Chakravarthy, Salem V. DCIT, Salem

ITA 1139/CHNY/2015

• Counselvise Citation: 113921714 RSA 2015
• Duration Of Justice: 4 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Assessee
• Bench Allotted: D
• Assessment Year: 2009-2010
• Appeal Filed On: 14-05-2015
• Court: TRIBUNAL
• Department Lawyers: A B KOLI CIT D R
• Assessee Lawyers: S SRIDHARERODESALEM
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, CHENNAI ... , . , , BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NOS.1138 & 1139 /MDS./2015 ( !' #' / ASSESSMENT YEARS :2008-09 & 2009-10) M/S.CHAKRAVARTHY , NO.68,1 ST AGRAHARAM, SALEM 636 001. VS. THE D.C.I.T., CIRCLE III,NO.3, GANDHI ROAD, SALEM-7. PAN AADFC 1674 P ( / APPELLANT ) ( / RESPONDENT ) $% & ' / APPELLANT BY : MR.S.SRIDHAR,ERODE,SALEM ()$% & ' / RESPONDENT BY : MR.A.B.KOLI, CIT D.R * + & ,- / DATE OF HEARING : 10.08.2015 .# & ,- /DATE OF PRONOUNCEMENT : 30.09.2015 / O R D E R PER A.MOHAN ALANKAMONY , ACCOUNTANT MEMBER: THESE TWO APPEALS ARE FILED BY THE ASSESSEE, AGG RIEVED BY THE ORDERS OF THE LEARNED COMMISSIONER OF INCOME TAX(A) , SALEM IN ITA ITA NO.1138, 1139/MDS/2015 2 NO.123/2013-14 FOR THE ASSESSMENT YEAR 2008-09 & IN ITA NO.124/2013-14 FOR THE ASSESSMENT YEAR 2009-10 BOTH ORDER DATED 27.02.2015, PASSED UNDER SEC.271A READ WITH SECTIO N SEC. 250 OF THE ACT. 2. THE ASSESSEE HAS RAISED FOUR ELABORATE AND SIMI LAR GROUNDS IN BOTH THE APPEALS; HOWEVER THE CRUX OF THE ISSUE IS THAT THE ASSESSEE IS AGGRIEVED BY THE ORDERS OF THE LD. CIT (A), WHO HAD CONFIRMED THE PENALTY OF ` 25,000/- LEVIED U/S.271A OF THE ACT FOR EACH OF THE ASSESSMENT YEARS 2008-09 & 2009-10 SINCE THE ASSESS EE HAD FAILED TO KEEP AND MAINTAIN BOOKS OF ACCOUNTS, DOCUMENTS E TC. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESS EE IS A PARTNERSHIP FIRM, ENGAGED IN THE BUSINESS OF RETAIL TRADING IN TEXTILES. THE ASSESSEE DID NOT FILE ITS RETURN OF INCOME FOR BOTH THE ASSESSMENT YEARS 2008-09 & 2009-10. NOTICE U/S.142(1) WAS ISS UED TO THE ASSESSEE FOR WHICH THE ASSESSEE DID NOT RESPOND. IN THESE CIRCUMSTANCES, THE LD. ASSESSING OFFICER REQUESTED FOR THE INFORMATION REGARDING THE TURNOVER OF THE ASSESSEE FROM THE SALES ITA NO.1138, 1139/MDS/2015 3 TAX AUTHORITIES FOR THE ASSESSMENT YEAR 2008-09. I N RESPONSE, HE OBTAINED THE TURNOVER OF THE ASSESSEE FOR ELEVEN MO NTHS AS ` 26,10,780/- AND THEREAFTER BY ESTIMATING THE TURNOV ER FOR THE MONTH OF JUNE AT ` 37,36,606/- WORKED OUT THE TOTAL TURNOVER FOR THE ASSESSMENT YEAR 2008-09 AT ` 5,25,09,920/-. SIMILARLY FOR THE ASSESSMENT YEAR 2009-10 THE ASSESSEE HAD STATED ITS TURNOVER AS ` 26,10,780/-, HOWEVER SINCE THE BOOKS OF ACCOUNTS WE RE NOT PRODUCED THE LD. ASSESSING OFFICER ESTIMATED THE TU RNOVER AT ` 5,77,59,920/- BASED ON THE EARLIER YEARS TURNOVER. THE ASSESSEE HAD FAILED TO PRODUCE BOOKS OF ACCOUNTS SUPPORTING VOUCHERS, PURCHASE BILLS, VOUCHERS FOR EXPENSES ETC. BEFORE T HE LD. ASSESSING OFFICER FOR BOTH THE ASSESSMENT YEARS. THE LD. A.R . HAD CONTENDED BEFORE THE LD. ASSESSING OFFICER THAT THE MANAGING PARTNER OF THE FIRM WAS SUFFERING FROM VARIOUS AILMENTS DUE TO WHICH HE WAS NOT ABLE TO MAINTAIN THE BOOKS OF ACCOUNTS. REJECTING THE CONTE NTION OF THE ASSESSEE, THE LD. ASSESSING OFFICER INVOKING THE PR OVISIONS OF SECTION 271A OF THE ACT, LEVIED PENALTY ON THE ASSESSEE FOR ` 25,000/- EACH OF THE YEAR IN WHICH THE ASSESSEE HAD FAILED TO MAINTA IN THE BOOKS OF ITA NO.1138, 1139/MDS/2015 4 ACCOUNTS AND THE RELEVANT DOCUMENTS. THE LD.CIT(A) ALSO CONFIRMED THE ORDER OF THE LD. ASSESSING OFFICER BY OBSERVING AS UNDER:- 4. THE CASE WAS POSTED FOR HEARING. MR. T.S.SUBRAM ANIAM, FCA APPEARED AND FILED WRITTEN SUBMISSION AS UNDER: 1. FOR THE ABOVE ASSESSMENT YEAR BY PENALTY ORDER D ATED 23.09.2013. THE ASSESSING OFFICER HAS LEVIED A PENALTY FOR NON-MAIN TENANCE OF THE BOOKS OF ACCOUNTS, DOCUMENTS ETC., 2. FOR THE SAME ASSESSMENT YEAR THE ASSESSMENT WAS ALSO COMPLETED U/S.144 OF THE ACT BY ORDER DATED 04.03.2013. AGAINST THE S AID 144 ORDER APPEAL FILED WITH CIT (APPEALS) HAS BEEN DECIDED IN ITA NO.38/20 12-13. ON THE BASIS OF THE REMAND REPORT DATED 24.02.2014 GIVEN BY THE ASS ESSING OFFICER TO THE CIT(APPEALS) WHICH WAS FORWARDED BY THE ASSESSING O FFICER, AFTER EXAMINATION OF THE BASIS OF THE BOOKS OF ACCOUNTS P RODUCED BEFORE HIM SUBSEQUENT TO THE ASSESSMENT U/S.144 OF THE ACT. 3. FROM THE ABOVE REMAND REPORT DATED 24.02.2014 TH E ASSESSING OFFICER HAS MENTIONED IN PAGE NO.2 OF HIS REMAND REPORT DATED 2 4.02.2014 THAT DURING THE HEARING ON 12.02.2014, THE ASSESSEE PRODUCED TH E COMPUTERIZED BOOKS OF ACCOUNTS, BILLS AND VOUCHERS IN SUPPORT OF THE E XPENSES CLAIMED IN THE PROFIT AND LOSS ACCOUNT. 4. FROM THE ABOVE FINDING OF THE DCIT, CIRCLE III, SALEM IT GOES TO PROVE THAT THE APPELLANT HAS MAINTAINED PROPER BOOKS OF ACCOUNTS F OR THE BUSINESS TRANSACTIONS, BUT WHICH COULD NOT BE PRODUCED BEFOR E THE ASSESSING OFFICER DUE TO ILL HEALTH OF THE ONE OF THE PARTNER NAMELY M.A,HAROON RASHEED, WHICH HAS RESULTED IN EX-PARTY ASSESSMENT U/S.144 O F THE ACT. FROM THE ABOVE EVIDENCES IT IS CLEAR THAT THE APPELLANT HAS MAINTAINED BOOKS OF ACCOUNTS REQUIRED FOR AUDI U/S.44AB OF THE ACT. ON THE BASIS OF WHICH ONLY ITA NO.1138, 1139/MDS/2015 5 THE RETURNS ARE FILED SUBSEQUENTLY WITH THE AUDIT R EPORT. HENCE THE PENALTY LEVIED U/S.271A OF THE AUDIT REPORT. HENCE, THE PEN ALTY LEVIED U/S.271A OF THE ACT FOR FAILURE TO KEEP, MAINTAIN, OR RETAIN BOOKS OF ACCOUNTS/DOCUMENTS MAY BE CANCELLED AND JUSTICE RENDERED. 5. I HAVE PERUSED THE SUBMISSIONS OF THE APPELLANT AND THE PENALTY ORDER. THE ONLY ISSUE CONTESTED IN APPEAL IS THE LEVY OF PENAL TY U/S.271A OF THE INCOME- TAX ACT, FOR NON MAINTENANCE OF BOOKS OF ACCOUNTS. THE APPELLANT RELIES ON THE REPORTS OF THE APPELLANT DURING THE REMAND STAG E, IN THE QUANTUM APPEAL IN THE CASE ON THE APPELLANT. THE APPELLANT STATES THAT THE ASSESSING OFFICER HIMSELF ACCEPTED THAT THE BOOKS OF ACCOUNTS WERE PR OVIDED AND HENCE PENALTY IS NOT LEVIABLE. 