SHREE SIDDHIVINAYAK ENTERPRISES, NAVI MUMBAI V. DCIT CEN CIR 39, MUMBAI

ITA 1498/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84381 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-12-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 08-12-2014
• Assessment Year: 2004-2005
• Appeal Filed On: 22-02-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: MATHURIA
• Keywords: Search and seizure; Reasonable cause
• Section: 132; 44AD; 153A

Judgement Text

, , ,, , , ,, , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E MUMBAI , .. , ! BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER AND SHRI B.R.BASKARAN, ACCOUNTANT MEMBER . / ITA NO.1498/MUM/2013 ' ' ' ' #' #' #' #' / ASSESSMENT YEAR: 2004-05 M/S SHREE SIDDHIVINAYAK ENTERPRISES, RH-4, BALAJI KRUPA COMPLEX, PLOT NO.3-A, SECTOR-28, NERUL, NAVI MUMBAI-400707 VS. DEPUTY COMMISSIONER OF INCOME-TAX, CENTRAL CIRCLE- 39, 138, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400707 ( $% / APPELLANT ) ( &'$% / RESPONDENT) P.A. NUMBER : ABQFS9295J $% ( ) / APPELLANT BY: SHRI M.S. MATHURIA &'$% ( ) / RESPONDENT BY : SHRI NEIL PHILIP ( *+ / DATE OF HEARING : 08/12/2014 ,-# ( *+ / DATE OF PRONOUNCEMENT : 08/12/2014 DATE OF ORDER 09/12/2014 O R D E R PER JOGINDER SINGH, JM: THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 07/12/2012 OF THE LD. FIRST APPELLATE AUTHORITY, MUM BAI, SUSTAINING THE IMPOSITION OF PENALTY U/S 271B OF THE INCOME-TA X ACT, 1961. 2 M/S SHREE SIDDHIVINAYAK ENTERPRISES 2. AT THE TIME OF HEARING, THE LD. COUNSEL FOR THE ASSESSEE, SHRI M.S. MATHURIA ADVANCED HIS ARGUMENTS CHALLENGING IMPOSITION/SUSTENANCE OF PENALTY IMPOSED U/S 271B O F THE INCOME- TAX ACT, 1961 (HEREINAFTER THE ACT) BY SUBMITTING THAT THE PENALTY WAS WRONGLY IMPOSED/SUSTAINED WITHOUT CONSIDERING THE F ACTS. RELIANCE WAS PLACED UPON THE DECISION FROM HONBLE APEX COUR T IN HINDUSTAN STEEL LTD. VS STATE OF ORISSA 83 ITR 26 (SC). 2.1. ON THE OTHER HAND, SHRI NEIL PHILIP, LD. DR ST RONGLY DEFENDED THE IMPOSITION AS WELL AS SUSTENANCE OF PENALTY U/S 271 B ON THE GROUND THAT THE ASSESSEE NEITHER GOT ITS ACCOUNT AUDITED N OR FURNISHED THE REPORT AS REQUIRED U/S 44AB OF THE ACT. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND P ERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS, IN BRIEF, ARE THAT A SEARCH AND SEIZURE ACTION U/S 132 OF THE ACT WAS CARRIED OUT I N THE CASE OF SHRI MADAN S. KOLAMBEKAR WHO WAS CARRYING ON THE BUSINES S IN CONSTRUCTION, DEVELOPMENT, BROKERAGE, ESTATE CONSUL TANCY AND LAND & PROPERTIES ETC. MS. KANCHAN M. KOLAMBEKAR, THE SPO USE OF SHRI MADAN S. KOLAMBEKAR IS A PARTNER IN THE ASSESSEE F IRM WHICH IS ALSO CARRYING ON THE BUSINESS OF CONSTRUCTION, DEVELOPME NT AND ESTATE CONSULTANCY ETC. AS PER THE ASSESSEE IN ITS CASE NO INCRIMINATING DOCUMENTS RELATING TO THE BUSINESS WERE FOUND DURIN G THE COURSE OF SEARCH THUS THE ASSESSEE DID NOT FILE ANY STATEMENT DISCLOSING/ADMITTING ANY UNDISCLOSED INCOME/INVESTM ENT. AS PER THE ASSESSEE, IN THE ABSENCE OF A QUALIFIED ACCOUNTANT/ CHARTERED ACCOUNTANT THE ASSESSEE COULD NOT FILE ITS RETURN A ND ALSO COULD NOT GET ITS ACCOUNT AUDITED. THE CLAIM OF THE ASSESSEE IS THAT IMPOSITION OF PENALTY U/S 271B OF THE ACT IS NOT AUTOMATIC AND THE ASSESSING AUTHORITIES ARE EXPECTED TO EXAMINE THE EXPLANATION OF THE ASSESSEE. 