DCIT,1(1), RAIPUR (CG) V. SHRI SHARAD SHUKLA, RAIPUR (CG)

ITA 20/BIL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 1526 (ITAT-RAIPUR)
• Duration Of Justice: 2 year(s) 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 21-04-2016
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 06-05-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K JAIN
• Assessee Lawyers: R B DOSHI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BEFORE SHRI SHAMIM YAHYA (AM) & SHRI PARTHA SARATHI CHAUDHURY (JM) I.T.A. NO.20/BL PR /201 3 ASSESSMENT YEAR : 2009 - 2010 DCIT - 1(1), REVENUE BUILDING, CIVIL LINES, RAIPUR. V S SHARAD SHUKLA, STATION ROAD, NEAR DESHBANDHU SCHOOL, RAIPUR PAN/GIR NO. : AJJPS 8996 D (APPELLANT ) .. RESPONDENT APPELLANT BY : SHRI D.K.JAIN RESPONDENT BY : SHRI R.B.,DOSHI DATE OF HEARING : 18 - 04 - 2016 DATE OF PRONOUNCEMENT : 21 - 4 - 2016 O R D E R PER PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER: THIS IS AN APPEAL FILED BY THE REVENUE ARISING FROM TH E ORDER OF THE LD CIT(A), RAIPUR , DATED 7.2.2013, CANCELLING THE PENALTY LEVIED BY THE AO U/S.271(1)(C) OF THE I.T.ACT, 1961, FOR THE ASSESSMENT YEAR 2009 - 2010. 2. FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME FROM EXECUTION OF CIVIL CONSTRUCTION CONTRACT WORKS. THE ASS ESSEE FILED ITS RETURN OF INCOME ON 6.11.2009 DECLARING TOTAL INCOME OF RS.53,55,230/ - ON THE BASIS OF AUDITED ACCOUNTS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE AO NOTICED THAT THE ASSESSEE HAD SHOWN THE NET PROFIT @ 3.02% FROM CIVIL CONSTRUCTION BUSINESS. HOWEVER, DESPITE VARIOUS OPPORTUNITIES GIVEN TO THE ASSESSEE BY THE AO, THE ASSESSEE COULD NOT PRODUCE BOOKS OF ACCOUNT AND OTHER RELEVANT DOCUMENTS BEFORE 2 I.T.A. NO.20/BLPR/2013 ASSESSMENT YEAR : 2009 - 2010 THE AO. IT WAS IN THIS BACKDROP THAT THE AO REJECTED THE BOOKS OF ACCOUNT BY INVOKING SECTION145(3) AND COMPLETED THE ASSESSMENT U/S.144 OF THE ACT AND BASED ON ASSESSEES OWN ASSESSMENTS FOR EARLIER ASSESSMENT YEARS ESTIMATED THE NET PROFIT @ 5.5% OF THE RECEIPTS ON THE BASIS OF DECISIONS OF THE ITAT IN ASSESSEES OWN CASE. THE AO OBSERV ED THAT HAD THE ASSESSMENTS U/S.143(3) WERE NOT MADE, THE ADDITIONAL INCOME COULD HAVE NEVER BEEN BROUGHT TO TAX. IN VIEW OF ABOVE, THE AO OB SERVED THAT THE ASSESSEE HAS CONCEALED THE PARTICULARS OF HIS INCOME AND, ACCORDINGLY, LEVIED PENALTY OF RS.14,77 ,689/ - UNDER SECTION 271(1)(C) OF THE ACT BEING 100% OF TAX SOUGHT TO BE EVADED . AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 3. BEFORE THE LD C IT(A) IT WAS SUBMITTED THAT THE ASSESSEE HAS MAINTAINED REGULAR BOOKS OF ACCOUNT AND THE SAME WERE AUDITED U/S.44AB OF THE ACT. HOWEVER, THE BOOKS OF ACCOUNT WERE NOT SUBMITTED BEFORE THE AO AS THEY WERE KEPT IN THE CUSTODY OF THE ACCOUNTANT, WHO HAS NOT RETURNED THE SAME DESPITE SEVERAL REQUEST S /EFFORTS. ACCORDINGLY , THE PROFIT WAS ESTIMATED AT 5.5% OF THE NET RECEIPTS. IT WAS STATED THAT THE ASSESSEE DID NOT CONCEAL THE PARTICULARS OF INCOME . THE PENALTY HAS BEEN IMPOSED ON THE ENHANCED INCOME ON ESTIMATED BASIS. HE REFERRED TO THE DECISION OF HONBLE JURISDICTI ONAL HIGH COURT IN THE CASE OF CIT VS. VIJAY KUMAR JAIN (2010) 325 ITR 378 (CHH) AND SUBMITTED THAT PENALTY CANNOT BE LEVIED ON THE ENHANCED INCOME. 