The ITO, Ward-9(1), Ahmedabad V. M/s. Shri Hari Construction Co., Ahmedabad

ITA 2024/AHD/2011

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 76869 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 10 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-07-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2007-2008
• Appeal Filed On: 12-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV
• Section: 143(3); 194C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD (BEFORE SHRI G.C.GUPTA VICE PRESIDENT & SHRI ANIL C HATURVEDI, A.M.) I.T. A. NO. 2024/AHD/2011 (ASSESSMENT YEAR: 2007-08) I.T.O. WARD-9(1), AHMEDABAD V/S M/S. SHRI HARI CONSTRUCTION CO. SHAYONA TIRTH, B/H L D PATEL SCHOOL, OPP. VISHWASH CITY-2, GHATLODIA, AHMEDABAD (APPELLANT) (RESPONDENT) PAN: AABFS 4560F APPELLANT BY : SHRI B.L. YADAV, SR. D.R. RESPONDENT BY : NONE ( )/ ORDER DATE OF HEARING : 07-07-20 14 DATE OF PRONOUNCEMENT : 11 -07-2014 PER SHRI ANIL CHATURVEDI,A.M. 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF CIT(A)-XV, AHMEDABAD DATED 14.06.2011. 2. ON THE DATE OF HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE NOR ANY ADJOURNMENT APPLICATION WAS FILED BY ASSESSEE. WE T HEREFORE PROCEED TO DECIDE THE APPEAL ON THE BASIS OF MATERIAL ON RECOR D EX PARTE QUA THE ASSESSEE. 3. THE FACTS AS CULLED OUT FROM THE MATERIAL ON REC ORD ARE AS UNDER. ITA NO 2024 /AHD/2011 . A.Y. 2007- 08 2 4. ASSESSEE IS A FIRM STATED TO BE ENGAGED IN THE B USINESS OF CONSTRUCTION OF RESIDENTIAL UNITS, TENAMENTS AND BUNGLOWS. ASSESSE E ELECTRONICALLY FILED ITS RETURN OF INCOME FOR A.Y. 07-08 ON 22.10.2007 DECLA RING TOTAL INCOME OF RS. 4,83,813/-. THE CASE WAS SELECTED FOR SCRUTINY AND THEREAFTER THE ASSESSMENT WAS FRAMED U/S. 143(3) VIDE ORDER DATED 07.12.2009 AND THE TOTAL INCOME WAS DETERMINED AT RS. 26,92,450/-. WHILE ASSESSING THE TOTAL INCOME DISALLOWANCE U/S. 40(A)(IA) WAS MADE BY A.O . ON THE AFORESAID A MOUNT DISALLOWED U/S. 40(A)(IA), A.O VIDE PENALTY ORDER DATED 30.06.2010 LEVIED PENALTY OF RS. 7,22,616/- U/S. 271(1)(C) OF THE ACT. AGGRIEVED BY THE ORDER OF A.O, ASSESSEE CARRIED THE MATTER BEFORE CIT(A). CIT(A) DELETED TH E PENALTY BY HOLDING AS UNDER:- 4. AFTER GOING THROUGH RIVAL SUBMISSIONS I AM OF TH E VIEW THAT FAILURE TO DEDUCT TDS ON CONTRACT PAYMENTS CONSTITUTES TECHNICAL BREACH O F PROVISIONS OF SECTION 194C AND BECAUSE NO TDS WAS DEDUCTED THE AMOUNTS HAVE BEEN D ISALLOWED U/S.40(A)(IA) BY THE AO IN THE ASSESSMENT ORDER. IN MY VIEW QUANTUM ADDI TION BY ITSELF DOES NOT JUSTIFY PENALTY U/S.271(1)(C). RELYING ON THE SUPREME COURT DECISION IN THE CASE OF HINDUSTAN STEEL LIMITED V/S STATE OF ORISSA - 83 IT R 26 (SC) WHEREIN IT HAS BEEN HELD THAT MERELY FOR TECHNICAL / VENIAL BREACH OF LAW PE NALTY NEED NOT BE IMPOSED THE AO IS DIRECTED TO DELETE THE PENALTY IMPOSED. 5. AGGRIEVED BY THE ORDER OF CIT(A), THE REVENUE IS NOW IN APPEAL BEFORE US. 6. BEFORE US, LD. D.R. TOOK US THROUGH THE PENALTY ORDER OF A.O AND SUBMITTED THAT ADDITION WAS MADE BECAUSE ASSESSEE HAD FAILED TO COMPLY WITH TDS PROVISIONS OF THE ACT AND THE ASSESSEE WAS WELL AWA RE ABOUT ITS OBLIGATION TO DEDUCT TAX AND DEPOSIT TO THE GOVERNMENT ACCOUNT AS WELL AS THE PROVISIONS OF SECTION 40(A)(IA) OF THE ACT. THE ASSESSEE SHOUL D HAVE THEREFORE DISALLOWED THE EXPENSES WHILE COMPUTING THE INCOME. FAILURE ON THE PART OF ASSESSEE TO DISALLOW THE EXPENSES HAS RESULTED INTO NON REFLECTION OF THE TRUE INCOME OF THE ASSESSEE. FURTHER HAD THE CASE NOT BE EN SELECTED FOR SCRUTINY, THE INCOME TO THE TUNE OF RS. 21,46,807/- WOULD HAV E ESCAPED ASSESSMENT. THUS IT WAS CLEAR THAT ASSESSEE HAD WILLFULLY AND D ELIBERATELY FURNISHED INACCURATE PARTICULARS OF INCOME AND THEREFORE A.O HAD RIGHTLY LEVIED PENALTY. HE IS THEREFORE SUBMITTED THAT THE ORDER OF A.O LEV YING THE PENALTY BE UPHELD. ITA NO 2024 /AHD/2011 . A.Y. 2007- 08 3 7. WE HAVE HEARD THE LD. D.R. AND PERUSED THE MATER IAL ON RECORD. WE FIND THAT CIT(A) WHILE DELETING THE PENALTY HAS GIVEN A FINDI NG THAT FAILURE TO DEDUCT TDS ON CONTRACT PAYMENT CONSTITUTED TECHNICAL BREAC H OF PROVISIONS OF SECTION 194C AND BECAUSE OF WHICH NO TDS WAS DEDUCT ED WHICH RESULTED INTO DISALLOWANCE U/S. 40(A)(IA). WE FURTHER FIND T HAT CIT(A) RELYING ON THE DECISION IN THE CASE OF HINDUSTAN STEEL LTD. VS. ST ATE OF ORISSA 83 ITR 26 (SC) HAS HELD THAT MERELY FOR TECHNICAL/BENIAL BREA CH OF LAW, PENALTY NEED NOT BE IMPOSED. BEFORE US REVENUE COULD NOT CONTROVERT THE FINDINGS OF CIT(A) BY BRINGING ANY CONTRARY MATERIAL ON RECORD. IN VIE W OF THE AFORESAID FACTS, WE FIND NO REASON TO INTERFERE WITH THE ORDER OF CIT(A ) AND THUS THIS GROUND OF REVENUE IS DISMISSED. 8. IN THE RESULT, THE APPEAL OF REVENUE IS DISMISSE D. ORDER PRONOUNCED IN OPEN COURT ON 11 - 07- 2014. SD/- SD/- (G.C.GUPTA) (ANIL CHATURVEDI) VICE PRESIDENT ACCOUNTANT MEMBER AHMEDABAD. TRUE COPY RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AH MEDABAD