Gidderbaha Janta Truck Union V. Commissioner of Income Tax, Bathinda and another

ITA/1/2014

AI Insights

The case involves the Gidderbaha Janta Truck Union, which appealed against the order of the Income Tax Appellate Tribunal, Amritsar, concerning the application of a net profit rate on their gross receipts for the assessment year 2006-07. The primary contention was whether the authorities were justified in applying a net profit rate of 3% on the total gross receipts without considering that the collection from members was not income. The Tribunal had reduced the initially applied rate of 6% to 3%, which was contested by the union. The High Court dismissed the appeal, agreeing with the Tribunal's decision and finding no substantial question of law.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 810395 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 11-08-2014
• Assessment Year: misc
• Other Referred Cases: CIT Versus Rohtak Goods Motors 26 ITR 246
• Laws Referred To: Income Tax Act, 1961, Section 260A, Section 143(1), Section 143(2), Section 271(1)(c), Section 5 of the Limitation Act, 1963
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: AMAN BANSAL
• Keywords: Assessment Year 2006-07; Concealing Income; Gross receipts; Inaccurate particulars; Interest Charge; Net profit rate
• Section: 143(2); 143(1); 271(1)(c); 260A

Judgement Text

"ITA No. 1 of 2014 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No. 1 of 2014 (O&M) Date of Decision: 11.8.2014 The Gidderbaha Janta Truck Union, Gidderbaha ....Appellant. Versus Commissioner of Income Tax, Bathinda and another ...Respondents. CORAM:- HON'BLE MR. JUSTICE AJAY KUMAR MITTAL. HON'BLE MR. JUSTICE FATEH DEEP SINGH. PRESENT: Mr. Aman Bansal, Advocate for the appellant. AJAY KUMAR MITTAL, J. 1. Delay of 44 days in refiling the appeal is condoned. 2. This appeal has been filed by the assessee under Section 260A of the Income Tax Act, 1961 (in short “the Act”) against the order dated 18.1.2013 (Annexure A-3) passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as “the Tribunal”) in ITA No. 237/ASR/2010 for the assessment year 2006-07, claiming the following substantial questions of law:- (i) Whether in facts and circumstances of the case, the ld. authority below is justified in applying Net Profit Rate @ 3% on the total gross receipts without considering that the collection from members is not the income? (ii) Whether the Ld. Authorities below were right in GURBACHAN SINGH 2014.10.10 15:03 I attest to the accuracy and authenticity of this document High Court Chandigarh ITA No. 1 of 2014 -2- charging interest? (iii) Whether in facts and circumstances of the case, the action of the authorities below in not considering the law laid in CIT Versus Rohtak Goods Motors 26 ITR 246 is legally sustainable in the eyes of law? (iv) Whether in fact and circumstances of the case, the action of the authorities below, the impugned orders Annexures A-1 to A-3 are legally sustainable in the eyes of law? 3. Briefly stated, the facts necessary for disposal of the instant appeal as narrated therein are that the assessee is a truck operator union and is engaged in the business of transportation and plying of trucks on contract basis. The assessee filed its return of income for the assessment year 2006-07 on 30.10.2006 declaring an income of ` 95,920/-. The return was processed under Section 143(1) of the Act on 20.2.2007 at the same income. A notice under Section 143(2) of the Act was issued to the assessee on 7.3.2007 and served on 28.3.2007. As the assessee was not maintaining proper books of account, the Assessing Officer vide order dated 24.12.2008 (Annexure A-1) assessed the income of the assessee at ` 16,08,854/- by applying the net profit at the rate of 6% on gross receipts of ` 2,68,14,236/-. Penalty proceedings under Section 271(1)(c) of the Act were also initiated against the assessee for concealing and furnishing inaccurate particulars of its income. Feeling aggrieved, the assessee filed an appeal before the Commissioner of Income Tax (Appeals) [for brevity “the CIT(A)”] who vide order dated 31.3.2010 (Annexure A-2) partly allowed the appeal and GURBACHAN SINGH 2014.10.10 15:03 I attest to the accuracy and authenticity of this document High Court Chandigarh ITA No. 1 of 2014 -3- directed the Assessing Officer to apply the net profit at the rate of 3% as against the net profit rate of 6% applied by him. Against the order dated 31.3.2010 (Annexure A-2) passed by the CIT(A), the revenue as well as the assessee filed appeals before the Tribunal. The Tribunal vide order dated 18.1.2013 (Annexure A-3) dismissed both the appeals filed by the revenue as well as the assessee. Hence, the present appeal by the assessee. 4. We have heard learned counsel for the appellant. 5. Learned counsel for the assessee challenged the sustaining of net profit rate of 3% on gross receipts applied by the CIT(A) and the Tribunal. 6. We are not impressed with the submissions of learned counsel for the assessee. The Assessing Officer had deliberated the issue regarding assessee not maintaining proper books of account and keeping details of the record. The applicability of net profit rate in such circumstances cannot be faulted. However, the CIT(A) while partly allowing the appeal of the assessee had reduced the net profit rate from 6% to 3% of its gross receipts. The aforesaid finding of the CIT(A) was affirmed by the Tribunal in appeal holding that the net profit rate @ 3% estimated by the CIT(A) was a correct decision. The net profit rate of 3% on gross receipts in the facts and circumstances applied by the CIT (A) and upheld by the Tribunal cannot be termed to be on higher side by any imagination. Accordingly, no question of law much less a substantial question of law arises in this appeal. Finding no merit in the appeal, the same is hereby dismissed. 7. The appeal was barred by limitation and an application under Section 5 of the Limitation Act, 1963 for condonation of 13 days' GURBACHAN SINGH 2014.10.10 15:03 I attest to the accuracy and authenticity of this document High Court Chandigarh ITA No. 1 of 2014 -4- delay in filing the appeal was filed. Since, the appeal has been dismissed on merits, no further orders are required to be passed in the application for condonation of 13 days' delay in filing the appeal and the same is disposed of as such. (AJAY KUMAR MITTAL) JUDGE August 11, 2014 (FATEH DEEP SINGH) gbs JUDGE GURBACHAN SINGH 2014.10.10 15:03 I attest to the accuracy and authenticity of this document High Court Chandigarh "