SHRI OM PRAKASH GOYAL, BARAN V. INCOME TAX OFFICER, BARAN

ITA 105/JPR/2019

• Counselvise Citation: [2020] 110 COUNSELVISE.COM (IT) 9412 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 6 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-08-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 30-01-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CHANCHAL MEENA ACIT
• Assessee Lawyers: DEVANG GARGIEYA ITP
• Keywords: Salary income; Transactions in derivatives; Period of limitation; Reasonable cause
• Section: 80C; 201; 271B; 44AB

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKO] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM VK;DJ VIHY LA- @ ITA NO. 105/JP/2019 FU/KZKJ.K O'K Z @ ASSESSMENT YEAR : 2011-12 SHRI OM PRAKASH GOYAL THOUGH L/R SMT. URMILA GOYAL CHUMUKHA BAZAR, BARAN. CUKE VS. THE ITO, BARAN. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO.: ASFPG 7474 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPO NDENT FU/KZKFJRH DH VKSJ L S@ ASSESSEE BY : SHRI MAHENDRA GARGIEYA (ADV.) & SHRI DEVANG GARGIEYA (ITP) JKTLO DH VKSJ LS @ REVENUE BY : MISS CHANCHAL MEENA (ACIT) LQUOKBZ DH RKJH[ K@ DATE OF HEARING : 17/08/2020 MN?KKS'K.KK DH RKJH[ K@ DATE OF PRONOUNCEMENT: 18/08/2020 VKNS'K@ ORDER PER: VIJAY PAL RAO, J.M. THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 30.01.2018 OF LD. CIT(A), KOTA ARISING FROM THE PEN ALTY ORDER PASSED U/S 271B OF THE IT ACT FOR THE ASSESSMENT ORDER 201 1-12. DUE TO PREVAILING COVID-19 PANDEMIC CONDITION THE HEARING OF THE APPEAL IS CONCLUDED THROUGH VIDEO CONFERENCE. ITA NO. 105/JP/2019 SHRI OM PRAKASH GOYAL VS. ITO 2 2. THERE IS A DELAY OF 19 DAYS IN FILING THE PRESEN T APPEAL. THE ASSESSEE HAS FILED AN APPLICATION FOR CONDONATION O F DELAY WHICH IS SUPPORTED BY AN AFFIDAVIT. 3. WE HAVE HEARD THE LD. AR AS WELL AS LD. DR AND C AREFULLY PERUSED OF THE APPLICATION FOR CONDONATION OF DELAY. WE FIN D THAT THE ASSESSEE EXPIRED ON 02.02.2018 AND THE PRESENT APPEAL HAS BE EN FILED BY THE WIDOW OF DECEASED ASSESSEE AS A LEGAL REPRESENTATIV E. THE LEGAL REPRESENTATIVE HAS EXPLAINED THE CAUSE OF DELAY AS THE IMPUGNED ORDER WAS NOT RECEIVED BY HER IN TIME AND THEREAFTER SHE WAS NOT CONVERSANT WITH ANY TAX MATTER OR FORMALITIES RELATING TO FILI NG OF THE ASSESSEE. THEREFORE, AFTER COMING OUT OF SHOCK AND GRIEF OF D EATH OF HER HUSBAND SHE TOOK STEPS IN FILING THE PRESENT APPEAL CONSIDE RING THE REASONS EXPLAINED IN THE APPLICATION. WE ARE SATISFIED THAT THE ASSESSEE HAD A REASONABLE CAUSE FOR NOT FILING THE APPEAL WITHIN T HE PERIOD OF LIMITATION. ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE INTEREST OF JUSTICE WE CONDONE THE DELAY IN FILING THE PRESENT APPEAL. 4. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS:- 1. THE IMPUGNED PENALTY ORDER U/S 271B OF THE ACT DATED 24.09.2014 IS BAD IN LAW AND ON FACTS OF THE CASE, FOR WANT OF JURISDICTION AND VARIOUS OTHER REASONS AND HENCE TH E SAME KINDLY BE QUASHED. ITA NO. 105/JP/2019 SHRI OM PRAKASH GOYAL VS. ITO 3 2. RS. 1,00,000-: THE LD. AO ERRED IN LAW AS WELL A S ON THE FACTS OF THE CASE IN IMPOSING A PENALTY U/S 271B OF THE A CT OF RS. 1,00,000/-. THE PENALTY SO IMPOSED, BEING TOTALLY C ONTRARY TO THE PROVISIONS OF LAW AND FACTS KINDLY BE DELETED IN FU LL. 5. THE LD. AR OF THE ASSESSEE HAS SUBMITTED THAT TH E ASSESSEE WAS A PRIEST IN A TEMPLE HAVING INCOME FROM SALARY BELOW THE TAXABLE LIMIT HOWEVER, DURING THE YEAR UNDER CONSIDERATION THE AS SESSEE HAS CARRIED OUT DERIVATIVES TRANSACTIONS IN COMMODITY ON NCDEX. THE ASSESSEE FILED HIS RETURN OF INCOME ON 15.02.2012 DECLARING TOTAL INCOME OF RS. 1,13,910/-.THE AO WHILE COMPLETED ASSESSMENT U/S 14 3(3) OF THE ACT MADE AN ADDITION OF RS. 27,168/- ON ACCOUNT OF DENI AL OF DEDUCTION UNDER SECTIONS 80C & 80GG OF THE ACT AS WELL AS ADD ITION ON ACCOUNT OF LOW DRAWINGS FOR HIS HOUSE HOLD EXPENSES OF RS. 34, 000/-. THE AO NOTED THAT THE DERIVATIVE TRANSACTION EXCEEDS PRESC RIBED LIMIT OF RS. 60,00,000/- AS PER SECTION 44AB OF THE ACT THUS, TH E ASSESSEE WAS REQUIRED TO GET HIS ACCOUNT AUDITED. THE ASSESSING OFFICER HAS LEVIED THE PENALTY FOR WANT OF AUDIT OF ACCOUNT U/S 44AB O F THE ACT WHEREAS THE ASSESSEE WAS NOT MAINTAINING ANY BOOKS OF ACCOU NTS AND THEREFORE, THE QUESTION OF GETTING THE SAME AUDITED DOES NOT A RISE. THE LD. AR HAS FURTHER CONTENDED THAT THE NET LOSS FROM DERIVATIVE TRANSACTIONS IS RS. 46,00,473/-, THEREFORE, THE ASSESSEE WAS NOT REQUIR ED TO GET HIS ITA NO. 105/JP/2019 SHRI OM PRAKASH GOYAL VS. ITO 4 ACCOUNT AUDITED. HE HAS FURTHER CONTENDED THAT SINC E THE ASSESSEE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNTS AND THE RECOR D FILED BY THE ASSESSEE BEFORE THE AO IS NOTHING BUT THE TRADING E NTRIES RECORDED IN D- MAT ACCOUNT AND THE CONTRACT NOTES. IN SUPPORT OF H IS CONTENTION, HE HAS RELIED UPON THE DECISION OF HONBLE BOMBAY HIGH COURT IN CASE OF SHERATON APPARELS VS. ACIT 256 ITR 20 AND SUBMITTED THAT THE BOOKS OF ACCOUNTS DOES NOT REFER TO DIARIES WHICH A RE MAINTAINED MERELY AS A PRIVATE RECORD. HE HAS ALSO REFERRED TO THE JU DGMENT OF HONBLE SUPREME COURT IN CASE OF CBI VS. V.C. SHUKLA (1998) 3 SCC 410 AND SUBMITTED THAT THE HONBLE APEX COURT HAS HELD THAT FILE CONTAINED LOOSE SHEETS OF PAPERS ARE NOT BOOKS AND HENCE ENTRIES THEREIN ARE NOT ADMISSIBLE UNDER SECTION 34 OF THE EVIDENCE ACT, 18 72. HE HAS ALSO RELIED UPON THE JUDGMENT OF HONBLE ALLAHABAD HIGH COURT IN CASE OF CIT VS. S.K. GUPTA AND CO. 322 ITR 86 AS WELL AS DECISION OF JODHPUR BENCH OF THE TRIBUNAL DATED 03.05.2019 IN C ASE OF SMT. SANTA SINGHVI VS. ITO IN ITA NO. 294/JODH/2018. THUS, THE LD. AR HAS SUBMITTED THAT IF FOR SOME REASONS THE ASSESSEE HAS NOT MAINTAINING THE BOOKS OF ACCOUNTS THE APPROPRIATE