The ITO, Ward-9(4), Ahmedabad V. Shri Dilipkumar Patole, Ahmedabad

ITA 185/AHD/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0091 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-11-2016
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 27-10-2016
• Assessment Year: 2007-2008
• Appeal Filed On: 20-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: K C THAKER
• Keywords: Opportunity of being heard; Non compliance

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH BEFORE: SHR I S. S. GODARA , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER THE ITO, WARD - 9(4), AHMEDABAD (APPELLANT) VS SHRI DILIPKUMAR PATOLE, PROP. M/S. JAIHIND TRANSPORT, 20, VICTRO WAREH O USE, TRANSPORT NAGAR, NAROL, AHMEDABAD - 382405 PAN: ABCPP 4852 G (RESPONDENT) REVENUE BY : S H RI PRASOON KABRA , SR. D . R. ASSESSEE BY: S H RI K.C. THAKER , A.R. DATE OF HEARING : 27 - 10 - 2 016 DATE OF PRONOUNCEMENT : 09 - 11 - 2 016 / ORDER P ER : AMARJIT SIN GH, ACCOUNTANT MEMBER : - THIS REVENUE S APPEAL FOR A.Y. 2007 - 08 , AR ISES FROM ORDER OF THE CIT(A) - XV , AHMEDABAD DATED 12 - 11 - 2013 IN APPEAL NO. CIT(A) - XV/ITO - 9(4)/67/12 - 13 , IN PROCEEDINGS UNDER SECTION 271(1 ) (C) OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT I T A NO . 185 / A HD/20 14 A SSESSMENT YEAR 200 7 - 08 I .T.A NO. 185 /AHD/20 14 A.Y. 2007 - 08 PAGE NO ITO VS. SHRI DILIPKUMAR PATOLE 2 2. THE REVENUE HAS RAISED FOLLOWING GROUNDS OF APPEAL: - 1A). THE LD. COMMISSIONER OF INCOME - TAX (APPEALS) - XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS IN DELETIN G THE PENALTY OF RS.1,17,73,109/ - LEVIED U/S. 271(1)(C)OF THE ACT. 1B). THE LD. CO MMISSIONER OF INCOME - TAX (APPEALS) - XV, AHMEDABAD HAS ERRED IN LAW AND ON FACTS TO IGNORE EXPLANATION 1 OF PROVISION OF SECTION 271(1) (C) OF THE ACT, WHICH LAYS DOWN THAT WHERE ASSESSEE'S EXPLANATION IN RESPECT OF ANY MATTER WAS NOT FOUND 'S ATISFACTORY' , PR OVISION OF SECTION 271(1) (C) OF THE ACT, WERE ATTRACTED FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 3 . IN THIS CASE, THE RETURN OF INCOME DECLARING INCOME OF R S. 9 , 84 , 110 WAS FILED ON 02/11/2007. D URING THE COURSE OF ASSESSMENT PROCEEDINGS , THE ASSESSING OFFICER HAS NOTICED THAT THE ASSESSEE HAD MADE FREIGHT PAYMENT TOTA LING RS. 3 , 49 , 02 , 235/ - ON WHICH TDS WAS NOT DEDUCTED AS ASSESSING OFFICER FOUND THAT MOST OF T HE PAYMENTS WERE IN EXCESS OF R S. 20000/ - . T HE ASSESSEE HAS NOT FURNISHED THE INFORMA TION BEFORE THE ASSESSING OFFICER , THEREFORE , THE ASSESSING OFFICER COME TO THE CONCLUSION THAT THE ASSESSEE HAS NOT DEDUCTED TAX FROM PAYMENTS TO TRANSPORTERS TO THE EXTENT OF R S. 3 , 49 , 02 , 235/ - AND ACCORDINGLY HE DISALLOWED THE SAID AMOUNT U/S 40(A)(IA ) OF THE ACT AND ALSO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C) FOR FURNISHING INACCURATE PARTICULARS OF INCOME . 