Shri Pankaj M. Patel, Baroda V. The Income Tax Officer, Ward-3(2), Baroda

ITA 1076/AHD/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 80540 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-11-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 20-11-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 11-04-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: M G PATEL
• Keywords: Salary income
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, AHMEDABAD (BEFO RE SHRI MUKUL KR. SHRAWAT, J.M. & SHRI ANIL CHATURVEDI , A.M.) I. T. A. NO S: 1075 & 1076 / AHD/ 20 1 4 (A SSESSMENT YEAR: 2008 - 09) SHRI PANKAJ M. PATEL RIDDHI SIDDHI SOCIETY, STATION ROAD, DABHOI, BARODA - 391110 V/S I.T.O, WARD - 3(2), BARODA (APPELLANT) (RES PONDENT) PAN: ANEPP2737B APPELLANT BY : SHRI M.G. PATEL RESPONDENT BY : SHRI NIMESH YADAV, SR. D.R. ( )/ ORDER DATE OF HEARING : 20 - 11 - 2014 DATE OF PRONOUNCEMENT : 28 - 11 - 201 4 PER SHRI ANIL CHATURVEDI,A.M. 1. THESE TWO APPEALS FILED BY THE REVENUE ARE AGAINST THE ORDER OF CIT(A) - II, BARODA DATED 4.12.2013 FOR A.Y. 2008 - 09. 2. THE FACTS AS CULLED OUT FROM THE MATERIAL ON RECORD ARE AS UNDER. 3. ASSESSEE IS AN INDIVIDUAL STATED TO H AVE DERIVED INCOME FROM SALARY AND CAPITAL GAINS. ASSESSEE FILED HI S RETURN OF INCOME FOR A.Y. 08 - 09 ON 30.07.2008 D ECLARING TOTAL INCOME AT RS. 1,09,210 . THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED UNDER SE CTION 143(3) VIDE ORDER DATED 28.10.2010 AND THE TOTAL INCOME WAS ALSO DETERMINED AT RS. 1,09,21 0/ - . THEREAFTER A.O VIDE ITA NOS. 1075 & 1076/AHD/2014 . A.Y. 2008 - 09 2 ORDER DATED 25.04.2011 LEVIED PENALTY OF RS. 4,59,916/ - U/S 271(1)(C) FOR THE REASON THAT ON THE BASIS OF AIR INFORMATION IT WAS NOTICED BY HIM THAT AS SESSEE HAD MADE INVESTMENTS OF RS. 15,48,400/ - THROUGH IDBI BANK LTD. HE, ON PERUSING THE DEMAT ACCOUNT MAINTAINED BY THE ASSESSEE NOTED THAT THERE WERE HUGE TRANSACTION IN SHARES AND SECURITIES WHICH WERE EN TERED BY THE ASSESSEE BUT WERE NOT REFLECTED IN THE RETURN OF INCOME AND ONLY AFTER THE ISSUANCE OF NOTICE U/S 143(2) AND 143(1), THE TRANSACTIONS CAME ON RECORD. HE WAS THEREFORE OF THE VIEW THAT ASSESSEE HAD NOT DISCLOSED THE FACTS WITH RESPECT TO SHARES TRANSACTION. HE ACCORDINGLY CONCLUDED THAT THE ONUS CAST UPON THE ASSESSEE BY EXPLANATION 1 TO SECTION 271(1)(C) HAS NOT BEEN DISCHARGE D AND THEREFORE ON THE AMOUNT OF ALLEGED UNDISCLOSED INVESTMENT OF RS. 15,48,400/ - LEVIED PENALTY OF RS. 4,59,916. A.O FURTHER VIDE ORDER DATED 26.04.2011 ALSO LEVIED PENALTY U/S 271B OF RS. 31,032/ - FOR THE REASON THAT ACCORDING TO HIM, THE TURNOVER OF THE ASSESSEE WAS RS. 62,06,512/ - WHICH EXCEEDED THE LIMIT PRESCRIBED U/S 44AB OF THE ACT AND THEREFORE THE ASSESSEE WAS REQUIRED TO GET HIS ACCOUNT AUDITED AND FURNISHED THE AUDIT REPORT BY THE PRESCRIBED DATE. HE NOTED THAT SINCE ASSESSEE