Smt. Mukti Roy, Kolkata V. I.T.O.,Ward-2(40, Kolkata

ITA 113/KOL/2019

• Counselvise Citation: [2020] 112 COUNSELVISE.COM (IT) 0171 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2020
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 22-01-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RANU BISWAS
• Assessee Lawyers: SUBHO CHAKRAVORTY
• Keywords: Speculation loss
• Section: 271B; 44AB; 148; 2

Judgement Text

1 I.T.A NO. 113/KOL/2019 A.Y 2010-11 SMT. MUKTI ROY IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : KOLKATA [BEFORE SHRI A. T. VARKEY, JM AND DR. ARJUN LAL S AINI, AM ] I.TA NO. 113/KOL/2019 A.Y 2010-11 SMT. MUKTI ROY (PAN: AJDPR5772L) VS. I.T.O. WARD- 2(4), KOLKATA APPELLANT RESPONDENT DATE OF HEARING 04.12.2019 DATE OF PRONOUNCEMENT 01.01.2020 FOR THE APPELLANT SHRI SUBHO CHAKRAVORTY, ADVOCATE FOR THE RESPONDENT SMT. RANU BISWAS, ADDL. CIT ORDER PER SHRI A.T. VARKEY, JM THIS APPEAL PREFERRED BY THE ASSESSEE AGAINST THE O RDER OF LD. CIT(A)-BURDWAN DATED 20-12-2018 FOR THE ASSESSMENT YEAR 2010-11. 2. AT THE OUTSET, IT HAS BEEN BROUGHT TO OUR NO TICE THAT THE APPEAL OF THE ASSESSEE IS AGAINST THE ACTION OF THE LD. CIT(A) IN CONFIRMING THE PENALTY U/S. 271A/271B OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS TH E ACT) OF AN AMOUNT OF RS.1,50,000/-. 3. BRIEFLY STATED THE FACTS ARE THAT THE AO NOTED I N THE ASSESSMENT PROCEEDINGS THAT THE ASSESSEE HAD MADE TRANSACTION OF SHARES AN D SECURITIES THROUGH M/S. ICICI SECURITIES LTD. SO THE AO ISSUED NOTICE U/S. 133(6 ) OF THE ACT TO NSE CALLING FOR DETAILS OF TRANSACTIONS IN THE NAME OF THE ASSESSEE . ACCORDING TO AO, FROM THE REPLY OF NSE IT WAS FOUND THAT THE TOTAL SALE WAS TO TUNE OF RS.23,08,90,576.50 AND THE ASSESSEE HAD PAID STT OF RS.59,332.99/- AND THEREBY INCURRED TOTAL LOSS OF RS.1,96,168.49. THE AO OBSERVED THAT THE ASSESSEE HAD NOT FILED RETURN OF INCOME IN RESPONSE TO NOTICE U/S. 148 OF THE ACT. THEREFORE, WHILE COMPLETING THE AS SESSMENT ON 25.03.2015, THE AO CONSIDERED THE LOSS AS SPECULATION LOSS AND INITIAT ED PENALTY PROCEEDINGS U/S. 271B OF 2 I.T.A NO. 113/KOL/2019 A.Y 2010-11 SMT. MUKTI ROY THE ACT FOR FAILING TO GET THE ACCOUNTS AUDITED AS REQUIRED U/S. 44AB OF THE ACT. THEREAFTER BY PENALTY ORDER U/S 271B OF THE ACT DAT ED 29.01.2018, THE AO LEVIED PENALTY OF RS. 1,50,000/- OF THE ACT. AGGRIEVED, TH E ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A) WHO CONFIRMED PENALTY ALSO UN DER SECTION 271A AS WELL AS U/S 271B OF THE ACT. AGGRIEVED, THE ASSESSEE IS BEFORE US. 4. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUG H THE FACTS AND CIRCUMSTANCES OF THE CASE. AT THE OUTSET ITSELF, W E NOTE THAT THE AO IN THE ASSESSMENT ORDER DATED 25.03.2015 AT PARA 6 HAS FOUND THAT ASS ESSEE IS NOT MAINTAINING ANY BOOKS OF ACCOUNT. IN SUCH A SCENARIO PENALTY U/S. 271A O F THE ACT IN CONTRAVENTION OF SEC. 44AA CAN BE ONLY LEVIED AND NOT U/S 271B OF THE ACT . WE NOTE THAT THE DELHI TRIBUNAL IN NIRMAL KUMAR JAIN VS. ITO IN ITA NOS. 6696 & 664 5/DEL/2014 FOR AY 2010-11 DATED 02.03.2016 HAS HELD THAT WHEN THE AO HAS FOUN D DURING ASSESSMENT THAT ASSESSEE IS NOT MAINTAINING BOOKS OF ACCOUNT, THEN PENALTY U /S 271B FOR NOT GETTING THE BOOKS AUDITED SHOULD NOT BE LEVIED AS UNDER: 3. IN SO FAR AS THE PENALTY U/S. 271B IS CONCERNED , IT IS NOTICED THAT THE AO HAS RECORDED A CATEGORICAL FINDING ON PAGE 2 OF THE ASS ESSMENT ORDER THAT NO BOOKS OF ACCOUNT WERE MAINTAINED BY THE ASSESSEE. UNDER SUC H CIRCUMSTANCES, A QUESTION ARISES AS TO WHETHER ANY PENALTY CAN BE IMPOSED U/S . 271B FOR NOT GETTING THE BOOKS OF ACCOUNT AUDITED. THE HONBLE GAUHATI HIGH COURT IN SURAJ MAL PARASURAM TODI VS. CIT (1996) 222 ITR 691 (GAU) HAS HELD THAT WHERE NO BOOKS OF ACCOUNT ARE MAINTAINED, PENALTY SHOULD BE IMPOSED FOR NON-MAINT ENANCE OF BOOKS OF ACCOUNT U/S. 271A AND NO PENALTY CAN BE IMPOSED U/S. 271B FOR VI OLATION OF SECTION 44AB REQUIRING ITA NOS. 6696 &6645/DEL/2014 AUDIT OF ACCOUNTS. SI MILAR VIEW HAS BEEN TAKEN BY THE HONBLE ALLAHABAD HIGH COURT IN CIT VS. BISAULI TRA CTORS (2008) 299 ITR 219 (ALL). THE HONBLE ALLAHABAD HIGH COURT REITERATED THE SI MILAR VIEW IN CIT AND ANR. VS. S. K. GUPTA AND CO. (2010) 322 ITR 86 (ALL) BY HOLDING THAT REQUIREMENT OF GETTING THE BOOKS OF ACCOUNT AUDITED CAN ARISE ONLY WHERE THE B OOKS OF ACCOUNT ARE MAINTAINED. IN THE ABSENCE OF THE MAINTENANCE OF BOOKS OF ACCOU NT, THERE CAN BE NO PENALTY U/S. 271B OF THE ACT. IN VIEW OF THE FOREGOING LEGAL PO SITION EMANATING FROM THE JUDGMENTS OF THE TWO HONBLE HIGH COURTS, WE ARE CONVINCED TH AT PENALTY U/S. 271B OUGHT NOT TO HAVE BEEN LEVIED BECAUSE THE ASSESSEE ADMITTEDLY DI D NOT MAINTAIN ANY BOOKS OF ACCOUNT AS HAS BEEN RECORDED IN THE ASSESSMENT ORDE R ITSELF. WE, THEREFORE, ORDER FOR THE DELETION OF PENALTY. 5. RESPECTFULLY FOLLOWING THE RATIO IN NIRMAL KUMA R JAIN (SUPRA), OF THE TRIBUNAL & TAKING NOTE OF THE RATIO LAID BY THE HON BLE HIGH COURTS MENTIONED IN THAT ORDER, WE ARE OF THE OPINION THAT PENALTY U/S 271B OUGHT NOT TO HAVE BEEN LEVIED 3 I.T.A NO. 113/KOL/2019 A.Y 2010-11 SMT. MUKTI ROY AGAINST THE ASSESSEE AND SINCE THE LD. CIT(A) HAS E XERCISED HIS CO-TERMINUS POWER TO LEVY PENALTY U/S 271A OF THE ACT FOR NOT MAINTAININ G BOOKS OF ACCOUNT, THEREFORE, WE RESTRICT THE PENALTY TO THE TUNE OF RS. 25,000/- IN PLACE OF R.1,50,000/- AS IMPOSED BY AO AND CONFIRMED BY LD. CIT(A). SO, THE ASSESSEE G ETS RELIEF OF RS.1,25,000/-. 6. IN THE RESULT, THE APPEAL OF ASSESSEE IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 1ST JANUARY, 2020 SD/- SD/- ARJUN LAL SAINI A.T. VARKEY ACCOUNTANT MEMBER JUDICIAL MEMBE R D ATED 1ST JANUARY, 2020 JD. (SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT - SMT. MUKTI ROY, C/O SHRI K. S. ROY, RA BINDRAPALLY, BURDWAN- 713101 2 RESPONDENT: ITO, WARD-2(4),KOLKATA. 3. CIT, 4. CIT(A)-BURDWAN, 5. DR, KOLKATA BENCHES, KOLKATA TRUE COPY BY ORDER ASSISTANT REGISTRAR ITAT KOLKATA