4 . AGGRIEVED AGAINST THE ORDER OF ASSESSING OFFICER , THE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A ) . THE LD. CIT(A ) HAS DISMISSED THE APPE AL OF THE ASSESSEE AND CONFIRMED THE ADDITION OF RS. 3.49 CRORES MADE BY THE ASSESSING OFFICER. T HEREAFTER , THE ASSESSING OFFICER LEVIED PENALTY U/S 271(1)(C) VIDE ORDER DATED 23/03/2012 OF R S. I .T.A NO. 185 /AHD/20 14 A.Y. 2007 - 08 PAGE NO ITO VS. SHRI DILIPKUMAR PATOLE 3 1 , 17 , 73 , 109/ - ON THE GROUND OF FURNISHING INACCURATE PARTICU LARS OF INCOME. 5. A GAINST THE PENALTY ORDER MADE BY THE ASSESSING OFFICER , THE ASSESSEE FILED APPEAL BEFORE LD. COMMISSIONER OF INCOME TAX(A). LD. COMMISSIONER OF INCOME TAX(A) HAS DELETED THE PENALTY IMPOSED BY THE ASSESSING OFFICER AFTER PLACING R ELIANCE ON THE JUDICIAL PRONOUNCEMENT OF G UJARAT HIGH CO URT IN THE CASE OF CIT VS. VENUS ENGINEERS IN THE TAX APPEAL 1292 OF 2010 VIDE JUDGMENT DATE D 29/09/2011. H ON BLE ITAT AHMEDABAD D BENCH IN THE CASE OF DCIT CIRCLE 9 A HMEDABAD VS. M /S L.G. CHAUDHARY IN ITA NO. 228/A HD/2010 FOR ASSESSMENT YEAR 2006 - 07 VIDE ORDER DATED 16/03/2012 AFTER CONSIDERING I TS OWN ORDER IN THE CASE OF DCIT VS. MAZAL L TD, ACIT VS. SARASWATI CONSTRUCTION COMPANY AND LUCKY INTERNATIONAL AND ALSO HON BLE DELHI ITAT ORDER IN THE CA SE OF ASIAN HOTELS LTD IN WHICH IT WAS HELD THAT FOR THE DISALLOWANCES AND ADDITION U/S. 40(A)(IA) OF THE ACT NO PENALTY U/S. 271(1)(C) IS EXIGIBLE. THE DECISION OF THE LD. COMMISSIONER OF INCOME TAX(A) IS REPRODUCED AS UNDER: - 5. I HAVE PERUSED THE FACTS AS ENUMERATED BY THE A.O. IN THE ASSESSMENT ORDER AS WELL AS PENALTY ORDER WITH CASE LAWS RELIED ON. THE APPELLANT'S ONLY GROUND IS AGAINST THE PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT OF RS. 1,17,73,109/ - WHICH IS UNDISPUTEDLY ON THE FACTS OF DISALL OWANCES OF RS. 34902235/ - U/S 40(A)(IA) OF THE ACT FOR NON COMPLIANCE OF IDS PROVISIONS. IN FACT APPELLANT'S ENTIRE CLAIM OF EXPENDITURE (FREIGHT PAYMENT BY A TRANSPORTER) WAS DISALLOWED. I AM INCLINED WITH THE CONTENTION OF APPELLANT THAT IN VIEW OF DEEMI NG PROVISIONS OF SECTION 40(A)(IA) OF THE ACT, WITH SEPARATE PENALTY PROVISIONS FOR NON DEDUCTION OF TDS AND ALLOWABILITY OF SUCH EXPENSES IN SUBSEQUENT YEAR ON ACCOUNT OF PAYMENT OF TDS, THE I .T.A NO. 