BHAVESHKUMAR SHANTILAL JANI,AHMEDABAD V. .THE INCOME TAX OFFICER, WARD-6(1)(1), AHMEDABAD

ITA 1321/AHD/2024

AI Insights

The case involves Bhaveshkumar Shantilal Jani, the appellant, contesting a penalty imposed by the Income Tax Officer (ITO) for alleged discrepancies in stock and other financial particulars reported in the Assessment Year 2012-13. The ITO had made additions to the assessee's income and initiated penalty proceedings under Section 271(1)(c) of the Income Tax Act, 1961, which were partly upheld by the CIT(A). The main contention in the appeal was the incorrect application of penalties related to the stock difference and the lack of specific mention of the default in the penalty notice. The Tribunal found that the penalty was not warranted as the assessee had not concealed any income or furnished inaccurate particulars intentionally.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 34063 (ITAT-AHMEDABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Other Referred Cases: CIT & Another vs. Manjunatha Cotton & Ginning Factory, Dilip N. Shroff vs. JCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHARNIDAS V.S.
• Assessee Lawyers: P. F. JAIN
• Keywords: TDS
• Section: 143(3); 271(1)(c); 274; 40a(ia)

Judgement Text

"ITA No.1321/Ahd/2024 A.Y. 2012-13 Bhaveshkumar Shantilal Jani vs. ITO Page 1 of 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “SMC” BENCH, AHMEDABAD BEFORE DR. BRR KUMAR, VICE PRESIDENT & Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.1321/Ahd/2024 Assessment Year: 2012-13 Bhaveshkumar Shantilal Jani C/o. Paras F. Jain & Co., 102, Dwarkesh Complex, Opp. Patel Vas, Mithakhali Gam, Mithakhali, Ahmedabad – 380 006. [PAN – AXLPP 0545 M] Vs. The Income Tax Officer, Ward – 6(1)(1), Ahmedabad – 380 015. (Appellant) (Respondent) Assessee by Shri P.F. Jain, AR Revenue by Shri Dharnidas V.S., Sr. DR Date of Hearing 21.11.2024 Date of Pronouncement 19.12.2024 O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER: This appeal is filed by the Assessee against order dated 26.06.2024 passed by the CIT(A), National Faceless Appeal Centre (NFAC), Delhi for the Assessment Year 2012-13. 2. The assessee has raised the following grounds of appeal :- “1. The learned CIT(A) has erred in law and facts in upholding penalty on the addition of Rs.1,81,725/- being difference in stock for alleged furnishing inaccurate particulars and concealment of income in as much as that there is no such default. 2. He has erred in upholding the penalty partly without considering the facts that submission dated 07.03.2020 in response to penalty notice has not been considered by the A.O. in as much as that there is no malafide intention for evading tax liability. ITA No.1321/Ahd/2024 A.Y. 2012-13 Bhaveshkumar Shantilal Jani vs. ITO Page 2 of 3 3. He has erred in upholding penalty in part in as much as that in the notice u/s.271 r.w.s. 274 there is no mention of default. 4. On the facts no such penalty ought to have been levied.” 3. Assessment under Section 143(3) of the Income Tax Act, 1961 was passed on 27.03.2015 making addition of Rs.22,55,897/- in respect of Stock Difference of Rs.1,81,725/-, Lumpsum addition of 20% of balance of Sundry Creditors amounting to Rs.19,21,522/- and non-deduction of TDS under Section 40a(ia) of the Act amounting to Rs.1,52,650/-. In respect of the said additions, the Assessing Officer initiated penal proceedings under Section 271(1)(c) of the Act. Notice under Section 274 read with Section 271(1)(c) of the Act was issued on 27.03.2015. The assessee has not filed any submissions before the Assessing Officer and, therefore, the Assessing Officer levied penalty of Rs.60,348/- under Section 271(1)(c) of the Act. 4. Being aggrieved by the Penalty Order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee. 5. The Ld. AR submitted that the CIT(A) was not right in upholding the penalty to the extent of addition of Rs.1,81,725/- being difference in stock. The assessee inadvertently has claimed credit of opening stock of Rs.1,81,725/- but there was no discrepancy found in the books of account by the Assessing Officer and thus question of concealment of particulars of income or furnishing of inaccurate particulars of income does not arise. The Ld. AR further submitted that the Assessing Officer levied penalty vide order dated 23.03.2020 and mentioned that the initiation of penalty proceedings for furnishing of inaccurate particulars and concealment of income for all the issues including that of addition of 20% of balance of Sundry Creditors, stock difference and non-deduction of TDS. But, in the notice, there was no mention regarding the particular limb of Section 271(1)(c) of the Act. The Ld. AR relied upon the decision of Hon’ble Apex Court in the case of CIT & Another vs. Manjunatha Cotton & Ginning Factory, 291 ITR 519(SC) and also relied upon the decision of Dilip N. Shroff vs. JCIT, 6 SCC 329. The Ld. AR further submitted that the assessee has difference in closing stock is not justifiable as the assessee has admittedly submitted that the Audited Accounts has given proper details related to the opening stock and closing ITA No.1321/Ahd/2024 A.Y. 2012-13 Bhaveshkumar Shantilal Jani vs. ITO Page 3 of 3 stock details after taking into consideration the purchase register. Thus, there was no case of the Department for furnishing inaccurate particulars or that of concealment of income. 6. The Ld. DR relied upon the Assessment Order and the order of the CIT(A). 7. We have heard both the parties and perused all the relevant material available on record. It is pertinent to note that notice under Section 274 read with Section 271(1)(c) of the Act dated 27.03,2015 has not expressed under which limb the penalty is initiated under Section 271(1)(c) of the Act. The decision of Hon’ble Apex Court in the case of Manjunatha Cotton & Ginning Factory (supra) is applicable in the present case. Besides this, the assessee has rightly submitted the closing stock details as well as the stock difference was also reflected in the audited accounts and there was no case built up by the Revenue that the assessee has filed inaccurate particulars of income or concealment of income. Thus, the Assessing Officer as well as the CIT(A) was not right in imposing the penalty. 8. In the result, appeal of the assessee is allowed. Order pronounced in the open Court on this 19th December, 2024. Sd/- Sd/- (DR. BRR KUMAR) (SUCHITRA KAMBLE) Vice President Judicial Member Ahmedabad, the 19th December, 2024 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File By order TRUE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad "