i.c. Ayush Comrrcrcial Privatc Limitcd in cash in order to avoid an rrgly situation. 'l'hc'l'riburral fLrrt|er rcasoned rvhile rcjccting thc I{cvcnue's appeal as follorvs: ,,6. We hcrye heard the rivril contention,v in light of tlte materid produced attcl precetlutt relietl ttpon. Wefintt that Ltl. Comntis:siortcr of hcortte T'ax (Appeals) 'has gitten a fincliig thctt prottisions of ,section 2738 cu'e crtfi'ucted. In thi's cctsae there wus ,unrurrnblu camse for the failtn'e ttt contply vith the prottisions in this regcu.cl. In this case ILs.75 Lac,y tpa.s aclt,tnrccct by Dr. P. fuIahulingtun to Mahcn'aji Iiihrccuionttl T'rzN vide DD ancl checlue. ll'he abot,e mentioned cuttount wos receive4 back in luntp xtm f'om Maharuji litltrccttional 'l\'ttst on 28.6.2006' The umormt receivecl back tvcts receivecl in cash ctntl puit{ to Ayush Commercial (P) Ltcl. fi"om thom he has rcrisecl the ftmcl.s tentltorarillt for the puyment to the DRT' on ichalf of the n.ust. The ptrytnent vas rrtucle to Altu,sh Commercictl (P) I'tcl-ttrnotmlitrg to ll"s' 75 lctcs oi zA'O'zOO6 b)' crccount lta)tee clteclte drawn on the Bank of tiuiusthun Ltd. As Ltl. Commis.vioner of Inconrc'I'ux (Appeals) has rightlt ob:sen ecl thctt there lvos t'to elemenl of penulty is involved. The amount vcts given by Dr. Ir. Mchctlingam fut DD or cheqtrc, vhich wa.s rehrrned on

28.6.2006 ittmeclicttely by u cireqte lxrynrcnt of lls.75 lacsvct:s made in the name of Ayush Comntcrcicil (f1 t,ta.^ I'hi cop1, of cheqzrc isstrcd to Alntslt Comnrcrcia-l (P) Ltd. t,o,y also stilt'niittecl. (Jnder ihe cit'atm:stances, r'e agree with the finding of the Ld. Cotttnt1y5iotter of htcome 'I'ax (Altpeal,s) tltat lhe ctr,se i's covered ilS 2738 of rlte I7' Acr. Accoriingllt, tve clo not fintl uny infirmity in lhe orcler of the Ld' (lommi,s:sioner of Income ['ax (Appeals) attcl ltence, we uphold the sume'

¶7hr the result, the appeulfiletl by lhe Revenue,stands di'smis'sed."

¶5'l'his Courl has considcrcd thc submissions of thc Revcnuc arrd is ol'thc opinion t I \ '<'-r' tliat thc colcLll'rcl'lt view of the autlrorities below irrolr-rdirig the 'l'ribrrnal cannot be clraractcrizcd as unrcasonablc lraving rcgard 1o the facts and circutrrstanccs established.

¶6In this viqv of thc mattcr, no substantial qucstion of larv is ariscs. Thc appeal is accord ingly disrnisscd. S. RAVINDIIA B}IAT, J lu *, .-R.V.I|ASWAII, J OCTOIlI,llt 3I,2012 /vks/ -