M/s. D.L. Roadlines, Baroda V. The ACIT., Circle-5, Baroda

ITA 1011/AHD/2006

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0385 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 5 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 14-10-2009
• Assessment Year: 2001-2002
• Appeal Filed On: 25-04-2006
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR JAYANT JHAVERI
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER DATE OF HEARING: 14.10.2009 DRAFTED ON: 15.10. 09 ITA NO.1011/AHD/2006 ASSESSMENT YEAR : 2001-2002 D.L.ROADLINES, O-28, MAHALAXMI COMPLEX, KARELIBAUG, BARODA. VS. ACIT CIRCLE-5, AAYKAR BHAVAN, RACE COURSE CIRCLE, BARODA. PAN/GIR NO. : AACFD5118N (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI TUSHAR HEMANI RESPONDENT BY: SHRI DR. JAYANT JHAVERI SR. D.R. O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF THE LD.CIT(APPEALS)-V, BARODA, DATED 08.02.2006. 2. THE SOLE GROUND OF THE APPEAL TAKEN BY THE ASSE SSEE IN THIS APPEAL IS THAT THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ER RED IN FACTS AND IN LAW IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN L EVYING PENALTY OF RS.1,58,674/- UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE IS ENGAGED IN TRANSPORTING BUSINESS. DURING THE COU RSE OF THE ASSESSMENT, THE ASSESSING OFFICER OBSERVED THAT THE EXPENSE CLAIMED IN THE MONTH OF JANUARY ITA NO.1011/AHD /2006 M/S.D.L.ROADLINES, ASST.YEAR -2001-2002 - 2 - 2001 EXCEEDS THE CORRESPONDING TRANSPORTING RECEIPT S OF THE ASSESSEE. HE THEREFORE, REJECTED THE BOOKS OF ACCOUNT OF THE ASS ESSEE AND ESTIMATED ITS INCOME @ 8% OF RECEIPTS, WHICH WORKED OUT TO RS.27,73,333/ - IN PLACE OF RS.10,33,263/- DISCLOSED BY THE ASSESSEE. IN APPEAL, THERE AGAINST THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) REDUCED THE TOTAL INCOME OF TH E ASSESSEE TO RS.14,34,927/- AND TRIBUNAL FURTHER REDUCED THIS TOTAL INCOME OF T HE ASSESSEE TO RS.12,33,263/-. THUS, IN QUANTUM APPEAL, ADDITION OF RS.2 LACS WAS SUSTAINED BY THE TRIBUNAL. THE ASSESSING OFFICER LEVIED PENALTY ON THE BASIS O F INCOME OF RS.14,24,927/-, ESTIMATED BY LEARNED COMMISSIONER OF INCOME TAX (AP PEALS) AND LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE SAID LEVY OF PENALTY. 4. THE ASSESSEE CHALLENGED THE VALIDITY OF THE AFOR ESAID LEVY OF PENALTY MAINLY ON TWO GROUNDS. FIRSTLY LEVY OF PENALTY WAS BAD IN LAW AND SECONDLY NO CONCEALMENT OF INCOME WAS FOUND DURING THE COURSE O F ASSESSMENT. WE FIND THAT PENALTY UNDER SECTION 271(1)(C) WAS IMPOSED BY THE ASSESSING OFFICER BY OBSERVING AS UNDER: ON THE BASIS OF ABOVE DISCUSSION, IT IS CONSTRUED THAT THE ASSESSEE HAS CONCEALED ITS INCOME AND FURNISHED INACCURATE PARTI CULARS OF ITS INCOME WHICH ATTRACT THE PROVISIONS OF SECTION 271(1)(C) OF THE I.T.ACT AND I AM SATISFIED THAT IT IS A FIT CASE FOR LEVY OF PENALTY. THUS, WE FIND THAT THE ASSESSING OFFICER HAS NOT BE EN ABLE TO REACH TO THE CONCLUSION THAT WHETHER THE ASSESSEE HAS CONCEALED THE INCOME OR ASSESSEE WAS GUILTY OF FURNISHING INACCURATE PARTICULARS OF INCO ME. THE HON'BLE HIGH COURT OF GUJARAT IN THE CASE OF NEW SORATHIA ENGINEERING CO. VS. COMMISSIONER OF INCOME TAX (2006) 282 ITR 642 (GUJ) HAS HELD AS UND ER: 11. IN THE CASE OF CIT VS. MANU ENGINEERING WORKS ( SUPRA) THIS IS WHAT IS LAID DOWN BY THIS COURT AT PAGE NO. 310 OF THE REPORTS : '.. WE FIND FROM THE ORDER ITA NO.1011/AHD /2006 M/S.D.L.ROADLINES, ASST.YEAR -2001-2002 - 3 - OF THE IAC, IN THE PENALTY PROCEEDINGS, THAT IS, TH E FINAL CONCLUSION AS EXPRESSED IN PARA 4 OF THE ORDER : 'I AM OF THE OPINION THAT IT WILL HAVE TO BE SAID THAT THE ASSESSEE HAD CONCEALED ITS INCOME AND/OR THAT IT HA D FURNISHED INACCURATE PARTICULARS OF SUCH INCOME'. NOW, THE LANGUAGE OF ' AND/OR' MAY BE PROPER IN ISSUING A NOTICE AS TO PENALTY ORDER OR FRAMING OF CHARGE IN A CRIMINAL CASE OR A QUASI CRIMINAL CASE, BUT IT WAS INCUMBENT UPON THE IAC TO COME TO A POSITIVE FINDING AS TO WHETHER THERE WAS CONCEALMENT OF INCO ME BY THE ASSESSEE OR WHETHER ANY INACCURATE PARTICULARS OF SUCH INCOME H AD BEEN FURNISHED BY THE ASSESSEE. NO SUCH CLEAR-CUT FINDING WAS REACHED BY THE IAC AND, ON THAT GROUND ALONE, THE ORDER OF PENALTY PASSED BY THE IAC WAS L IABLE TO BE STRUCK DOWN.' THE PENALTY ORDER AND THE ORDER OF CIT(A) SHOW THAT NO CLEAR-CUT FINDING HAS BEEN REACHED. THE TRIBUNAL HAS FAILED TO APPRECIATE THIS LEGAL ISSUE. APPLYING THE RATIO TO THE FACTS OF THE CASE IT IS APPARENT THAT THE ORDER OF PENALTY CANNOT BE SUSTAINED AND THE TRIBUNAL COULD NOT HAVE SUSTAINED THE SAME. THE TRIBUNAL HAVING FAILED TO TAKE INTO CONSIDERATION AND DEAL W ITH THE DECISION OF THE JURISDICTIONAL HIGH COURT IT WOULD CONSTITUTE AN ER ROR IN LAW WHICH GOES TO THE VERY BASIS OF THE CONTROVERSY INVOLVED AND HENCE, T HE IMPUGNED ORDER OF THE TRIBUNAL CANNOT BE UPHELD. 5. IN VIEW OF THE ABOVE DECISION OF THE JURISDICTIO NAL HIGH COURT, IN OUR CONSIDERED OPINION, LEVY OF PENALTY IN THE INSTANT CASE WAS BAD IN LAW AND THEREFORE, UNSUSTAINABLE. WE FURTHER, OBSERVE THAT IN THE INSTANT CASE, NO POSITIVE MATERIAL COULD BE BROUGHT ON RECORD BY THE REVENUE TO SHOW THAT THE ASSESSEE HAS ACTUALLY INFLATED ANY EXPENSE. THE EXPLANATION OF T HE ASSESSEE IN RESPECT OF THE OBSERVATION OF THE ASSESSING OFFICER WAS THAT AS TR ANSPORTING CONTRACT WAS ACCEPTED EARLIER AND RATES WERE FIXED, THE ASSESSEE WAS REQUIRED TO CARRY OUT THE TRANSPORTING WORK ON THE OLD RATE EVEN THOUGH, ITS EXPENSES INCREASED DUE TO INCREASE IN THE PRICE OF FUEL ETC. THE ABOVE EXPLAN ATION FURNISHED BY THE ASSESSEE AS REASON FOR EXPENSES EXCEEDING THE RECEIPT WAS AL SO NOT FOUND FALSE BY THE REVENUE. IN THE ABOVE CIRCUMSTANCES, WE FOUND THAT IN THE INSTANT CASE, THE ADDITION TO THE INCOME DISCLOSED BY THE ASSESSEE WA S MADE ON THE GROUND THAT THE EXPENSES CLAIMED BY THE ASSESSEE WAS NOT SUBSTANTIA TED TO THE SATISFACTION OF THE ASSESSING AUTHORITY AND NOT ON THE GROUND THAT ANY EXPENSES CLAIMED BY THE ASSESSEE WAS FOUND TO BE BOGUS OR INFLATED. ONE SHO ULD APPRECIATE THAT THERE IS A DIFFERENCE BETWEEN UNPROVED AND DISPROVED. THE PRES ENT CASE IS NOT THE CASE OF DISPROVED AND THEREFORE, IN OUR CONSIDERED OPINION PENALTY UNDER SECTION 271(1)(C) IS UNSUSTAINABLE ON MERIT ALSO. WE THER EFORE, DELETE THE LEVY OF PENALTY OF RS.1,58,674/- UNDER SECTION 271(1)(C) OF THE INC OME TAX ACT, 1961. ITA NO.1011/AHD /2006 M/S.D.L.ROADLINES, ASST.YEAR -2001-2002 - 4 - 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE ALLOWE D. ORDER PRONOUNCED IN THE COURT AT THE CLOSE OF THE H EARING IN THE PRESENCE OF THE PARTIES ON 14/10/2009. SD/- SD/- ( MAHAVIR SINGH) ( N.S. SAINI ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 14/10/2009 PARAS# COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-V, BARODA. 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR), ITAT, AHMEDABAD