5.1 IN THIS CONTEXT AN EXTRACT OF THE REPORT IS AS BELOW. AS PER THE FRESH EVIDENCE FILED THE ASSESSEE STATE S THAT HE HAD FILED E-RETURN OF INCOME ON 08.03.2013( FOR A.Y.2008-09) ) & 27.03.2 013(FOR A.Y. 2009-10) IT CAN BE SEEN FROM THE ASSESSMENT ORDER U/S. 143(3) R .WS. 147 PASSED ON 04.03.2013 THAT THE ORDER WAS PASSED PRIOR TO THE R ETURN OF INCOME FILED BY THE ASSESSEE. 5.2 THEREFORE, IT IS CLEAR THAT THE BOOKS WERE NOT MAINTAINED DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, BUT WOULD HAVE BEEN MADE AT A LATER DATE. THE APPELLANTS CONTENTIONS ARE NOT ACCEPTED AND TH E GROUNDS ARE NOT ALLOWED. 4. BEFORE US, THE LD. A.R REITERATED THE SUBMISSIO NS MADE BEFORE THE REVENUE ON EITHER OCCASION. ON THE OTHER HAND L D. D.R ARGUED IN SUPPORT OF THE ORDERS OF THE REVENUE. 5. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PE RUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE FACTS OF TH E CASE IT IS CLEAR THAT THE ASSESSEE HAS GROSSLY ERRED FOR NOT MAINTAI NING THE BOOKS OF ITA NO.1138, 1139/MDS/2015 6 ACCOUNTS AND THE RELEVANT DOCUMENTS. IT IS ALSO REV EALED FROM THE REPORTS FURNISHED TO THE SALES TAX AUTHORITIES THAT THE ASSESSEE WAS HAVING ENORMOUS TURNOVER FOR THE ASSESSMENT YEAR 20 08-09 I.E. MORE THAN ` 4/- CRORES. THE ASSESSEE HAS ALSO NOT FURNISHED IT S RETURNS OF INCOME. THE ONLY PLEA TAKEN BEFORE THE REVENUE WAS THAT THE MANAGING PARTNER OF THE FIRM WAS ILL AND SUFFERING FROM VARIOUS AILMENTS DUE TO WHICH THE FIRM COULD NOT MAINTAIN I TS BOOKS OF ACCOUNTS AND REQUISITE DOCUMENTS. WE DO NOT FIND A NY MERIT IN THESE SUBMISSIONS BY THE LD. A.R. WHEN THE MANAGING PART NER OF THE FIRM IS INCAPACITATED BY ILLNESS, WE WONDER AS TO HOW TH E ASSESSEE WAS RUNNING A TEXTILE RETAIL SHOP AND WAS ABLE TO ACHIE VE SUCH WHOOPING TURNOVER OF MORE THAN ` 4/- CRORES PER ANNUM. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE CONSIDE RED VIEW THAT THE REASONS SUBMITTED BY THE ASSESSEE FOR NOT MAINTAINI NG THE BOOKS OF ACCOUNTS HAS NO MERITS. IN THIS SITUATION, WE ARE O F THE CONSIDERED VIEW THAT THE PENALTY LEVIED BY THE LD. ASSESSING O FFICER INVOKING THE PROVISIONS OF SECTION 271A OF THE ACT APPEARS TO BE APPROPRIATE. THE LD. CIT (A) HAS ALSO UPHELD THE ORDER OF THE LD. AS SESSING OFFICER BECAUSE THE ASSESSEE HAD NOT ADVANCED ANY OTHER ARG UMENTS BEFORE ITA NO.1138, 1139/MDS/2015 7 HIM. BEFORE US ALSO, NO OTHER REASONS WERE CITED BY THE LD. A.R TO JUSTIFY HIS STAND. THEREFORE, WE DO NOT FIND IT NEC ESSARY TO INTERFERE WITH THE ORDER OF THE LD. CIT (A). ACCORDINGLY, TH E PENALTY LEVIED BY THE LD. ASSESSING OFFICER STAND CONFIRMED FOR BOTH THE ASSESSMENT YEARS. 6. IN THE RESULT, THE APPEALS OF THE ASSESSEE ARE D ISMISSED. ORDER PRONOUNCED ON 30 TH SEPTEMBER, 2015 AT CHENNAI. SD/- SD/- ( . . . ) ( N.R.S.GANESAN ) ( . '#$ %' ) (A.MOHAN ALANKAMONY) JUDICIAL MEMBER ACCOUNTANT MEMBER CHENNAI, DATED THE 30 TH EPTEMBER, 2015. K S SUNDARAM. & (,/0 1 0#, /COPY TO: 1. $% /APPELLANT 2. ()$% /RESPONDENT 3. * 2, ( ) /CIT(A) 4. * 2, /CIT 5. 05 (,6! /DR 6. ' 7+ /GF