HAD FAILED TO FURNISH THE AUDIT REPORT, ASSESSEE WAS LIABLE FOR PENALTY U/S 271B OF THE ACT AND ACCORDINGLY LEVIED PENALTY OF RS. 31,032/ - . AGGRIEVED BY THE 2 ORDER S OF A.O, ASSESSEE CA RRIED THE MATTER BEFORE CI T(A). CIT(A) VIDE ORDER DATED 4.12.2013 DISMISSED THE APPEAL OF THE ASSESSEE WITH RESPECT TO LEVY OF PENALTY U/S 271(1)(C) BY HOLDING AS UNDER: - 6.3 NONE APPEARED ON BEHALF OF THE ASSESSEE AT THE TIME OF HEARING DESPITE SERVICE O F NOTICE ON HIM NOR SUBMITTED ANY APPLICATION FOR ADJOURNMENT. FROM THE ABOVE CONDUCT OF THE ASSESSEE, IT IS EVIDENT THAT THE ASSESSEE IS NO MORE INTERESTED IN PURSUING HIS APPEAL. THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS B.N. BHATTACHARJEE AND OTHE RS [1979] 10 CTR 354(SC) OBSERVED THAT PREFERRING AN APPEAL, MEANS EFFECTIVELY PURSUING IT. THE HON'BLE M.P. HIGH COURT IN THE CASE OF ESTATE OF LATE TUKOJIRAO HOLKAR VS CWT [1997] 223 ITR 480 (M.P.) DISMISSED THE REFERENCE FILED AT THE INSTANCE OF THE ASS ESSEE FOR DEFAULT AND FOR NOT TAKING NECESSARY STEPS. CONSIDERING THE CONDUCT OF THE, ASSESSEE IN THE PRESENT CIRCUMSTANCE, I AM OF THE VIEW THAT THE ASSESSEE IS NOT INTERESTED IN PURSUING THE APPEAL AND THE APPEAL NEEDS TO BE DISMISSED. THIS VIEW HAS BEEN TAKEN BY THE JURISDICTIONAL TRIBUNAL IN CASE OF AMITKUMAR H. SHAH VS. ACIT IN ITA NO. 2985/AHD/2010 VIDE THEIR ORDER DATED 31.12.2013, WHEREIN FOLLOWING THE ORDER OF ITAT DELHI BENCH IN THE CASE OF CIT VS MULTIPLAN INDIA PVT. LTD., [1991] 38 ITR 320 (DEL) , ITAT HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE FOR WANT OF PROSECUTION. 4. THE PENALTY LEVIED UNDER 271B WAS ALSO CONFIRMED BY CIT(A) BY HOLDING AS UNDER: - 6.3 NONE APPEARED ON BEHALF OF THE ASSESSEE AT THE TIME OF HEARING DESPITE SERVICE OF NOTICE ON HIM NOR SUBMITTED ANY APPLICATION FOR ADJOURNMENT. FROM THE ABOVE CONDUCT OF THE ASSESSEE, IT IS EVIDENT THAT THE ITA NOS. 1075 & 1076/AHD/2014 . A.Y. 2008 - 09 3 ASSESSEE IS NO MORE INTERESTED IN PURSUING HIS APPEAL. THE HON'BLE SUPREME COURT IN THE CASE OF CIT VS B.N. BHATTACHARJEE AND OTHERS [1979] 1 0 CTR 354(SC) OBSERVED THAT PREFERRING AN APPEAL, MEANS EFFECTIVELY PURSUING IT. THE HON'BLE M.P. HIGH COURT IN THE CASE OF ESTATE OF LATE TUKOJIRAO HOLKAR VS CWT [1997] 223 ITR 480 (M.P.) DISMISSED THE REFERENCE FILED AT THE INSTANCE OF THE ASSESSEE FOR D EFAULT AND FOR NOT TAKING NECESSARY STEPS. CONSIDERING THE CONDUCT OF THE, ASSESSEE IN THE PRESENT CIRCUMSTANCE, I AM OF THE VIEW THAT THE ASSESSEE IS NOT INTERESTED IN PURSUING THE APPEAL AND THE APPEAL NEEDS TO BE DISMISSED. THIS VIEW HAS BEEN TAKEN BY T HE JURISDICTIONAL TRIBUNAL IN CASE OF AMITKUMAR H. SHAH VS. ACIT IN ITA NO. 2985/AHD/2010 VIDE THEIR ORDER DATED 31.12.2013, WHEREIN FOLLOWING THE ORDER OF ITAT DELHI BENCH IN THE CASE OF CIT VS MULTIPLAN INDIA PVT. LTD., [1991] 38 ITR 320 (DEL), ITAT HAS DISMISSED THE APPEAL FILED BY THE ASSESSEE FOR WANT OF PROSECUTION. 