YOGENDRA SINGH SHEKHAWAT, Jaipur V. ITO, Jaipur

ITA 1001/JPR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 2137 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 15-11-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POONAM RAI DCIT DHK

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPAN] YS[KK LNL; ] DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 1001/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 YOGENDRA SINGH SHEKHAWAT, 30, CHAND BIHARI NAGAR, KHATIPURA, JAIPUR. CUKE VS. INCOME TAX OFFICER, WARD-3(1), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: AISPS 3054 N VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI ANIL SHARMA (CA) JKTLO DH VKSJ LS@ REVENUE BY : SMT. POONAM RAI (DCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 10/03/2017 MN?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT : 24/04/2017 VKNS'K@ ORDER PER: BHAGCHAND, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE EMANATES FR OM THE ORDER OF THE LD. CIT(A)-I, JAIPUR DATED 11/08/2016 FOR THE A .Y. 2011-12. THE ONLY ISSUE INVOLVED IN THIS APPEAL IS AGAINST CONFIRMING THE PENALTY OF RS. 1,00,000/- LEVIED U/S 271B OF THE INCOME TAX ACT, 19 61 (IN SHORT THE ACT) FOR NOT GETTING THE BOOKS OF ACCOUNT AUDITED AS REQ UIRED U/S 44AB OF THE ACT. ITA 1001/JP/2016_ YOGENDRA SINGH SHEKHAWAT VS ITO 2 2. WHILE PLEADING ON BEHALF OF THE ASSESSEE, THE LD AR OF THE ASSESSEE HAS SUBMITTED THAT THE ASSESSEE IS A RETAIL SUPPLIE R OF MILK AND NOT MAINTAINING BOOKS OF ACCOUNT. THE RETURN OF INCOME F ILED U/S 44AB OF THE ACT. THE ASSESSING OFFICER OBSERVED THAT THE GROSS R ECEIPTS OF THE ASSESSEE WERE RS. 3,11,33,296/-, WHICH EXCEEDS LIMIT FOR MAINTAINING BOOKS OF ACCOUNT AND GET THEM AUDITED U/S 44AB OF T HE ACT. THE ASSESSING OFFICER INITIATED THE PENALTY U/S 271A AN D 271B OF THE ACT FOR NOT MAINTAINING BOOKS OF ACCOUNT AND NOT GETTING TH EM AUDITED AS PER PROVISIONS OF SECTION 44AA AND 44AB OF THE ACT RESP ECTIVELY. THE ASSESSING OFFICER LEVIED THE PENALTY U/S 271A OF TH E ACT FOR NOT MAINTAINING THE BOOKS OF ACCOUNT VIDE ORDER DATED 2 9/5/2014. THE COPY OF THE ORDER WAS SUBMITTED AND THEREAFTER THE ASSESS ING OFFICER ALSO LEVIED THE PENALTY FOR FAILURE TO GET BOOKS OF ACCO UNT AUDITED AS REQUIRED U/S 44AB OF THE ACT OF RS. 1.00 LAC ON 29/5/2014. TH E LD AR SUBMITTED THAT ONCE THE ASSESSING OFFICER HAS CONCLUDED THAT THE ASSESSEE HAS NOT MAINTAINING BOOKS OF ACCOUNT THEN THERE CANNOT BE A QUESTION OF GETTING THEM AUDITED. THE LD AR RELIED ON THE DECISION OF T HE GAUHATI HIGH COURT IN THE CASE OF SURAJMAL PARASRAM TODI VS. CIT 222 ITR 691, WHEREIN THE HON'BLE HIGH COURT HAS DEALT SUCH SITUATION AND HEL D THAT WHERE NO BOOKS OF ACCOUNT WERE MAINTAINING, THE LEVY OF PENALTY U/S 271B WAS HELD ITA 1001/JP/2016_ YOGENDRA SINGH SHEKHAWAT VS ITO 3 ERRONEOUS. THE LD AR RELIED ON THE DECISION OF HONB LE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. BISAULI TRACTORS (2008) 299 ITR 219 WHEREIN SIMILAR VIEW HAS BEEN AFFIRMED. THE LD AR RELIED ON T HE DECISION OF HONBLE PUNE BENCH OF ITAT IN THE CASE OF RAM PRAKAS H C. PURI VS. ACIT 77 ITD 210 WHEREIN BY FOLLOWING THE DECISION OF HONB LE GAUHATI HIGH COURT IN THE CASE SURAJMAL PARASRAM TODI VS. CIT (SU PRA), THE PENALTY LEVIED U/S 271B WAS DELETED. THE LD AR DISTINGUISHED THE CASE LAW RELIED UPON BY THE LD. CIT(A) IN THE CASE OF S.J. AGARWAL & CO. VS. ITO (2008) 114 ITD 27 (PUNE). 