M/s. Jasarath Educational Society, Hyderabad V. ITO, Ward-9(2), Hyderabad

ITA 1537/HYD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 82479 (ITAT-HYDERABAD)
• Duration Of Justice: 11 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2002-2003
• Appeal Filed On: 20-11-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B RAMA KRISHNA
• Assessee Lawyers: MOHD KHURSHEED ALI
• Keywords: Principle of natural justice; Reasonable cause; Revised return

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A', HYDERABAD BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO.1537/HYD/2013 : ASSESSMENT YEAR 2002 - 03 M/S. JASARATH EDUCATIONAL SOCIETY, HYDERABAD (PAN - AAAAJ 0948 F ) V/S. INCOME TAX OFFICER, WARD 9(2), HYDERABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MOHD. KHURSHEED ALI RESPONDENT BY : SHRI B.RAMAKRISHNA DR DATE OF HEARING 29 . 1 0.2014 DATE OF PRONOUNCEMENT 31.10.2014 O R D E R PER P.M.JAGTAP, ACCOUNTANT MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME - TAX(APPEALS) - 18, MUMBAI, HOLDING CONCURRENT JURISDICTION OF CIT(A) VI,. HYDERABAD DATED 22.8.2013, WHEREBY HE CONFIRMED THE PENALTY OF RS.25,000 IMPOSED BY THE ASSESSING OFFICER UNDER S.271A OF THE ACT FOR THE ASSESSMENT YEAR 2002 - 03. 2. ASSESSEE IN THE PRESENT CASE IS A SOCIETY REGISTERED UNDER THE PROVISIONS OF ANDHRA PRADESH SOCIETIES ACT ON 22 ND MARCH, 1996 AND IT IS ENGAGED IN THE RUNNING OF A SCHOOL. THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION VIZ. ASSESSMENT YEAR 2002 - 03 WAS FILED BY IT ON 15.12.200 4, DECLARING A TOTAL INCOME OF RS .7,500. ASSESSMENT WAS COMPLETED UNDER S.143(3) READ WITH I TA NO. 1537/H YD/20 13 . M/S. J ASARATH EDUCATIONAL SOCIETY, HYDERABAD 2 S/.147 OF THE AC T. DURIN G THE COU R SE OF ASSESSMENT PROCEEDINGS, A STATEMENT OF SHRI H YDER ALI, SECRETARY - CUM - TREASURER OF THE ASSESSEE SOCIETY WAS RECORDED BY THE ASSESSING OFFICER. IN THE SAID STATEMENT, SHRI HYDER ALI ACCEPTED THAT THE ASSESSEE SOCI E TY HAS NO T MAINTAINED ANY BOOKS OF ACCOUNT FOR THE YE A R UNDER CONSIDERATION , AS REQUIRED BY THE P R OVISIONS OF S.44AA OF THE AC T. THE ASSESSING OFFICER TH E R E FORE, I N I TI ATED PENALTY P R O CE EDIN G S UNDER S.271 A AND IN REPLY TO THE SHOW CAUSE NOTICE ISSUED BY THE ASSESSING OFFICER DURING THE COU R SE OF THE SAID PROCEEDINGS, IT WAS SUBMITTED BY THE ASSESSEE THAT INCOME AND EXPENDITURE ACCOUN T WAS MAINTAINED BY IT ON THE BASIS O F WHICH RETURN OF IN C OM E FOR THE Y E AR UNDER CONSIDERATION WAS FIL E D. IT WAS CONTENDED THAT THE QUESTION OF NON - MAINTENANCE OF BOOK S O F ACCOUNT THUS DOES NOT HOLD GOOD AND PENALTY PROCEEDINGS INITIATED UNDER S.271A MAY B E DROPPED. THIS EXPLANATION OF TH E ASSESSEE WAS NO T FOUN D ACCEPTABL E BY TH E ASSESSING OFFICER . ACCO RD ING TO HIM, THERE WAS FAILURE ON THE P A RT OF THE ASSESSEE TO P R O D U C E THE BOOKS O F AC C OUNT ALONGWITH VOUCHERS IN SPI TE OF SUFFICIENT OPPOR T UNITY AFFOR D ED TO DO SO. HE ALSO NO T ED THAT IN HIS STATEMENT, SHRI HYDER ALI , S E CRE T ARY - CUM - TR E ASURER OF THE ASSESSEE SOCIETY HAD CATEGORICALLY ACCEPTED OF HAVING NOT MAINTAIN E D ANY BO O KS OF ACCOUNT BY THE ASSESSEE S OCI E TY. HE ALSO STA TED TH A T EVEN COLLECTION LIST SHOWING COLLECTION OF FEE OF R S .16,01,429 COULD NOT BE PRODUCED BY TH E ASSESSEE O N TH E PRETEXT THAT IT WAS DESTROYED. SIN CE THE GROSS RECEIPTS OF TH E ASSESSEE IN THE Y EA R UNDER CONSIDERATION EXCEED ED R S . 10 LAKHS, AN D NO BOOKS OF ACCOUNT W E RE MAINTAINED BY IT, AS R E QUIR E D BY THE P R O V I SI ON S OF S.44AA OF THE ACT, THE ASSESSING OFFICER HELD TH AT THE ASSESSEE WAS LIABLE FOR PENALTY UNDER S.,271A OF THE AC T. ACCOR D INGLY, PENALTY OF R S .25,000 WAS IMPOSE D BY TH E ASSESSING OFFICER UNDER S.271A. I TA NO. 1537/H YD/20 13 . M/S. J ASARATH EDUCATIONAL SOCIETY, HYDERABAD 3 3. THE PENALTY IMPOSED BY THE ASSESSING OFFICER UNDER S.271A WAS CHALLENGED BY THE A SSESSEE IN AN APPEAL FILED BEFORE THE LEARNED CIT(A) AND THE FOLLOWING SUBMISSION WAS MADE ON ITS BEHALF BEFORE THE LEARNED CIT(A) - THE RETURN WAS FILED BY THE ASSESSEE BUT DUE TO OVERSIGHT MISTAKE OF TYPING THE SALARIES OF STAFF WAS MENTIONED AS RS.3,7 1,389/ - AND GRAND TOTAL WAS MENTIONED AS RS.16,01,429/ - . ON THIS TYPOGRAPHICAL MISTAKE OF RS.7,00,000/ - A REVISED RETURN WAS FILED BY THE ASSESSEE WITHIN A PERIOD OF ONE YEAR AND THERE WAS NO CHANGE IN GRAND TOTAL AND ALSO REQUESTED THAT THIS MISTAKE MAY PLEASE BE IGNORED. THE ITO HAS NOT ACCEPTED THIS EXPLANATION OF THE ASSESSEE AND HAS PASSED THE ORDER WHICH IS CONTRARY TO LAW AND AGAINST THE NATURAL JUSTICE. 3. THE LEARNED CIT(A) DID NOT FIND MERIT IN THE SUBMISSION OF THE ASSESSEE AND CONFIRMED T HE PENALTY IMPOSED BY THE ASSESSING OFFICER UNDER S.271 A FOR THE FOLLOWING REASONS GIVEN IN PARAGRAPH 1.3 OF HIS IMPUGNED ORDER - 1.3 I HAVE CONSIDERED THE SUBMISSIONS OF THE APPELLANT, ORDER OF THE A.O. AND FACTS OF THE CASE CAREFULLY. IT IS NOTICED THA T DURING THE ASSESSMENT PROCEEDINGS, A.O. HAS SPECIFICALLY CALLED FOR BOOKS OF ACCOUNT AND STATEMENT OF SHRI HYDER ALI, SECRETARY - CUM - TREASURER WAS RECORDED U/S. 131. HE HAS STATED THAT NO BOOKS OF ACCOUNT ARE MAINTAINED, THEREFORE, THE A.O. ISSUED SHOW - C AUSE NOTICE TO EXPLAIN AS TO WHY PENALTY U/S. 271A MAY NOT BE LEVIED. AFTER CONSIDERING REPLY OF THE APPELLANT, THE A.O. HAS LEVIED PENALTY OF RS.25,000/ - . ON THE OTHER HAND, THE APPELLANT HAS SUBMITTED THE SAME REPLY AS BEFORE THE A.O. AND NO REASONS WER E GIVEN IN NOT MAINTAINING BOOKS OF ACCOUNT AND FURTHER TO KNOW THAT THE REGISTER MAINTAINED WAS ALSO DESTROYED AND THERE WAS NO BASIS FOR THE INCOME AND EXPENDITURE ACCOUNT PREPARED AND SUBMITTED ALONG WITH RETURN. I TA NO. 1537/H YD/20 13 . M/S. J ASARATH EDUCATIONAL SOCIETY, HYDERABAD 4 FROM THE PERUSAL OF THE SUBMISSIONS AN D FACTS, IT IS CLEAR THAT THE ASSESSEE HAS SNOT MAINTAINED THE BOOKS OF ACCOUNT AS PER PROVISIONS OF SEC.44AA OF THE I.T. ACT. MOREOVER, THE SO CALLED REGISTER MAINTAINED FOR COMPUTING THE INCOME AND EXPENDITURE ACCOUNT AS SUBMITTED ALONG WITH RETURN, IT WAS STATED THAT THEY WERE ALSO DESTROYED. THUS, FACTS PROVE THAT NEITHER THE ASSESSEE MAINTAINED RECORDS, LEDGER, CASH BOOK ETC., NOR ANY REGISTER FOR PREPARING THE INCOME AND EXPENDITURE ACCOUNT. THUS, IT IS A FIT CASE FOR LEVYING PENALTY U/S. 271A, THER EFORE, THE PENALTY LEVIED OF RS.25,000/ - BY THE A.O. IS UPHELD AND GROUND OF APPEAL IS DISMISSED. AGGRIEVED BY THE ORDER OF THE LEARNED CIT(A), ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES A ND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT NEITHER BEFORE THE AUTHORITIES BELOW NOR EVEN BEFORE US, THE ASSESSEE HAS BEEN ABLE TO ADVANCE ANY REASONABLE CAUSE FOR ITS FAILURE TO MAINTAIN THE BOOKS OF ACCOUNT AS REQUIRED BY THE PR OVISIONS OF S.44AA OF THE ACT. THE ONLY CONTENTION RAISED BY HE LEARNED COUNSEL FOR THE ASSESSEE AT THE TIME OF HEARING BEFORE US IS THAT THE YEAR UNDER CONSIDERATION BEING THE FIRST YEAR OF ITS OPERATION, THE CASE OF THE ASSESSEE IS NOT COVERED BY CLAUSE (I) OF SUB - SECTION (2) OF S.44AA, AND IT WAS, THEREFORE, NOT REQUIRED TO MAINTAIN THE BOOKS OF ACCOUNT. SUB - CLAUSE (I) ALONGWITH SUB - CLAUSE (II), BEING RELEVANT IN THE PRESENT CONTEXT, ARE EXTRACTED BELOW - 44AA. (1) EVERY PERSON CARRYING ON LEGAL, MEDICAL, ENGINEERING OR ARCHITECTURAL PROFESSION OR THE PROFESSION OF ACCOUNTANCY OR TECHNICAL CONSULTANCY OR INTERIOR DECORATION OR ANY OTHER PROFESSION AS IS NOTIFIED 4 BY THE BOARD IN THE OFFICIAL GAZETTE SHALL KEEP AND MAINTAIN SUCH BOOKS OF ACCOUNT AND OTHER DOCUMENTS AS MAY ENABLE THE ASSESSING OFFICER TO COMPUTE HIS TOTAL INCOME IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT. I TA NO. 1537/H YD/20 13 . M/S. J ASARATH EDUCATIONAL SOCIETY, HYDERABAD 5 (2) EVERY PERSON CARRYING ON BUSINESS OR PROFESSION NOT BEING A PROFESSION REFERRED TO IN SUB - SECTION (1) SHALL, ( I ) IF HIS INCOME FROM BUSINESS OR PROFESSION EXCEEDS ONE LAKH TWENTY THOUSAND RUPEES OR HIS TOTAL SALES, TURNOVER OR GROSS RECEIPTS, AS THE CASE MAY BE, IN BUSINESS OR PROFESSION E XCEED OR EXCEEDS TEN LAKH RUPEES IN ANY ONE OF THE THREE YEARS IMMEDIATELY PRECEDING THE PREVIOUS YEAR; OR ( II ) WHERE THE BUSINESS OR PROFESSION IS NEWLY SET UP IN ANY PREVIOUS YEAR, IF HIS INCOME FROM BUSINESS OR PROFESSION IS LIKELY TO EXCEED ONE LAKH TW ENTY THOUSAND RUPEES OR HIS TOTAL SALES, TURNOVER OR GROSS RECEIPTS, AS THE CASE MAY BE, IN BUSINESS OR PROFESSION ARE OR IS LIKELY TO EXCEED 9 [TEN LAKH] RUPEES, DURING SUCH PREVIOUS YEAR; OR ( III ) (IV) .. KEEP AND MAINTAIN SUCH BOOKS OF ACCOUNT AND OTHER DOCUMENTS AS MAY ENABLE THE ASSESSING OFFICER TO COMPUTE HIS TOTAL INCOME IN ACCORDANCE WITH THE PROVISIONS OF THIS ACT. . IT IS CLEARLY EVIDENT FROM THE RELEVANT PROVISIONS EXTRACTED ABOVE THAT THE CASE OF THE ASSESSEE IS COVERED BY CLAUSE (II) OF SUB - SECTION (2) OF S.44A, AND I TS TOTAL GROSS RECEIPTS HAVING EXCEEDED RS.10 LAKHS DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE WAS REQUIRED TO MAINTAIN THE BOOKS OF ACCOUNT AS PER THE PROVISIONS OF S.44AA. SINCE THE ASSESSEE HAS FAILED TO MAINTAIN BOOKS OF ACCOUNT AS REQUIRED BY THE PROVISIONS OF S.44AA, AND THERE IS NO REASONABLE CAUSE ADVANCED OR PROVED BY THE ASSESSEE FOR S UCH FAILURE, WE ARE OF THE VIEW THAT THE ASSESSEE IS LIABLE FOR PENALTY UNDER S.271A, AS RIGHTLY HELD BY THE AUTHORITIES BELOW. IN THAT VIEW OF THE MATTER, WE UPHOLD THE IMPUGNED ORDER OF THE LEARNED CIT(A) CONFIRMING THE PENALTY IMPOSED BY THE ASSESSING OFFICER UNDER S.271A OF THE ACT, AND DISMISS THIS APPEAL OF THE ASSESSEE. I TA NO. 1537/H YD/20 13 . M/S. J ASARATH EDUCATIONAL SOCIETY, HYDERABAD 6 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 31 ST OCT OBER, 2014 SD/ - SD/ - ( SAKTIJIT DEY ) ( P.M.JAGTAP ) JUDICIAL MEMBER ACCOUNTANT MEMBER D T/ - 31 ST OCTOBER, 2014 COPY FORWARDED TO: 1. M/S. JASARATH EDUCATIONAL SOCIETY, H.NO.20 - 4 - 209/8, HIMMATPURA, NEW SHAH ALI BANDA ROAD, HYDERABAD 2 . INCOME TAX OFFICER WARD 9(2), HYDERABAD 3. 4. COMMISSIONER OF INCOME - TAX(APPEALS) 18 MUMBAI COMMISSIONER OF INCOME - TAX(APPEALS) VI, HYDERABAD COMMISSIONER OF INCOME - TAX V, HYDERABAD 5. DEPARTMENTAL REPRESENTATIVE, ITAT, HYDERABAD. B.V.S