5. AGGRIEVED BY THE ORDER OF CIT(A), ASSESSEE IS NOW IN APPEAL BEFORE US. 6. THE GROUNDS RAISED BY THE ASSESSEE IN (ITA NO. 1076/AHD/2014) WHICH IS WITH RESPECT TO LEV Y OF PENALTY U/S 271(1)( C) READS AS UNDER: - 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - II, BARODA HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DISMISSING THE APPEAL HOLDING THAT THE APPELLANT WAS NOT INTERESTED IN PURSUING THE APPEAL. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - II, BARODA OUGHT TO HAVE PASSED ORDER ON MERITS CONSIDERING THE FACTS OF THE CASE RATHER THAN DISMISSING THE APPEAL 3. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - II, BARODA HAS ERRED IN LAW AND ON FACTS OF THE CASE IN NOT CONSIDERING THE SUBM ISSIONS DATED 21.03.2013 FILED WITH HIM IN RESPECT OF DATE OF HEARING ON 21.03.2013. 4. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - II, BARODA HAS ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING PENALTY OF RS.4,59,960/ - U/S.271(L)(C) OF THE ACT THOUG H IN THE ASSESSMENT ORDER PASSED ON 28.10.2010 THE INCOME SHOWN IN THE RETURN OF INCOME OF RS.1,09,210/ - HAS BEEN ACCEPTED BY THE ASSESSING OFFICER AND THE SAME WAS PASSED AFTER CONSIDERING THE INFORMATION RECEIVED BY HIM THROUGH AIR. 7. THE GROUND RAISED BY THE ASSESSEE IN (ITA NO. 1075/AHD/2014) WHICH IS WITH RESPECT TO LEVY OF PENALTY U/S 271B READS AS UNDER: - 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - II, BARODA HAS ERRED IN LAW AND ON FACTS OF THE CASE IN DISMISSING THE APPEAL AGAINST THE PENALTY OF RS.31,032/ - LEVIED BY THE ASSESSING OFFICER U/S.271B WITHOUT CONSIDERING THE MERITS OF THE CASE. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - II, BARODA HAS ERRED IN LAW AND ON FACTS OF THE CASE IN CONFIRMING THE PENALTY LEVIED BY THE ASSESSING OFF ICER U/S.271B OF RS.31,032/ - THOUGH THE APPELLANT HAS NOT MAINTAINED BOOKS OF ACCOUNTS, AND THEREFORE, THERE IS NO QUESTION OF GETTING THE BOOKS OF ACCOUNTS AUDITED U/S.44AB OF THE I.T. ACT, 1961. 3. THE APPELLANT PRAYS THAT THE PENALTY OF RS.31,032/ - LEVIED U/S.271B BE DELETED. 8. BEFORE US LD. A.R. POINTED OUT TO THE ASSESSMENT ORDER PASSED U/S 143(3) AND POINTED TO THE FACT THAT ASSESSEE HAD DECLARED TOTAL INCOME OF RS. 1,09,21 0/ - AND HE WAS ASSESSED ALSO ON THE INCOME RETURNED BY HIM. HE THEREFORE SUBMITTED THAT NO ADDITION HAS BEEN MADE BY THE A.O WHILE FRAMING THE ASSESSMENT ORDER ITA NOS. 1075 & 1076/AHD/2014 . A.Y. 2008 - 09 4 AND IN SUCH CASE THERE WAS NO QUESTION OF LEVY OF PENALTY . W ITH RESPECT TO LEVY OF PENALTY UNDER 271B , H E SUBMITTED THAT FOR FAILURE TO MAINTAIN BOOKS OF ACCOUNTS, ASSESSEE IS LI ABLE TO PENALTY U/S 271A AND ON THE OTHER HAND PENALTY U/S 271B IS TO BE LEVIED FOR FAILURE TO GET AUDITED THE BOOKS OF ACCOUNTS . HE FURTHER SUBMITTED THAT SINCE ASSESSEE HAS NOT MAINTAINED BOOKS