4. LD CIT(A) OBSERVED THAT THE ASSESSMENT WAS MADE BY APPLYING ESTIMATED RATE OF PROFIT AND THERE WAS NO P OSITIVE CONCEALMENT DETECTED IN THE ASSESSMENT. REFERRING TO THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF VIJAY 3 I.T.A. NO.20/BLPR/2013 ASSESSMENT YEAR : 2009 - 2010 KUMAR JAIN (SUPRA), WHEREIN, IT WAS HELD THAT WHEN THE ASSESSEE HAS FURNISHED ACCURATE PARTICULARS OF ENTIRE RECEIPTS AND H AD SHOWN THE NP AFTER DEDUCTION OF EXPENSES AND THE INCOME WAS ESTIMATED ON THE GROUND OF NON - PRODUCTION OF ANY EVIDENCES AND BOOKS OF ACCOUNT, INCLUDING THE BALANCE SHEET FOR THE ASSESSMENT YEAR, THE PENALTY CANNOT BE LEVIED, LD CIT(A) HELD THAT PENALTY I S NOT SUSTAINABLE AND ACCORDINGLY, CANCELLED THE SAME. BEING AGGRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE SIDES AND CONS IDERED THE LEGAL PROVISIONS APP LICABLE TO THE CASE AND THE FACTS ON WHICH PENALTY PROCEEDINGS COULD BE APPLIED AND WE ARRIVE AT OUR CONSIDERED VIEW THAT UNDER THE PROVISIONS OF INCOME - TAX ACT FOR LEVYING PENALTY U/S 271(1)(C) OF THE ACT , THE REQUIREMENT IS THAT EITHER THE ASSESSEE HA D CONCEALED ITS INCOME OR FURNISHED INACCURATE PARTICULARS OF THE INCOME. EITHER OF THE TWO CONDITIONS NEEDS TO BE SATISFIED IN ORDER TO JUSTIFY THE LEVY OF PENALTY U/S 271(1)(C) OF THE ACT. THERE ARE NO OTHER WAY IN WHICH THE PENALTY CAN BE LEVIED. IN T HE INSTANT CASE, THE ASSESSEE HAS PROVIDED ALL THE DETAILS AND PARTICULARS TO THE AO BUT BOOKS OF ACCOUNT COULD NOT BE PRODUCED BECAUSE OF THE FACT THAT THE SAME WAS IN THE CUSTODY OF THE ACCOUNTANT AND HE HAD REFUSED TO HAND OVER THOSE BOOKS OF ACCOUNT TO THE ASSESSEE. THESE FACTS ARE BROUGHT ON RECORD BEFORE THE DEPARTMENT AND AS HAS BEEN RIGHTLY OBSERVED BY THE LD CIT(A) THAT THE ASSESSEE HAS NOT CONCEALED ANY INCOME NOR THE ASSESSEE HAS FURNISHED ANY INACCURATE PARTICULARS OF INCOME AND THAT WHATEVER M ATERIALS/DOCUMENTS WERE IN THE POSSESSION OF THE ASSESSEE PRODUCED BEFORE THE AO AND THE ASSESSEE HAS ALWAYS COOPERATED WITH THE DEPARTMENT IN FURNISHING ALL THE DOCUMENTS AS AND WHEN CALLED FOR. IN THE PENAL PROVISIONS, THERE SHOULD BE A RATIONAL AND LEG AL BASIS BEFORE IMPOSING THE PENALTY. . 4 I.T.A. NO.20/BLPR/2013 ASSESSMENT YEAR : 2009 - 2010 THERE CANNOT BE ANY GUESS WORK, SURMISES OR ESTIMATION IN THE INTERPRETATION SO FAR AS IMPOSITION OF PENALTY IS CONCERNED. THE SPECIFICATIONS LAID DOWN IN THE STATUTES MUST BE ADHERED TO IN IMPOSING ANY PENAL PROVISI ON. IN THE CASE BEFORE US, THE ASSESSEE HAD DISCLOSED NET PROFIT RATE @ 3.02% AND THE AO HAS DETERMINED THE NET PROFIT @ 5.5% FOLLOWING THE DECISIONS OF THE TRIBUNAL FOR THE PRECEDING ASSESSMENT YEARS ON ESTIMATE BASIS. IN SUCH CASES WHERE THE INCOME OF THE ASSESSEE HAS BEEN ASSESSED ON ESTIMATE BASIS AND ADDITION HAS BEEN MADE ON THE BASIS OF ESTIMATE AND NOT ON ACCOUNT OF ANY CONCRETE EVIDENCE OF CONCEALMENT BEING FOUND, THERE IS NO MERIT IN THE LEVY OF PENALTY FOR CONCEALMENT U/S 271(1)(C) OF THE ACT. THE AO HAS NOT BROUGHT OUT ANY POSITIVE MATERIAL ON RECORD THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS. THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF VIJAY KUMAR JAIN (SUPRA), HAS HELD THAT WHERE THE I NCOME HAS BEEN ENHANCED ON ESTIMATE BASIS, PEN A LTY CANNOT BE LEVIED, WHICH IS THE FACT IN THE CASE OF THE ASSESSEE. THEREFORE, FOLLOWING THE RATIO LAID DOWN BY THE HONBLE JURISDICTIONAL HIGH COURT (SUPRA), WE FIND THAT LD CIT(A) HAS RIGHTLY DELETED THE PENALTY, AND THEREFORE, INTERFERENCE IS NOT CALLED FOR. 6. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DISMISSED., ORDER PRONOUNCED IN THE OPEN COURT ON 21/ 4/2016. . SD/ - SD/ - (SHAMIM YAHYA) (PARTHASARATHI CHAUDHURY) ACCOUNTANT MEMBER JUDICIAL MEMBER R AIPUR, DATED 21 / 0 4 /2016 5 I.T.A. NO.20/BLPR/2013 ASSESSMENT YEAR : 2009 - 2010 PA RIDA , SR. PS / COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT : DCIT - 1(1), REVENUE BUILDING, CIVIL LINES, RAIPUR 2. THE RESPONDENT : SHARAD SHUKLA, STATION ROAD, NEAR DESHBANDHU SCHOOL, RAIPUR 3. THE CIT(A) - RAIPUR 4. CIT , RAIPUR 5. DR, ITAT, RAIPUR 6. GUARD FILE. BY ORDER, //TRUE COPY// ASST.REGISTRAR, ITAT, RAIPUR