Shri Jiteshkumar D. Bharad, Junagadh, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-4(4), RAJKOT-GUJARAT

ITA 102/RJT/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 2407 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 10 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 03-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C S ANJARIA
• Keywords: Reasonable cause; Ignorance of law
• Section: 273B

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT [ CONDUCTED THROUGH E-COURT AT AHMEDABAD ] , , ! BEFORE SHRI PRAMOD KUMAR, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ./ I.T.A. NO.102/RJT/2014 ( / ASSESSMENT YEAR : 2009-10) SHRI JITESHKUMAR D.BHARAD GURU KRUPA PLOT NO.30, VANTHALI ROAD NAGRIK BANK SOCIETY JUNAGADH / VS. THE INCOME TAX OFFICER WARD-4(4) RAJKOT & ./ ./ PAN/GIR NO. ABUPB 3787 G ( &( / APPELLANT ) .. ( )&( / RESPONDENT ) &( * / APPELLANT BY : SHRI KALPESH DOSHI, C.A. )&( + * / RESPONDENT BY : SHRI C.S. ANJARIA, SR.DR ,-. + / DATE OF HEARING 11/12/2015 /0 + / DATE OF PRONOUNCEMENT 01/01/2016 / O R D E R PER BENCH: THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER OF THE LD.COMMISSIONER OF INCOME TAX(APPEALS)-III, RAJKOT [CIT(A) IN SHORT] DATED 16/01/2014 PERTAINING TO ASSESSMENT Y EAR (AY) 2009-10. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF AP PEAL:- 1. THAT, THE LEARNED CIT(A) HAS WRONGLY CONFIRMED PEN ALTY OF RS.25,000/- U/S.271A OF THE I.T.ACT, 1961. ITA NO.102/AHD/ 2014 SHRI JITESHKUMAR D.BHARAD VS. ITO ASST.YEAR 2009-10 - 2 - 2. THAT, THE FINDING OF THE LEARNED CIT(A) ARE NOT JUS TIFIED IN LAW AS WELL AS FACTS OF THE CASE AND REQUIRED TO BE DELETE D. THE APPELLANT CRAVES TO ADD, ALTER, AMEND OR DELETE ANY OF THE ABOVE GROUNDS OF APPEAL. 2. THE ONLY EFFECTIVE GROUND IN THIS APPEAL IS AGAI NST CONFIRMATION OF PENALTY OF RS.25,000/- U/S.271A OF THE ACT. 2.1. BRIEFLY STATED FACTS OF THE CASE ARE THAT DURI NG THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (AO I N SHORT) OBSERVED THAT THE ASSESSEE CARRIED OUT BUSINESS ACTIVITY AND THE ASSESSEE FAILED TO MAINTAIN THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS A S STIPULATED BY SECTION 44AA OF THE INCOME TAX ACT,1961 (HEREINAFTE R REFERRED TO AS THE ACT). THEREFORE, PENALTY U/S.271A OF THE ACT WAS INITIATED AND PENALTY ORDER U/S.271A OF THE ACT WAS PASSED LEVYING A PENA LTY OF RS.25,000/-. THE ASSESSEE BEING AGGRIEVED BY THE SAID ORDER, PRE FERRED AN APPEAL BEFORE THE LD.CIT(A), WHO AFTER CONSIDERING THE SUB MISSIONS OF THE ASSESSEE DISMISSED THE APPEAL. AGGRIEVED BY THE ORDER OF THE LD.CIT(A), THE ASSESSEE IS FURTHER IN APPEAL BEFORE US. 3. THE LD.COUNSEL FOR THE ASSESSEE REITERATED THE S UBMISSIONS AS WERE MADE BEFORE THE LD.CIT(A) AND HE SUBMITTED THAT THE LD.CIT(A) HAS NOT CONSIDERED THE MATTER IN RIGHT PERSPECTIVE. HE SUB MITTED THAT THE SUBMISSIONS MADE BEFORE THE LD.CIT(A) WERE NOT CONS IDERED AND AS SUCH THE LD.CIT(A) FAILED TO APPRECIATE THE FACTS THAT T HIS IS NOT THE CASE WHERE ITA NO.102/AHD/ 2014 SHRI JITESHKUMAR D.BHARAD VS. ITO ASST.YEAR 2009-10 - 3 - PENALTY U/S.271A OF THE ACT WAS TO BE CONFIRMED. H E SUBMITTED THAT IT WAS SUBMITTED BEFORE THE LD.CIT(A) THAT THE AO HAS WRONGLY IMPOSED THE PENALTY U/S.271A OF THE ACT FOR NON-MAINTENANCE OF BOOKS OF ACCOUNT. HE SUBMITTED THAT THE NON-MAINTENANCE OF BOOKS OF A CCOUNT WAS NOT DELIBERATE BUT DUE TO WRONG CONSTRUCTION OF THE PRO VISIONS OF LAW. UNDER THESE FACTS, HE SUBMITTED THAT THE LD.CIT(A) OUGHT TO HAVE CONSIDERED THE JUDGEMENT OF THE HONBLE HIGH COURT OF ALLAHABAD IN THE CASE OF CIT & ANR. VS. S.K. GUPTA & CO. REPORTED AT 322 ITR 86 (A LLA.). HE FURTHER SUBMITTED THAT THE ACT WAS NOT DELIBERATE AND PLACE D RELIANCE ON THE JUDGEMENT OF THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. VS. STATE OF ORISSA REPORTED AT (1972) 83 ITR 26 (SC) AND OF K.C. BUILDERS VS. ACIT REPORTED AT (2004) 265 ITR 562 (S C). 3.1. ON THE CONTRARY, LD.SR.DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW AND SUBMITTED THAT THERE IS NO ILLEGALITY INT O THE ORDERS OF THE AUTHORITIES BELOW. 4. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. THE LD.CIT(A) HAS CONFIRMED THE PENALTY BY OBSERVIN G AS UNDER:- 2. I HAVE CONSIDERED CAREFULLY, THE SUBMISSIONS M ADE BY THE APPELLANT AND THE PENALTY ORDER PASSED BY THE ASSESSING OFFIC ER. IN THIS CASE, THE ASSESSING OFFICER HAS HELD THAT APPELLANT HAS FAILE D TO MAINTAIN THE BOOKS OF ACCOUNTS AND OTHER DOCUMENTS AS STIPULATED U/S.44AA OF THE IT ACT, 1961. THE AUTHORIZED REPRESENTATIVE HAS SUBMI TTED THAT THE APPELLANT HAS NOT MAINTAINED THE BOOKS OF ACCOUNTS PRESCRIBED U/S.44AA ITA NO.102/AHD/ 2014 SHRI JITESHKUMAR D.BHARAD VS. ITO ASST.YEAR 2009-10 - 4 - OF THE IT ACT, 1961 DUE TO THE IGNORANCE OF THE LAW . HE FURTHER SUBMITTED THAT THE OFFENCE COMMITTED IS NOT DELIBER ATE AND THEREFORE, THE PENALTY LEVIED BE QUASHED. AS CONTENDED BY THE AUT HORIZED REPRESENTATIVE, IGNORANCE OF LAW DO NOT CONSTITUTE REASONABLE CAUSE AS UNDERSTOOD IN TERMS OF PROVISIONS OF SECTION 273B O F THE IT ACT, 1961. THEREFORE, I DECLINE TO INTERFERE WITH THE PENALTY LEVIED U/S.271A OF THE IT ACT, 1961 IN THIS CASE. THE PENALTY LEVIED AT R S.25,000/- U/S.271A OF THE IT ACT, 1961 STANDS CONFIRMED. 4.1. IT IS SETTLED POSITION OF LAW THAT IF THE ASSE SSEE IS ABLE TO DEMONSTRATE THAT THE DEFAULT IN MAINTAINING THE BOO KS OF ACCOUNT AND OTHER DOCUMENTS WAS NOT DELIBERATE, BUT DUE TO MISI NTERPRETATION OF LAW. UNDER SUCH FACTS, THE PENALTY U/S.271A WOULD NOT BE LEVIABLE. IN THE PRESENT SET OF FACTS, THE ASSESSEE IS ABLE TO DEMON STRATE THAT THE DEFAULT FOR NON-MAINTAINING THE BOOKS OF ACCOUNT WAS NOT DELIBE RATE BY THE ASSESSEE. THEREFORE, WE DIRECT THE AO TO DELETE THE PENALTY. ACCORDINGLY, THE ORDER OF THE LD.CIT(A) IS HEREBY SET ASIDE. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON FRIDAY, THE 1 ST DAY OF JANUARY, 2016 AT AHMEDABAD. SD/- SD/- ( ) ( ) ( PRAMOD KUMAR ) ( KUL BHARAT ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD; DATED 01/ 01 /2016 ..,, -. ,../ T.C. NAIR, SR. PS ITA NO.102/AHD/ 2014 SHRI JITESHKUMAR D.BHARAD VS. ITO ASST.YEAR 2009-10 - 5 - / COPY OF THE ORDER FORWARDED TO : 1. &( / THE APPELLANT 2. )&( / THE RESPONDENT. 3. 4 5 / CONCERNED CIT 4. 5 ( ) / THE CIT(A)-III, RAJKOT 5. 7-8 , , , /DR,ITAT, RAJKOT 6. 8CD E. / GUARD FILE. / BY ORDER, )7 //TRUE COPY// / ( DY./ASSTT.REGISTRAR) & ' , / ITAT, RAJKOT 1. DATE OF DICTATION .. 21.12.2015 (DICTATION-PAD 5- PAGES ATTACHED AT THE END OF THIS FILE) 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER ..28/12/2015 3. OTHER MEMBER... 4. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.P. S./P.S.. 5. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 6. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR.P .S./P.S.01.01.2016 7. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 01.01.2016 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK ... 9. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER.. 10. DATE OF DESPATCH OF THE ORDER