3 M/S SHREE SIDDHIVINAYAK ENTERPRISES THE ASSESSEE PLACED RELIANCE UPON THE DECISION IN H INDUSTAN STEEL LTD. VS STATE OF ORISSA (SUPRA). WE NOTE THAT PENA LTY PROCEEDINGS U/S 271B OF THE ACT WAS INITIATED AGAINST THE ASSESSEE VIDE SHOW-CAUSE NOTICE DATED 29/12/2010. THERE WAS NO COMPLIANCE B Y THE ASSESSEE TO THIS NOTICE. ANOTHER NOTICE DATED 10/06/2011 WA S ISSUED TO THE ASSESSEE TO WHICH ALSO THERE WAS NO COMPLIANCE. TH E ASSESSING OFFICER ISSUED NOTICE U/S 271B AS THE ASSESSEE DID NOT COMPLY THE PROVISION OF SECTION 44AB OF THE ACT, THEREFORE, PE NALTY OF RS.70,069/- WAS IMPOSED U/S 271B OF THE ACT, BEING 0.5% OF THE T OTAL SALES OF RS.1,40,13,771/-. IT IS NOTE WORTHY THAT BEFORE T HE LD. COMMISSIONER OF INCOME TAX (APPEALS) AS WELL AS BEFORE THIS TRIB UNAL, THE ASSESSEE FAIRLY AGREED THAT THE REPORT OF AUDIT, AS REQUIRED U/S 44AB OF THE ACT, WAS NOT FILED EVEN TILL THE DUE DATE OF FILING OF R ETURN OF INCOME U/S 139(1) OF THE ACT. IT WAS ALSO ADMITTED THAT THE B OOKS OF ACCOUNT WERE NOT GOT AUDITED BY THE ASSESSEE. WE ARE REPRODUCIN G HEREUNDER THE RELEVANT PROVISION OF SECTION 44AB OF THE ACT WHICH DEALS WITH AUDIT OF ACCOUNTS OF CERTAIN PERSONS CARRYING ON BUSINESS OR PROFESSION: ( A) CARRYING ON BUSINESS SHALL, IF HIS TOTAL SALES, TURNOVER OR GROSS RECEIPTS, AS THE CASE MAY BE, IN BUSINESS EXCEED OR EXCEEDS ONE CRORE RUPEES] IN ANY PREVIOUS YEAR OR (B) CARRYING ON PROFESSION SHALL, IF HIS GROSS RECE IPTS IN PROFESSION EXCEED TWENTY-FIVE LAKH RUPEES IN ANY PREVIOUS YEAR; OR (C) CARRYING ON THE BUSINESS SHALL, IF THE PROFITS AND GAINS FROM THE BUSINESS ARE DEEMED TO BE THE PROFITS AND GAINS OF SUCH PERSON U NDER SECTION 44AE OR SECTION 44BB OR SECTION 44BBB, AS THE CASE MAY BE, AND HE H AS CLAIMED HIS INCOME TO BE LOWER THAN THE PROFITS OR GAINS SO DEEMED TO BE THE PROFITS AND GAINS OF HIS BUSINESS, AS THE CASE MAY BE, IN ANY PREVIOUS YEAR; OR (D) CARRYING ON THE BUSINESS SHALL, IF THE PROFITS AND GAINS FROM THE BUSINESS ARE DEEMED TO BE THE PROFITS AND GAINS OF SUCH PERSON U NDER SECTION 44AD AND HE HAS CLAIMED SUCH INCOME TO BE LOWER THAN THE PROFITS AN D GAINS SO DEEMED TO BE THE PROFITS AND GAINS OF HIS BUSINESS AND HIS INCOME EX CEEDS THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME-TAX IN ANY PREVIO US YEAR, 4 M/S SHREE SIDDHIVINAYAK ENTERPRISES GET HIS ACCOUNTS OF SUCH PREVIOUS YEAR AUDITED BY A N ACCOUNTANT BEFORE THE SPECIFIED DATE AND FURNISH BY THAT DATE THE REPORT OF SUCH AUDIT IN THE PRESCRIBED FORM DULY SIGNED AND VERIFIED BY SUCH ACCOUNTANT AN D SETTING FORTH SUCH PARTICULARS AS MAY BE PRESCRIBED : [ PROVIDED THAT THIS SECTION SHALL NOT APPLY TO THE PERSON, W HO DERIVES INCOME OF THE NATURE REFERRED TO IN SECTION 44B OR SECTION 44 BBA, ON AND FROM THE 1ST DAY OF APRIL, 1985 OR, AS THE CASE MAY BE, THE DATE ON WHICH THE RELEVANT SECTION CAME INTO FORCE, WHICHEVER IS LATER : PROVIDED FURTHER THAT] IN A CASE WHERE SUCH PERSON IS REQUIRED BY O R UNDER ANY OTHER LAW TO GET HIS ACCOUNTS AUDITED , IT SHALL BE SUFFICIENT COMPLIANCE WITH THE PROVISIONS OF THIS SECTION IF SUCH PERSON GETS THE ACCOUNTS OF SUCH BUSINESS OR PROFESSION AUDITED UNDER SUCH LAW BEFORE THE SPECIF IED DATE AND FURNISHES BY THAT DATE THE REPORT OF THE AUDIT AS REQUIRED UNDER SUCH OTHER LAW AND A FURTHER REPORT [BY AN ACCOUNTANT] IN THE FORM PRESCRIBED UN DER THIS SECTION. EXPLANATION.FOR THE PURPOSES OF THIS SECTION , (I) 'ACCOUNTANT' SHALL HAVE THE SAME MEANING AS IN THE EXPLANATION BELOW SUB- SECTION (2) OF SECTION 288; [(II) 'SPECIFIED DATE', IN RELATION TO THE ACCOUNTS OF THE ASSESSEE OF THE PREVIOUS YEAR RELEVANT TO AN ASSESSMENT YEAR, MEANS [THE DUE DATE FOR FURNISHING THE RETURN OF INCOME UNDER SUB-SECTION (1) OF SECTION 139].]] 2.3. IF THE OBSERVATION MADE IN THE ASSESSMENT ORDE R/PENALTY ORDER, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MATERIAL AV AILABLE ON RECORD AND THE ASSERTIONS MADE BY THE LD. RESPECTIVE COUNS ELS, IF KEPT IN JUXTAPOSITION AND ANALYZED, THERE IS NO DISPUTE TO THE FACT THAT AS PER THE PROVISION OF SECTION 44AB OF THE ACT, THE ASSES SEE WAS TO GET ITS ACCOUNT AUDITED AS THE TURNOVER OF THE ASSESSEE WAS RS.1,40,13,771/- (TOTAL SALES) WHICH IS ABOVE THE PRESCRIBED LIMIT O F RS.40 LAKHS. IT IS ALSO A FACT THAT THE ASSESSEE DID NOT GET ITS BOOKS AUDITED BUT MERELY SAID THAT IT WAS A TECHNICAL DEFAULT. THE ASSESSEE EVEN DID NOT FILE THE AUDIT REPORT WITHIN DUE DATE OF FILING OF RETURN U/ S 139(1) OF THE ACT OR ALONGWITH THE RETURN OF INCOME FILED U/S 153A OF TH E ACT. THE ASSESSEE ALSO DID NOT ADDUCE ANY EXPLANATION FOR NO T GETTING THE ACCOUNTS AUDITED OR FILING THE SAME WITH THE RETURN . THEREFORE, IN OUR VIEW, THE ASSESSEE HAS NOT COMPLIED WITH THE PROVIS IONS OF SECTION 44AB OF THE ACT, MORE SPECIFICALLY WHEN THE TOTAL S ALES OF THE ASSESSEE 5 M/S SHREE SIDDHIVINAYAK ENTERPRISES EXCEEDED THE PRESCRIBED MONETARY LIMIT OF RS.40 LAK HS (AS SUBSTITUTED BY THE FINANCE ACT FROM TIME TO TIME AS APPLICABLE T O THE RELEVANT PERIOD), CONSEQUENTLY, WE FIND NO MERIT IN THE SUBM ISSIONS OF THE ASSESSEE. SO FAR AS, RELIANCE UPON THE DECISION IN THE CASE O F HINDUSTAN STEEL LTD. VS STATE OF ORISSA (SUPRA) IS CONCERNED, IN OUR HUMBLE OPINION THE BENEFIT OF THIS DECISION ALSO CANNOT BE EXTENDED TO THE ASSESSEE BECAUSE THE ASSESSEE HAS CLEARLY DEFIED TH E PROVISION OF SECTION 44AB AND IT IS NOT A TECHNICAL BREACH AS HA S BEEN CANVASSED BY THE LD. COUNSEL FOR THE ASSESSEE AND FURTHER NO PLAUSIBLE EXPLANATION HAS BEEN GIVEN BY THE ASSESSEE EVIDENCI NG THAT THERE WAS A REASONABLE CAUSE IN NOT GETTING THE ACCOUNTS AUDI TED, THUS FROM THIS ANGLE ALSO WE FIND NO MERIT IN THE ARGUMENT OF THE ASSESSEE ON THIS COUNT ALSO. THE ORDER OF THE CIT(A) IS UPHELD, RES ULTING INTO, DISMISSAL OF APPEAL OF THE ASSESSEE. FINALLY, APPEAL OF THE ASSESSEE IS DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION O F THE HEARING ON 08/12/2014. SD/- SD/- B.R. BASKARAN JOGINDER SINGH ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED - 09/12/2014 F{X~{T? P.S/. . . . . . . ( (( ( &*/ &*/ &*/ &*/ 0/#* 0/#* 0/#* 0/#* / COPY OF THE ORDER FORWARDED TO : 1. $% / THE APPELLANT 2. &'$% / THE RESPONDENT. 3. 1 ( ) / THE CIT(A)- 6 M/S SHREE SIDDHIVINAYAK ENTERPRISES 4. 1 / CIT 5. /2 &* , , / DR, ITAT, MUMBAI 6. 23' 4 / GUARD FILE. . . . . / BY ORDER, '/* &* //TRUE COPY// 5 55 5 / 6 6 6 6 7 7 7 7 (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI