The Ludhiana Improvement Trust, Ludhiana V. DCIT, Ludhiana

ITA 122/CHANDI/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 77018 (ITAT-CHANDIGARH)
• Duration Of Justice: 3 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 07-04-2014
• Assessment Year: 2003-2004
• Appeal Filed On: 31-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMARVEER SINGH
• Section: 12AA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R. SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 121 & 122/CHD/2011 ASSESSMENT YEARS : 2003-04 THE LUDHIANA IMPROVEMENT VS. D.C.I.T. CIRCLE VI TRUST, FEROZE GANDHI LUDHIANA MARKET, LUDHIANA AAATL 4452 F (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI ASHWANI KUMAR RESPONDENT BY: SHRI A MARVEER SINGH DATE OF HEARING 7.4.2014 DATE OF PRONOUNCEMENT 21.4.2014 O R D E R PER T.R. SOOD, A.M THESE APPEALS ARE DIRECTED AGAINST THE ORDER DATED 18.11.2010 OF THE LD. COMMISSIONER OF INCOME TAX (A )--II, LUDHIANA. THESE APPEALS WERE HEARD TOGETHER AND AR E BEING DISPOSED OFF BY THIS COMMON ORDER FOR THE SAKE OF C ONVENIENCE. ITA NO. 121/CHD/2011 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLO WING GROUND: THAT ORDER PASSED U/S 250(6) BY THE LD. CIT(A)-II, LUDHIANA IS AGAINST LAW AND FACTS ON THE FILE IN AS MUCH AS HE WAS NOT JUSTIFIED TO ARBITRARILY UPHOLD THE PENALTY LEVIED U/S 271A A T RS. 25,000/- BY THE DCIT, CIRCLE-VI, LUDHIANA. 3 DURING ASSESSMENT PROCEEDINGS IT WAS NOTICED THAT THE ASSESSEE IS NOT MAINTAINING PROPER BOOKS OF ACCOUNT S AND THEREFORE PENALTY PROCEEDINGS U/S 271A WERE INITIAT ED. IN RESPONSE TO THE SHOW CAUSE NOTICE FOR LEVY OF PENAL TY U/S 271A IT WAS MAINLY STATED THAT THE BOOKS OF ACCOUNTS WER E BEING MAINTAINED AND WERE PRODUCED BEFORE THE ASSESSING O FFICER. 2 SOME CASE LAWS WERE RELIED. HOWEVER, THE ASSESSIN G OFFICER OBSERVED THAT THE BOOKS OF ACCOUNTS MAINTAINED BY T HE ASSESSEE DID NOT REFLECT THE PARTICULARS OF INCOME AND THEREFORE HE LEVIED A PENALTY OF RS. 25,000. 4 ON APPEAL THE ACTION OF THE ASSESSING OFFICER HAS BEEN CONFIRMED BY THE LD. CIT(A). 5 BEFORE US. THE LD. COUNSEL FOR THE ASSESSEE SUBMI TTED THAT IN THIS CASE THE TRIBUNAL HAS ALREADY REMITTED THE MATTER BACK TO THE FILE OF LD. CIT FOR RECONSIDERATION OF THE ISSUE OF REGISTRATION U/S 12AA(1)(B)(1) FOR REGISTRATION OF ASSESSEE AS CHARITABLE SOCIETY. IF THE ASSESSEE IS HELD TO BE A CHARITABLE SOCIETY THEN THERE IS NO NEED TO MAINTAIN THE BOOKS OF ACCOUNTS AND NO PENALTY WOULD BE LEVIABLE. 6 ON THE OTHER HAND, THE LD. D.R. FOR THE REVENUE SUPPORTED THE ORDER OF THE LD. COMMISSIONER OF INCO ME TAX (A). 7 AFTER CONSIDERING THE RIVAL SUBMISSIONS WE FIND T HAT IN RESPECT OF THE ISSUE OF REGISTRATION THE ISSUE HAS BEEN SET ASIDE BY THE TRIBUNAL IN ITA NO. 220/CHD/2008 FOR RECONSIDERATION. FURTHER PENALTY US/ 271A CAN BE L EVIED ONLY IF THE BOOKS OF ACCOUNTS HAVE NOT BEEN MAINTAINED AS R EQUIRED U/S 44AA BUT THE PROVISIONS OF SECTION 44AA ARE APP LICABLE ONLY TO THE PERSONS WHO ARE CARRYING THE BUSINESS OR PRO FESSION. THEREFORE IF THE ASSESSEE IS HELD TO BE A CHARITABL E ORGANIZATION THEN THE PROVISIONS OF SECTION 44A AND 271A WOULD NOT BE APPLICABLE, THEREFORE IN THE INTEREST OF JUS TICE WE SET ASIDE THIS ORDER AND REMIT THE MATTER BACK TO THE F ILE OF ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE IS SUE AFRESH AFTER THE ISSUE REGARDING REGISTRATION OF THE ASSES SEE U/S 12AA IS ADJUDICATED. 3 7. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 121/CHD/2011 IS ALLOWED FOR STATISTICAL PURPOSES ON LY. ITA NO. 122/CHD/2011 8 IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLLOW ING GROUND: THAT ORDER PASSED U/S 250(6) BY THE LD. CIT(A)-II, LUDHIANA IS AGAINST LAW AND FACTS ON THE FILE IN AS MUCH AS HE WAS NOT JUSTIFIED TO ARBITRARILY UPHOLD THE PENALTY LEVIED U/S 271B A T RS.1,00,000/- BY THE DCIT, CIRCLE-VI, LUDHIANA. 9 THE FACTS AND CONTENTIONS OF BOTH THE PARTIES REM AIN SAME EXCEPT FOR THE DIFFERENCE THAT PENALTY HAS BEEN LEV IED U/S 271B OF THE ACT. 10 BOTH THE PARTIES WERE HEARD. 11 AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE MATERIAL ON RECORD, WE FIND THAT THE PROVISIONS OF SECTION 271B ARE APPLICABLE IF THERE IS FAILURE ON THE PART OF THE A SSESSEE TO GET THE ACCOUNTS AUDITED. AS OBSERVED EARLIER IN CASE OF PENALTY U/S 271A IN ABOVE NOTED PARAS, SECTION 44AB ALSO AP PLIES ONLY IF THE ASSESSEE IS CARRYING OUT THE BUSINESS. THER EFORE IF THE ASSESSEE IS CARRYING OUT CHARITABLE ACTIVITIES THE SEC 271B R.W.S. 44AB WOULD NOT BE APPLICABLE. THEREFORE IN THE INTEREST OF JUSTICE WE SET ASIDE THIS ORDER AND REMIT THE SA ME TO THE FILE OF THE ASSESSING OFFICER WITH A DIRECTION TO DECIDE THE SAME AFRESH AFTER ISSUE REGARDING REGISTRATION U/S 12AA IS DECIDED. 12 IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO . 122/CHD/2011 IS ALLOWED FOR STATISTICAL PURPOSES ON LY. 13 IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 21.4.2014 SD/- SD/- (SUSHMA CHOWLA) (T.R. SOOD) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 21.4.2014 SURESH COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT/THE C IT(A)/THE DR 4