PROVISIONS UNDER WHICH THE PENALTY CAN BE PROCEEDED U/S 271A OF THE ACT. ITA NO. 105/JP/2019 SHRI OM PRAKASH GOYAL VS. ITO 5 6. ON THE OTHER HAND, THE LD. DR HAS SUBMITTED THAT SECTION 271A/217B OF THE ACT ARE INDEPENDENT PROVISIONS. SI NCE, THE ASSESSEE HAS PRODUCED CORRECT DETAILS OF DERIVATIVE TRANSACT ION CARRIED OUT IN NCDEX AS PER RECORDS SUPPLIED BY THE REGULATORY AUT HORITIES, THEREFORE, THE INCOME/PROFIT CAN BE DEDUCED CORRECTLY FROM THE SAID RECORD. THE NON INITIATION OF PROCEEDINGS U/S 271A OF THE ACT W OULD NOT OPERATE AS BAR FOR INITIATION OF PENALTY U/S 271B OF THE ACT. SHE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WE LL AS RELEVANT MATERIAL ON RECORD. THE ASSESSEE HAS TAKEN A PLEA T HAT SINCE NET RESULTS OF THE TRANSACTIONS OF COMMODITY DERIVATIVES ON NCD EX IS LOSS OF RS. 46,00,473/-, THEREFORE, THE ASSESSEE TOOK THE SAID FIGURES AS THE GROSS RECEIPT FOR THE PURPOSE OF SECTION 44AB OF THE ACT. WE FURTHER NOTE THAT THE ASSESSEE WAS A PRIEST IN A TEMPLE AND APPEARS T O HAVE CARRIED OUT THE DERIVATE TRANSACTIONS IN COMMODITY FIRST TIME D URING THE YEAR. THOUGH THE TURNOVER OF THE DERIVATIVE TRANSACTION W AS NOT CORRECTLY COMPUTED BEING TOTAL SUM OF POSITIVE AND NEGATIVE O UTCOME OF THE TRANSACTIONS HOWEVER, SINCE THE ASSESSEE HAS BELIEV ED THAT LOSS INCURRED BY THE ASSESSEE OF RS. 46,00,473/- IS GROSS RECEIPT FOR THE PURPOSE OF SECTION 44AB OF THE ACT THEREFORE, THIS EXPLANATION OF THE ASSESSEE IS A ITA NO. 105/JP/2019 SHRI OM PRAKASH GOYAL VS. ITO 6 BONAFIDE AND REASONABLE FOR NOT GETTING THE ACCOUNT S AUDITED. WE FURTHER NOTE THAT THE ASSESSEE IS NOT MAINTAINING T HE PROPER BOOKS OF ACCOUNTS THOUGH THE RECORD OF THE TRANSACTIONS IN COMMODITY DERIVATIVES WAS MAINTAINED BY THE ASSESSEE FROM WHI CH A CORRECT PROFIT OR LOSS CAN BE DEDUCED. ACCORDINGLY, IN THE FACTS A ND CIRCUMSTANCE OF THE CASE WHEN THE ASSESSEE HAS TAKEN LOSS ARISING F ROM THESE TRANSACTIONS AS A GROSS RECEIPT FOR THE PURPOSE OF LIMIT PROVIDED U/S 44AB OF THE ACT THEN THE SAID EXPLANATION OF THE AS SESSEE IS A BONAFIDE AND REASONABLE CAUSE AS PER PROVISIONS OF SECTION 2 73B OF THE ACT AND THE PENALTY U/S 271B IS NOT LEVIABLE. ACCORDINGLY W E DELETE THE PENALTY LEVIED BY THE AO U/S 271B OF THE ACT. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 18/08/2020. SD/- SD/- FOE FLAG ;KNO FOT; IKY JKO (VIKRAM SINGH YADAV) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 18/08/2020. * SANTOSH. VKNS'K DH IZFRFYFI VXZSFKR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI OM PRAKASH GOYAL, BARAN. 2. IZR;FKHZ@ THE RESPONDENT- ITO, BARAN. ITA NO. 105/JP/2019 SHRI OM PRAKASH GOYAL VS. ITO 7 3. VK;DJ VK;QDR@ CIT 4. VK;DJ VK;QDR@ CIT(A) 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR. 6. XKMZ QKBZY@ GUARD FILE {ITA NO. 105/JP/2019} VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASST. REGISTRAR