3. ON THE OTHER HAND, THE LD DR HAS RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 4. I HAVE HEARD BOTH THE SIDES ON THIS ISSUE. THE AS SESSING OFFICER LEVIED THE PENALTY U/S 271A OF THE ACT FOR THE REAS ON THAT DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTIC ED THAT THE ASSESSEE HAS FAILED TO MAINTAIN HIS BOOKS OF ACCOUNT FOR THE YEAR UNDER CONSIDERATION AS REQUIRED BY SECTION 44AA OF THE AC T ON 29/05/2014. ON THE SAME DATE, THE SAME ASSESSING OFFICER ALSO LEVI ED THE PENALTY U/S 271B OF THE ACT FOR THE REASON THAT DURING THE COUR SE OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT THE ASSESSEE HAS FA ILED TO GET HIS BOOKS OF ACCOUNT AUDITED DURING THE YEAR UNDER CONSIDERAT ION AS REQUIRED BY ITA 1001/JP/2016_ YOGENDRA SINGH SHEKHAWAT VS ITO 4 SECTION 44AB OF THE ACT. THE LD. CIT(A) CONFIRMED THE PENALTY BY RELYING ON THE DECISION OF S.J. AGARWAL & CO. VS. ITO (SUPRA ) WHEREIN THE ASSESSEE FILED TRADING ACCOUNT AND P&L ACCOUNT SHOWI NG FIGURES AND DECIMALS WHILE IN ASSESSEES CASE RETURN WAS FILED U/ S 44AB OF THE ACT AND NO TRADING AND P&L ACCOUNT AND BALANCE SHEET WAS FIL ED. FURTHER IN THE CASE OF S.J. AGARWAL & CO. VS. ITO (SUPRA), THE ASSES SING OFFICER GAVE A FINDING THAT THE ASSESSEE WAS MAINTAINING BOOKS OF A CCOUNT, WHICH WERE NOT GOT AUDITED AND IN THAT CASE NO PENALTY U/S 271 A FOR NOT MAINTAINING THE BOOKS OF ACCOUNT WERE LEVIED. THUS, THE CASE LAW R ELIED BY THE LD CIT(A) IS DISTINGUISHABLE ON THE FACTS ITSELF. THEREF ORE, THE RELIANCE OF THE LD. CIT(A) FOR SUSTAINING THE PENALTY IS NOT JUSTIFI ED. THE HONBLE GAUHATI HIGH COURT SURAJMAL PARASRAM TODI VS. CIT (SUPRA) DE ALT WITH THE SIMILAR SITUATION HAS HELD AS UNDER:- SECTION 44AA OF THE INCOME-TAX ACT, 1961, IMPOSES A DUTY ON THE ASSESSEE TO MAINTAIN BOOKS OF ACCOUNT AND ON FAILURE TO DO SO THE ASSESSEE SHALL BE LIABLE TO BE PENAL ISED UNDER SECTION 271A OF THE ACT. EVEN AFTER MAINTENANCE O F BOOKS OF ACCOUNT THE OBLIGATION OF THE ASSESSEE DOES NOT COME TO AN END. HE IS REQUIRED TO DO SOMETHING MORE, I. E., BY GETTING THE BOOKS OF ACCOUNT AUDITED BY AN ACCOUNTAN T. BUT WHEN A PERSON COMMITS THE OFFENCE OF NOT MAINTAININ G THE BOOKS OF ACCOUNT AS CONTEMPLATED BY SECTION 44AA THE OFFENCE IS COMPLETE. AFTER THAT THERE CAN BE NO POSSIBILI TY OF ANY OFFENCE AS CONTEMPLATED BY SECTION 44AB AND, THEREFORE, PENALTY CANNOT BE IMPOSED UNDER SECTION 271B OF THE ACT. ITA 1001/JP/2016_ YOGENDRA SINGH SHEKHAWAT VS ITO 5 SIMILARLY IN THE CASE OF CIT VS. BISAULI TRACTORS (SU PRA), THE HONBLE ALLAHABAD HIGH COURT HAS HELD AS UNDER:- PENALTY PROVISION IN A TAXING STATUTE HAS TO BE STRIC TLY CONSTRUED. PENALTY IS EXIGIBLE ONLY WHERE A PERSON FALL S WITHIN THE FOUR CORNERS OF THE PENAL PROVISIONS, OTHER WISE NOT. SEPARATE PENALTY HAS BEEN PROVIDED FOR NON-MAINTENAN CE OF ACCOUNTS, I.E., UNDER SECTION 271A OF THE INCOME-TAX ACT, 1961, AND FOR NOT GETTING THE ACCOUNTS AUDITED AN D NOT FURNISHING THE AUDIT REPORT, I.E., UNDER SECTION 2 71B . IF A PERSON HAS NOT MAINTAINED ACCOUNT BOOKS OR ANY ACCOUNTS THE QUESTION OF AUDIT DOES NOT ARISE. IN SUCH AN EVENT THE IMPOSITION OF PENALTY UNDER THE PROVISION CONTAINED IN SECTION 271A FOR ALLEGED NON-COMPLIANCE WIT H SECTION 44AA MAY ARISE BUT THE PROVISIONS OF SECTION 44AB DO NOT GET VIOLATED IN A CASE WHERE ACCOUNTS HAVE NOT BEEN MAINTAINED AT ALL AND THEREFORE THE PENAL PROV ISIONS OF SECTION 271B OF THE ACT WOULD NOT APPLY. CONSIDERING THE RATIO LAID DOWN BY THE HON'BLE HIGH COURTS AND THE FACTS OF THE CASE, I DIRECT TO DELETE THE PENALTY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON 24/04/2017. SD/- HKKXPAN (BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 24 TH APRIL, 2017 *RANJAN VKNS'K DH IZFRFYFI VXZSFKR @ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ @ THE APPELLANT- SHRI YOGENDRA SINGH SHEKHAWAT, JAIPUR. ITA 1001/JP/2016_ YOGENDRA SINGH SHEKHAWAT VS ITO 6 2. IZR;FKHZ @ THE RESPONDENT- THE ITO, WARD-3(1), JAIPUR. 3. VK;DJ VK;QDR @ CIT 4. VK;DJ VK;QDRVIHY @ THE CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ @ DR, ITAT, JAIPUR 6. XKMZ QKBZY @ GUARD FILE (ITA NO. 1001/JP/2016) VKNS'KKUQLKJ @ BY ORDER, LGK;D IATHDKJ @ ASST. REGISTRAR