Joseph Issac, Trichy V. ITO, Trichy

ITA 1053/CHNY/2013

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4701 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 13-11-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 20-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N MADHAVAN JCITD R
• Assessee Lawyers: A S SRIRAMAN
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI (BEFORE SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER AND SHRI VIKAS AWASTHY, JUDICIAL MEMBER ) .. I.T.A. NO.1053/MDS/2013 ASSESSMENT YEAR : 2008-09 MR.JOSEPH ISSAC., NO6,GOKUL NAGAR, 2 ND STREET, THIRUVEUMBUR, TRICHY. PAN : AAAPI 2943 L (APPELLANT) V. THE INCOME TAX OFFICER, WARD IV(1), TRICHY. (RESPONDENT) APPELLANT BY : SHRI A.S.SRIRAMAN,ADVOCATE RESPONDENT BY : SHRI N.MADH AVAN, JCIT,D.R. DATE OF HEARING : 13.11.13 DATE OF PRONOUNCEMENT : 21.11.13 O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THIS APPEAL IS FILED BY THE ASSESSEE, AGGRIEVED B Y THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX(A) DATED 21. 02.2013 IN ITA NO.06/2011-12 CONFIRMING PENALTY ORDER PASSED U NDER SECTION 271B BY THE AO READ WITH SECTION 250 OF THE ACT. ITA NO. 1053/MDS/13 2 2. THE ASSESSEE HAS RAISED FIVE GROUNDS IN HIS APP EAL. HOWEVER, THE CRUX OF THE ISSUE IS THAT LD. CIT(A) H AD ERRED BY LEVYING PENALTY UNDER SEC. 271 B FOR NOT FURNISHING AUDIT R EPORT UNDER SECTION 44AB OF THE ACT. 3. THE ASSESSEE IS AN INDIVIDUAL ENGAGED IN CONTRA CT WORKS FILED HIS RETURN OF INCOME FOR ASSESSMENT YEAR 2008-09 ON 13.06.2008 ADMITTING HIS INCOME AT `. 3,74,482/-. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS UNDER SECTION 143(3) OF THE ACT, LD.AO OBSERVED THAT THE ASSESSEE HAD NOT FURNISHED AUDIT REPORT UNDER SECTION 44AB OF THE ACT. FURTHER, IT WAS OBSERVE D THAT THE ASSESSEE HAD NOT MAINTAINED PROPER BOOKS OF ACCOUNTS AND THE REFORE, THE LD.AO COMPLETED THE ASSESSMENT PROCEEDINGS BY ESTIM ATING THE INCOME AT 8% OF THE TOTAL CONTRACT RECEIPTS AND ALS O LEVIED PENALTY UNDER SEC. 271 B OF THE ACT. ON APPEAL, THE LD. CI T(A) CONFIRMED THE PENALTY ORDER OF THE LD.AO. 4. BEFORE US, LD.A.R REITERATED HIS ARGUMENTS MADE BEFORE THE REVENUE AND PLEADED THAT THE PENALTY LEVIED UNDER S ECTION 271 B ITA NO. 1053/MDS/13 3 MAY BE DROPPED. ON THE OTHER HAND, LD.D.R STRONGLY SUPPORTED THE ORDERS OF THE REVENUE AND SUBMITTED THAT THEIR ORDE R MAY BE CONFIRMED. 5. AFTER HEARING BOTH SIDES AND PERUSING THE MATERI ALS ON RECORD, WE FIND THAT THE ASSESSEE HAD SUBMITTED THE FOLLOWI NG REASONS FOR NOT FURNISHING TAX AUDIT REPORT AS SPECIFIED UNDER THE ACT :- (I) THE ACCOUNTANT OF THE ASSESSEE HAD LEFT THE JO B IN THE MIDDLE OF THE YEAR WITHOUT NOTICE. (II) HE WAS NOT EDUCATED AND THEREFORE, WAS NOT IN A POSITION TO COMPILE HIS ACCOUNTS. (III) NON-MAINTENANCE OF BOOKS OF ACCOUNT WAS NOT WILLFUL AND INTENTIONAL. 6. THE ABOVE FACTS WERE NOT DISPUTED BY THE REVEN UE. THUS, FROM THE SUBMISSION OF THE ASSESSEE IT IS EVIDENT THAT T HE ILLITERATE ASSESSEE WAS STRUGGLING AGAINST ALL ODDS IN ORDER T O PURSUE HIS CONSTRUCTION BUSINESS AND HAD NOT WILLFULLY DEFAULT ED. HE HAS ALSO ACCEPTED THE ESTIMATED ADDITION MADE BY THE LD.AO A T 8% OF THE CONTRACT RECEIPTS AS AGAINST 6% OFFERED BY HIM WHIC H RESULTED IN AN ITA NO. 1053/MDS/13 4 ADDITION OF `. 1,26,010/-. ON READING SEC.271B OF THE ACT, IT IS EVIDENT THAT LEVY OF PENALTY IS NOT MANDATORY BUT D ISCRETIONARY, SINCE THE ACT PROVIDES THAT ASSESSING OFFICER MAY DIRECT THAT SUCH PERSON SHALL PAY, BY WAY OF PENALTY --- --- ---- ---- . CONSIDERING THE FACTS AND CIRCUMSTANCES OF THIS CASE BEFORE US, WE ARE OF THE CONSIDERED VIEW THAT THE LEVY OF PENALTY UNDER SECTION 271 B OF THE ACT WOULD BE TOO HARSH ON THE ASSESSEE AND THEREFORE, WE HEREBY DIRE CT THE LD.AO TO DELETE THE SAME. 7. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED . ORDER PRONOUNCED ON 21 ST NOVEMBER, 2013 AT CHENNAI. SD/- SD/- (VIKAS AWASTHY) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 21 ST NOVEMBER, 2013. K S SUNDARAM. COPY TO: ASSESSEE/AO/CIT (A)/CIT/D.R./GUARD FILE