OF ACCOUNTS PENALTY U/S 271B CANNOT BE LEVIED AS THE ASSESSE E HAS NOT MAINTAINED THE BOOKS OF ACCOUNTS AND THEREFORE QUESTION OF GETTING IT AUDITED DOES NOT ARISE . FOR THE AFORESAID PROPOSITION HE RELIED ON THE DECISION IN THE CASE OF SURAJMAL PARSURAM TODI VS. CIT (1996) 222 ITR 691. WITH RESPECT TO THE CONFIRMATI ON BY CIT(A) THE PENALTY ORDER OF A.O BY FOLLOWING THE DECISION OF TRIBUNAL IN THE CASE OF CIT VS MULTIPLAN INDIA PV T. LTD. (1991) 38 ITO 320 (DEL), H E SUBMITTED THAT CIT(A) HAS NO POWER TO DISMISS THE APPEAL FOR WANT OF APPEARANCE OF ASSESSEE S REPRESENTA TIVE AND EVEN IF THERE IS NO REPRESENT ATION FROM THE SIDE OF ASSESSEE, CIT(A) HAS TO DECIDE THE APPEAL ON MERITS EX - PARTE QUA THE ASSESSEE. FOR THE AFORESAID PROPOSITION HE RELIED ON THE DECISION IN THE CASE OF SUPRABHAT ROAD CAREERS P. LTD. VS. ITO (2006) 103 TTJ (JD) 720. HE THEREFORE SUBMITTED THAT THE PENALTY LEVIED U/S 271(1)(C) AND SECTION 271B BE DELETED. THE LD. D.R. ON THE OTHER HAND SUPPORTED THE ORDER OF A.O. 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. ON PERUSING TH E ASSESSMENT ORDER PASS ED U/S 143 (3) ON 28.10.2010 FOR A.Y. 2008 - 09 IT IS NOTICED THAT ASSESSEE HAD FILED HIS RETURN OF INCOME DECLARING TOTAL INCOME OF RS. 1,09,210/ - AND THE INCOME WAS ALSO ASSESSED RS. 1,09,210/ - MEANING THEREBY THAT NO ADDITION TO THE RETURNED INCOME HAS BEEN MADE BY THE A.O. FURTHER ON PERUSING THE PENALTY ORDER PASSED BY THE ASSESSEE U/S 271(1)(C), IT IS NOTICED THAT PENALTY HAS BEEN LEVIED ON THE ALLEGED UNDISCLOSED INVESTMENTS OF RS. 15,48,400 / - MADE BY THE ASSESSEE BUT WE FIND NO A DDITION ON ACCOUNT OF UNDISCLOSED INVESTMENTS HAS BEEN MADE IN THE ASSESSMENT ORDER. EVEN BEFORE US , THE LD. D.R. COULD NOT POINT OUT AS TO WHETHER ANY ADDITION ON ACCOUNT OF INVESTMENTS HAS BEEN MADE BY A.O. WE FURTHER FIND THAT CIT(A) WITHOUT DECIDING TH E ISSUE ON MERITS WITH RESPECT TO LEVY OF PEN ALTY U/S 271(1)(C) ITA NOS. 1075 & 1076/AHD/2014 . A.Y. 2008 - 09 5 AND 271B HAS DI S MISSED THE APPEAL OF ASSESSEE BY FOLLOWING THE DECISION OF ITAT DELHI TRIBUNAL CIT VS. MULTIPLAN INDIA LTD. (SUPRA). IN THE CASE OF SUPPRABHAT ROAD CARRIERS (SUPRA) THE CO - ORD INATE BENCH HAS CONCLUDED THAT CIT(A) HAS NO POWER TO DISMISS AN APPEAL FOR WANT OF APPEARANCE OF ASSESSEE S REPRESENTATIVE. IN VIEW OF THE AFORESAID FACTS, WE ARE OF THE VIEW THAT BOTH THE APPEALS HAVE NOT BEEN DECIDED ON MERITS, NEEDS TO BE REMITTED TO T HE FILE OF CIT(A) FOR DECIDING THE ISSUE AFRESH ON MERITS AND IN ACCORDANCE WITH LAW. NEEDLESS TO STATE THAT CIT(A) SHALL GRANT ADEQUATE OPPORTUNITY OF HEARING TO BOTH THE PARTIES. 10. IN THE RESULT, BOTH THE APPEALS OF ASSESSEE ARE ALLOWED FOR STATISTICAL P URPOSES. ORDER PRONOUNCED IN OPEN COURT ON 28 - 11 - 201 4 . SD/ - SD/ - (MUKUL KR. SARAWAT) (ANIL CHATURVEDI) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHMEDABAD