Sridhar Pitla, Nizamabad, Hyderabad V. ITO, Ward-2, Nizamabad, Nizamabad

ITA 167/HYD/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 2626 (ITAT-HYDERABAD)
• Duration Of Justice: 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 02-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N SWAPNA
• Assessee Lawyers: K HANMANDLOO
• Keywords: Rejection of books of accounts; Opportunity of being heard
• Section: 147

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH B, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI S. RIFAUR RAHMAN, ACCOUNTANT MEMBER ITA NO. 167/HYD/2017 ASSESSMENT YEAR: 2012-13 SRIDHAR PITLA, NIZAMABAD PAN AAAPY 7292G VS. INCOME-TAX OFFICER, WARD 2, NIZAMABAD. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K. HANMANDLOO REVENUE BY : SMT. N. SWAPNA DATE OF HEARING : 22-08-2017 DATE OF PRONOUNCEMENT : 30-08-2017 O R D E R PER S. RIFAUR RAHMAN, A.M.: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX(A) - 5, H YDERABAD, DATED 30-11-2016 FOR AY 2012-13. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT THE ASSE SSEE WAS CARRYING ON A BUSINESS OF CIVIL WORKS CONTRACTS AND FILED HI S RETURN OF INCOME ON 30/09/2012. THE ASSESSMENT WAS COMPLETED BY ESTI MATING THE INCOME @8% OF THE GROSS RECEIPTS BASED ON FORM 26AS STATEMENT. THE ASSESSEE HAD DISCLOSED RS. 1,44,93,461/-, WHERE AS THE 26AS STATEMENT SHOWS RECEIPTS OF RS. 1,92,55,392. THUS, THE AO OPINED THAT THE ASSESSEE HAD SUPPRESSED RECEIPTS TO THE TU NE OF RS. 47,61,931/-. ACCORDINGLY, AO INITIATED PROCEEDINGS U/S 147 AND ISSUED NOTICE U/ 148 ON 31/07/2014 TO THE ASSESSEE. AFTER REJECTING THE CONTENTION OF THE ASSESSEE, AO ESTIMATED THE INCOME @ 8% OF GROSS 2 ITA NO. 167/H/17 SRIDHAR PITLA, NIZAMABAD RECEIPTS (RS. 1,92,55,392/-), WHICH AMOUNTS TO RS. 15,40,431/-, BY OBSERVING AS UNDER: THE ASSESSEE HAD ADMITTED VIDE HIS LETTER DATED 02/ 03/2015 THAT THERE IS A DIFFERENCE IN RECEIPTS AS ADMITTED AND THE RECEIPTS AS REFLECTED IN 26AS STATEMENT. 2.1 THEREAFTER, THE AO INITIATED PENALTY PROCEEDING S U/S 271(1)(C) ON THE GROUND OF CONCEALMENT OF INCOME AND LEVIED A PENALTY OF RS. 2,51,236/-. 3. AGGRIEVED BY THE ORDER OF THE AO, THE ASSESSEE P REFERRED AN APPEAL BEFORE THE CIT(A) AND SUBMITTED AS UNDER: 1. THE APPELLANT SUBMITS THAT HE HAS FILED TRUE PAR TICULARS OF CONTRACT RECEIPTS FOR THE FINANCIAL YEAR 01.04.2011 TO 31.03.2012 PERTAINING TO ASSESSMENT YEAR 2012-13 BA SED ON TDS CERTIFICATES ISSUED BY THE RESPECTIVE DEPARTMEN TS. THE ASSESSMENT WAS COMPLETED ON 18.03.2015 BY THE INCOM E TAX OFFICER, WARD-2, NIZAMABAD AFTER MAKING AN ADDITION OF INCOME @ 8% ON RS. 47,61,931/ - AS UNREPORTED CONTRACT REC EIPTS, REJECTED THE BOOKS OF ACCOUNTS AND ESTIMATED INCOME@8%ONTOTAL GROSS RECEIPTS INCLUDING THE ABOV E SAID DISPUTED RECEIPTS OF RS., 47,61,931/- . 2. THE ASSESSING OFFICER ALSO INITIATED PENALTY PR OCEEDINGS U/S. 271(1)(C) AND LEVIED PENALTY OF RS. 2,51,236/- AS 1 00% OF TAX ON ADDITION MADE TO THE INCOME RETURNED. IN THIS RE GARD THE APPELLANT SUBMITS THAT THERE WERE SO MANY CORRECTI ONS MADE BY THE GOVERNMENT DEPARTMENTS WHO HAVE GIVEN CONTRACTS . AS PER THE 26AS AS ON 29.12.2012, THE GROSS RECEIPTS WERE 1,25,30,686/- AND ENHANCED TO RS. 1,68,59,492/- ON 12.03.2015 ( AT THE TIME OF PENAL PROCEEDINGS LEVIED) BUT THE LATEST 26AS DT. 21.10.2016 DISCLOSES GROSS TURNOVER OF RS, 1,47,66, 055/- AS AGAINST GROSS TURNOVER REPORTED AS PER RETURN OF IN COME WAS RS. 1,44,93,461/-, HENCE THE DIFFERENCE WAS RS. 2,72,59 4/- ONLY. AS AGAINST THE DISPUTED TURNOVER OF RS. 47,61,931/- AS PER ASSESSMENT ORDER. 3. THE APPELLANT ALSO DISCLOSED A TURNOVER OF RS. 1 1,62,775/- FROM ANDHRA PRADESH VIDYA VIDAN PARISHAD AND RS. 8, 00,000/- FROM AP WAKF BOARD WHICH WORKS OUT TO RS. 19,62,775 /-. THE 26AS NOT DISCLOSED THE SAID TRANSACTIONS. IT IS INF ORMED THAT THE SAID CONTRACT PAYMENTS WERE MADE FROM ENGINEERING D IVISION, RAJENDRA NAGAR AND OTHER DEPARTMENTS THROUGH STATE INTERNAL 3 ITA NO. 167/H/17 SRIDHAR PITLA, NIZAMABAD PAYMENT ADJUSTMENTS. HENCE THERE WAS NO SUBSTANTIAL CONCEALMENT OF GROSS RECEIPTS AND INCOME THEREON. 4. THE ASSESSMENT WAS COMPLETED SINCE IT WAS TIME B ARRED BY 31.03.2015. HENCE, THE CORRECT 26AS COULD NOT BE PR ODUCED DURING ASSESSMENT PROCEEDINGS. 4. THE CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AS WELL AS REFERRING THE PROVISIONS OF SECTION 271( 1)(C), CONFIRMED THE PENALTY LEVIED BY THE AO. 5. AGGRIEVED BY THE ORDER OF THE CIT(A), THE ASSESS EE IS IN APPEAL BEFORE US RAISING THE FOLLOWING GROUNDS OF APPEAL: 1. THE COMMISSIONER OF INCOME TAX (APPEALS)-5, HYDE RABAD HAS CONFIRMED THE PENALTY REJECTING CONTENTION OF T HE ASSESSEE EVEN AFTER FILING THE FRESH 26AS AFTER RATIFICATION BY STATE GOVERNMENT DEPARTMENTS. 2. THE ASSESSMENT WAS COMPLETED ON ESTIMATION BASIS @ 8% ON GROSS RECEIPTS WHICH WAS AGREED TO HAVE AMICABLE SO LUTION WHICH DOES NOT MEAN INTENTIONAL OMISSION OF THE GRO SS TURNOVER DIFFERENCE WHICH WAS DUE TO INTER DEPARTMENTS ADJUS TS BY STATE GOVERNMENT. 3. THE DIFFERENCE IN GROSS RECEIPTS AS PER 26AS AND BOOKS WAS DUE TO ADJUSTMENT, CORRECTIONS, RATIFICATION MADE B Y THE STATE GOVERNMENT DEPARTMENT VERY FREQUENTLY .THERE WAS NO INTENTION TO SUPPRESS THE GROSS RECEIPTS FOR TAX EVASION. LAT ER ON THE STATE GOVERNMENT DEPARTMENTS HAS RECTIFIED WHICH RE FLECTED IN LATEST 26AS. 4. THE APPELLANT DID NOT FILE ANY WRONG PARTICULARS OF INCOME INTENTIONALLY LATEST GROSS DIFFERENCE WAS ONLY RS 2 ,72,594 BUT NOT 22,75,937/-. WHICH IS EVIDENCE FROM LATEST 26AS . 5. THE DIFFERENCE BETWEEN INCOME ASSESSED AND EXCES S TDS WAS RS.6,356/- EVEN AFTER ESTIMATION OF INCOME, HEN CE THERE WAS NO INTENTION TO EVADE INCOME TAX. FOR THE REASONS ABOVE SAID AND ANY OTHER GROUND(S) SHOWN AT THE TIME OF HEARING, THE APPELLANT REQUESTS HON'BLE INCOME TAX APPELLATE TRIBUNAL, HYDERABAD TO DELETE THE PENALTY LEVIED. 