KUMUD CHAND JAIN HUF, Jaipur V. ITO, Jaipur

ITA 120/JPR/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5130 (ITAT-JAIPUR)
• Duration Of Justice: 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2007-2008
• Appeal Filed On: 08-02-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA CIT DR DHK

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 120/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2007-08 SHRI KUMUD CHAND JAIN, HUF PROP. M/S. K.S. EXPORTS 63, SHOPPING CENTRE,NEAR PEETAL FACTORY, JAIPUR CUKE VS. THE ITO WARD- 3(2), JAIPUR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAEHK 0120 M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI P.C. PARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY :SHRI R.A. VERMA, ADDL CIT-. DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 26/08/2016 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 12 /09/2016 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A), ALIGARH (CAMP OFFICE AT JAIPUR) DATED 30- 12-2015 FOR THE ASSESSMENT YEAR 2007-08 RAISING THEREIN FOLLOWING G ROUNDS:- 1 THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN NOT ACCEPTING THE CONTENTION OF THE ASSESSEE THAT PENAL TY LEVIED BY THE AO U/S 271A ON THE DIRECTION OF THE LD. CIT (A) IS ILLEGAL AND BAD IN LAW SINCE AS PER SECTION 271A IF LD. ITA NO. 120/JP/2016 SHRI KUMUD CHAND JAIN, HUF VS. ITO, WARD- 3(2) JAIP UR . 2 CIT(A) IS SATISFIED THAT ASSESSEE HAS NOT MAINTAINE D BOOKS OF ACCOUNT, ONLY LD. CIT(A) HAS THE AUTHORITY TO IMPOS E PENALTY. 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN HOLDING THAT THE ORDER PASSED U/S 271A OF THE I.T. ACT, 1961 IS NOT BARRED BY LIMITATION AND THEREBY AFFIRMING T HE LEGALITY OF THE ORDER 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE LEVY O PENALTY OF RS. 25,000/- U/S 271(A) OF THE I.T. ACT, 1961. 2.1 AT THE OUTSET OF THE HEARING OF THE GROUNDS OF APPEAL OF THE ASSESSEE, THE LD. AR OF THE ASSESSEE RELIED ON THE ORDER DATED 16-08-2016 OF ITAT (SMC) BENCH, JAIPUR IN THE CASE OF SHRI KU MUD CHAND JAIN VS. ITO (ITA NO. 716/JP/2015 FOR THE ASSESSMENT YEAR 20 07-08) WHEREIN THE LD. AR OF THE ASSESSEE PRAYED THAT THE ISSUES IN QU ESTION ARE COVERED BY THE JUDGEMENT OF THIS BENCH OF ITAT AND THE RELIEF SHOULD BE GRANTED ACCORDINGLY. 2.2 THE LD. DR RELIED ON THE ORDER OF THE LOWER AUT HORITIES. 2.3 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. I FIND MERIT IN THE SUBMISSION S OF THE LD. AR OF THE ASSESSEE THAT THE ISSUES IN QUESTION ARE COVERED BY THE JUDGEMENT OF ITAT (SMC) BENCH, JAIPUR IN THE CASE OF SHRI KUMUD CHAN D JAIN VS. ITO (SUPRA) WHEREIN THE BENCH HAD OBSERVED AS UNDER:- ITA NO. 120/JP/2016 SHRI KUMUD CHAND JAIN, HUF VS. ITO, WARD- 3(2) JAIP UR . 3 2.5 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSE D THE MATERIALS AVAILABLE ON RECORD. IT IS OBSERVED IN TH E PRESENT CASE THAT THE ASSESSEE FURNISHED THE AUDITED ACCOUNTS BEFORE THE AO WHERE THE SALE OF RS. 9,55,23,214/- WAS DISCLOSED. BASED ON SUCH ACCOUNTS, THE AO MADE THE TRADING ADDITION BY APPLY ING GROSS PROFIT RATE OF 2% ON THE DECLARED SALE. THUS THE AO WAS SATISFIED THAT THE ASSESSEE HAD MAINTAINED BOOKS OF ACCOUNT A ND THEREFORE, HE HAD NOT INITIATED PENALTY PROCEEDINGS U/S 271A THOU GH THE AO HAD INITIATED PENALTY PROCEEDINGS U/S 271(1), 271(B) A ND 271B OF THE ACT. IN APPELLATE PROCEEDINGS, THE LD. CIT(A) RECOR DED A FINDING THAT THE ASSESSEE HAD NOT MAINTAINED ANY BOOKS OF A CCOUNT AND EARNED BROKERAGE INCOME OF MORE THAN RS. 1,25,000/- LACS AND THUS PENALTY PROCEEDINGS U/S 271A IS TO BE INITIATED BY THE AO. TAKING INTO CONSIDERATION ALL THE ASPECTS OF THE ISSUE IN QUESTION, IT IS OBSERVED THAT THE ASSESSEE HAS SUBMITTED THE COPY O F AUDITED ACCOUNTS BEFORE THE AO BUT THE ASSESSEE COULD NOT PRODUCE THE BOOKS OF ACCOUNT DUE TO LOSS OF THE SAME. IN SUCH A SITUATION, PENALTY IMPOSED U/S 271A FOR NON-MAINTENANCE OF BOO KS OF ACCOUNT DESERVES TO BE DELETED AND THUS PENALTY IS NOT LEVIABLE. HENCE, THE APPEAL OF THE ASSESSEE IS ALLOWED. 2.4 IN VIEW OF THE SIMILAR FACTS AND CIRCUMSTANCES OF T HE ASSESSEES CASE WITH THE CASE OF SHRI KUMUD CHAND JAIN VS. ITO (SUPRA) AND THE OBSERVATIONS MADE HEREINABOVE, I DIRECT TO DELETE T HE PENALTY OF RS. 25,000/- U/S 271A OF THE ACT. THUS THE APPEAL O F THE ASSESSEE IS ALLOWED. ITA NO. 120/JP/2016 SHRI KUMUD CHAND JAIN, HUF VS. ITO, WARD- 3(2) JAIP UR . 4 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12 /09/201 6 SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 12 /09/ 2016 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI KUMUD CHAND JAIN, HUF , JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- 3(2), JAIPUR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 120/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR