J.Geetha, Coimbatore V. ITO, Coimbatore

ITA 1601/CHNY/2013

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 68792 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-10-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 22-10-2013
• Assessment Year: 2006-2007
• Appeal Filed On: 26-07-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T N BETGIR I IRS

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI BEFORE DR. O.K.NARAYANAN, VICE-PRESIDENTAND SHRI V, DURGA RAO, JUDICIAL MEMBER ITA NO. 1601(MDS)/2013 ASSESSMENT YEAR : 2006-07 SMT. J. GEETHA, 92, SAKTHI NIVAS, ASHOK NAGAR, COIMBATORE 641 001. PAN : ADVPG 9061 B V. THE INCOME TAX OFFICER, WARD III(3), COIMBATORE. (APPELLANT) (RESPONDENT) APPELLANT BY : NONE RESPONDENT BY : SHRI T.N. BETGIR I, IRS, JCIT DATE OF HEARING : 22 ND OCTOBER, 2013 DATE OF PRONOUNCEMENT : 22 ND OCTOBER, 2013 O R D E R PER DR.O.K.NARAYANAN, VICE-PRESIDENT THIS APPEAL FILED BY THE ASSESSEE RELATES TO ASSE SSMENT YEAR 2006-07. THE APPEAL IS DIRECTED AGAINST THE ORDER O F COMMISSIONER OF INCOME TAX (APPEALS)-I AT COIMBATORE, DATED 9.5. 2013. THE APPEAL ARISES OUT OF THE ORDER PASSED UNDER SECTION 271A OF INCOME-TAX ACT, 1961, IMPOSING A PENALTY OF ` 25,000/-. THE PENALTY UNDER SECTION 271A IS LEVIED FOR NON-MAINTE NANCE OF BOOKS 2 I.T.A. NO. 1601/MDS/13 OF ACCOUNT AS REQUIRED UNDER SECTION 44AA SUB-SECTI ON (2) OF INCOME-TAX ACT, 1961. 2. THE ASSESSEE IS AN INDIVIDUAL, DERIVING INCOME F ROM GOLDSMITH WORK. THE ASSESSEE EXPLAINED BEFORE THE ASSESSING OFFICER THAT SHE DID NOT MAINTAIN REGULAR BOOKS OF ACCOUNT FOR THE REASON THAT IN THE PRECEDING THREE ASSESSMENT YEARS , HER INCOME WAS BELOW TAXABLE LIMIT AND THERE WAS NO OCCASION T O FILE RETURNS OF INCOME AND SO ALSO HER BUSINESS WAS A VERY SMALL VE NTURE. BUT, THESE EXPLANATIONS WERE DISMISSED BY THE ASSESSING OFFICER. IN FIRST APPEAL ALSO, THE COMMISSIONER OF INCOME TAX (APPEAL S) GRACEFULLY AGREED WITH THE FINDINGS OF THE ASSESSING OFFICER A ND CONFIRMED THE PENALTY. THE ASSESSEE IS AGGRIEVED AND THEREFORE, THE SECOND APPEAL BEFORE US. 3. WHEN THE CASE WAS CALLED ON FOR HEARING, NOBODY WAS PRESENT FOR THE ASSESSEE INSPITE OF SERVICE OF NOTI CE. THEREFORE, WE PROCEEDED TO DISPOSE OF THE MATTER EX PARTE , QUA , THE ASSESSEE. 4. WE HEARD SHRI T.N. BETGIRI, THE LEARNED JOINT CO MMISSIONER OF INCOME TAX, APPEARING FOR THE REVENUE. 5. THE ASSESSEE, IN THE PRESENT CASE, IS A SMALL-TI ME GOLDSMITH. THE IMPUGNED ASSESSMENT YEAR IS 2006-07. THE PAST HISTORY OF THE 3 I.T.A. NO. 1601/MDS/13 ASSESSEE SPEAKS OUT THAT THE ASSESSEE HAD NO TAXABL E INCOME FOR THOSE ASSESSMENT YEARS. THAT ITSELF MAY NOT BE SUF FICIENT REASON TO JUSTIFY THE NON-MAINTENANCE OF BOOKS OF ACCOUNT. B UT, STILL IT IS A STRONG GROUND WHICH SUPPORTS THE EXPLANATION OFFERE D BY THE ASSESSEE. INSPITE OF THESE BIG CASES MADE OUT BY T HE ASSESSING OFFICER, THE ADDITION MADE IN THE ASSESSMENT YEAR I S JUST A SUM OF ` 30,000/-. THE TOTAL INCOME DETERMINED, INSPITE OF ADDITION, IS ` 1,58,350/- RESULTING IN A TAX DEMAND OF ` 3,230/- AND IT IS AGAINST SUCH A NOMINAL ASSESSMENT THAT THE ASSESSING OFFICE R HAS LEVIED A PENALTY OF ` 25,000/-. 6. IT IS A SETTLED LAW THAT AN ASSESSMENT IS REGULA R BUT PENALTY IS EXCEPTIONAL. THE ASSESSEE BEING A SMALL-TIME GOLDS MITH, AND THE NATURE OF BUSINESS BEING NOT COMPLEX, THE MAINTENAN CE OF FULL- FLEDGED ACCOUNTS COULD BE EXCUSED ATLEAST FOR ONCE. IN SUCH CIRCUMSTANCES, IMPOSING A PUNISHMENT BY WAY OF PENA LTY TO THE EXTENT OF ` 25,000/- IS QUITE ARBITRARY. 7. LEVY OF PENALTY SHOULD NOT BE AUTOMATIC AND AS A MATTER OF FACT, SECTION 271A IS USUALLY APPLIED IN VERY EXCEP TIONAL AND IN MOST GLARING CASES ALONE. 4 I.T.A. NO. 1601/MDS/13 8. IN THESE CIRCUMSTANCES, WE ARE OF THE CONSIDERED VIEW THAT THE LEVY OF PENALTY IN THE PRESENT CASE, UNDER SECT ION 271A, IS NOTHING BUT AN EXCESS. IT IS, THEREFORE, DELETED . 9. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT AT THE TIME OF H EARING ON TUESDAY, THE 22 ND OCTOBER, 2013 AT CHENNAI. SD/- SD/- (V. DURGA RAO) (DR. O. K.NARAYANAN) JUDICIAL MEMBER VICE-PRESIDENT CHENNAI, DATED, THE 22 ND OCTOBER, 2013. KRI. COPY TO: 1. APPELLANT 2. RESPONDENT 3. CIT-I, COI MBATORE 4. CIT(A)-I, COIMBATORE 5. DR 6. GF.