4 ITA NO. 167/H/17 SRIDHAR PITLA, NIZAMABAD 6. BEFORE US, THE LD. AR OF THE ASSESSEE SUBMITTED THAT AS THE ASSESSEE IS DEALING WITH STATE GOVERNMENT DEPARTMEN TS, THERE WERE SOME CORRECTIONS MADE BY THE GOVT. DEPARTMENTS WHO HAD GIVEN CONTRACTS. HE SUBMITTED THAT AS PER 26AS AS ON 29/1 2/2012 (REFER PAGE 29 OF PAPER BOOK FILED ON 02/05/2017), THE GRO SS RECEIPTS WERE RS. 1,25,30,686/- AND ENHANCED TO RS. 1,68,59,492/- ON 12/03/2015 (AT THE TIME OF ASSESSMENT PROCEEDINGS REFER PAGE 27 OF PAPER BOOK FILED ON 02/05/2017) BUT THE LATEST 26AS DATED 21/1 0/2016 (REFER PAGE 24 OF PAPER BOOK FILED ON 21/10/2016) DISCLOSED THE GROSS TURNOVER OF RS. 1,47,66,055/- AS AGAINST GROSS TURNOVER REPORTE D AS PER RETURN OF INCOME WAS RS. 1,44,93,461/- (REFER PAGE 14 OF PAPE R BOOK FILED ON 02/05/2017). THE AR, THEREFORE SUBMITTED THAT THE D IFFERENCE WAS RS. 2,72,594/- AS AGAINST THE DISPUTED TURNOVER OF RS. 47,61,931/- AS PER LATEST 26AS. THUS, THE LD. AR SUBMITTED THAT THE IN TENTION OF THE ASSESSEE WAS NOT CONCEALMENT OF PARTICULARS OF INCO ME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME AND THE INTENTI ON OF THE ASSESSEE WAS TO COOPERATE WITH THE DEPARTMENT AND ACCEPTED T HE QUANTUM PROCEEDINGS SINCE THE 26AS STATEMENT WAS NOT IN HIS FAVOUR. BUT NOW THE REAL GROSS RECEIPTS WERE REPORTED IN 26AS BECAU SE THE STATE GOVT. DEPARTMENTS HAVE MADE PROPER CORRECTIONS WHILE SUBM ITTING THEIR TDS RETURNS. 6.1 LD. AR SUBMITTED THAT THE CIT(A) IGNORING THE L ATEST 26AS FILED BEFORE HIM, CONFIRMED THE PENALTY LEVIED BY THE AO, WHICH IS NOT PROPER AND THE ORDER OF THE CIT(A) MAY BE SET ASIDE AND THE PENALTY LEVIED MAY BE DELETED. 7. LD. DR, ON THE OTHER HAND, RELIED UPON THE ORDER S OF REVENUE AUTHORITIES. 8. CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL FACTS ON RECORD. AS DEMONSTRATED BY THE ASSESSEE BY WAY O F DOCUMENTARY 5 ITA NO. 167/H/17 SRIDHAR PITLA, NIZAMABAD EVIDENCE, THE DIFFERENCE OF TURNOVER WAS ONLY RS. 2 ,72,594/- AS AGAINST RS. 47,61,931/- AS PER LATEST 26AS. WE ARE OF THE VIEW THAT THE CIT(A) WITHOUT CONSIDERING THE SUBMISSIONS OF T HE ASSESSEE AND LATEST 26AS, CONFIRMED THE PENALTY LEVIED BY THE AO IS NOT PROPER. AS SUBMITTED BY THE LD. AR OF THE ASSESSEE, THERE WERE SO MANY CONTRACTS AWARDED BY THE GOVT. DEPARTMENTS AND WITH OUT MAKING RECONCILIATION THEY REPORTED GROSS TURNOVER IN 26A S AS ON 29/12/2012 AND RECTIFIED THE GROSS RECEIPTS IN THE LATEST 26AS DATED 21/10/2016. THEREFORE, THERE WAS NO DELIBERATE ACT OR INTENTION OF THE ASSESSEE TO CONCEAL HIS INCOME AND THEREFORE, CONSIDERING THE F ACTS ON RECORD, PROVISIONS OF SECTION 271(1)(C) DO NOT ATTRACT IN T HE PRESENT CASE. ACCORDINGLY, TO MEET THE ENDS OF JUSTICE, WE SET AS IDE THE ORDER OF THE CIT(A) AND REMIT THE MATTER BACK TO THE FILE OF THE AO WITH A DIRECTION TO EXAMINE THE RECORD SUBMITTED BY THE ASSESSEE AND DECIDE THE ISSUE IN ACCORDANCE WITH LAW AFTER PROVIDING REASON ABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE IN THE MATTER. 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 30 TH AUGUST, 2017. SD/- SD/- (D. MANMOHAN) (S. RIFAUR RAHMAN ) VICE PRESIDENT AC COUNTANT MEMBER HYDERABAD, DATED:30 TH AUGUST, 2017. KV COPY TO:- 1) SHRI PITLA SRIDHAR, C/O CA K. HANMANDLOO, FLAT N O. 404, MOUNT NASIR APARTMENTS, BESIDE RAVINDRA BHARATH I, SAIFABAD, HYDERABAD 500 004. 2) ITO, WARD NO. 2, NIZAMABAD. 3) CIT(A) - 5 HYDERABAD 4 PR. CIT - 5, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T.A.T., HYDE RABAD. 6) GUARD FILE