185 /AHD/20 14 A.Y. 2007 - 08 PAGE NO ITO VS. SHRI DILIPKUMAR PATOLE 4 PENALTY U/S. 271 (1)( C) OF THE ACT IS NEITHER JUSTIFIED BEING T OO HARSH AND DUPLICATE NOR SUSTAINABLE IN LAW. HON'BLE' GUJARAT HIGH COURT IN THE CASE OF CIT IV VS M/S. VENUS ENGINEERS IN THE TAX APPEAL 1292 OF 2010 VIDE JUDGMENT DTD 29.08.2011 HELD.SO. HON'BLE ITAT AHMEDABAD 'D' BENCH IN THE CASE OF DCIT CIR - 9 A'BAD V S. M/S. LG.CHAUDHARY IN ITA NO.228/AHD/2010 FOR A.Y 2006 - 07 VIDE ORDER DTD 16 - 3 - 12 AFTER CONSIDERING ITS OWN ORDER IN THE CASE OF DCIT VS. MAZDAL LTD., ACIT VS. SARASWATI CONSTRUCTION CO AND M/S. LUCKY LNTERNATIONAL(AS RELIED ON BY APPELLANT) AND ALSO HON' BLE DELHI ITAT ORDER IN THE CASE OF ASIAN HOTELS LTD.(AS RELIED ON BY APPELLANT) HELD THAT FOR THE DISALLOWANCES AND ADDITION U/S. 40(A)(IA) OF THE ACT NO PENALTY U/S. 271(1)(C) IS EXIGIABLE. THE APPELLANT'S BONAFIDE OF DISCLOSING ALL TRUE PARTICULARS ARE EVIDENT FROM THE FACT THAT IT GOT HIS ACCOUNT AUDITED AND NO ADVERSE COMMENT IS MADE BY TAX AUDITOR IN THIS REGARD. IT IS THEREFORE, THE PENALTY SO IMPOSED BY A.O IS NEITHER JUSTIFIED NOR SUSTAINABLE IN LAW. THE A.O. IS DIRECTED TO DELETE THE PENALTY SO IM POSED OF RS. 1,17,73,109. THE APPELLANT GETS RELIEF ACCORDINGLY. THIS GROUND IS ALLOWED. 6. DURING THE COURSE OF PROCEEDINGS BEFORE US, THE LD. DR RELIED ON THE ORDER OF ASSESSING OFFICER. ON THE O THER HAND, LD. A.R CONT ENDED BEFORE US THAT HON BLE ITA T AHMEDABAD VIDE ORDER NO. ITA NO. 3460/ALHD/2010 IN THE CASE OF ASSESSEE FOR THE ASSESSMENT YEAR 2007 - 08, THE QUANTUM ADDITION ON THE BASIS OF WHICH PENALTY WAS LEVIED HAS BEEN SET ASIDE TO THE FILE OF LD. COMMISSIONER OF INCOME TAX (APPEALS) WITH DIREC TION TO DECIDE THE ENTIRE ISSUE AFRESH AFTER PROVIDING ADEQUATE OPPORTUNITY OF BEING HEARD BOTH THE SIDES IN VIEW OF THE ABOVE MENTIONED FACTS AND FINDINGS , WE CONSIDER TO SET ASIDE THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) OF SUSTAINING THE PENALTY IN THIS CASE FOR A FRESH DECISION AFTER DECIDING THE ORDER IN THE CASE OF ASSESSEE OF QUANTUM ADDITION WHICH HAS ALREADY BEEN SET ASIDE TO THE LD. COMMIS SIONER OF INCOME TAX (APPEALS) BY THE HON BLE ITAT AS STATED IN THE SAID ORDER. I .T.A NO. 185 /AHD/20 14 A.Y. 2007 - 08 PAGE NO ITO VS. SHRI DILIPKUMAR PATOLE 5 7 . IN THE R ESULT, ASSESSEE S APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PR ONOUNCED IN THE OPEN C OURT ON 09 - 1 1 - 201 6 SD/ - SD/ - ( S.S. GODARA ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 09 /1 1 /2016 AK / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,