Shri Paragkumar Mafatlal Shah, Ahmedabad V. The Income tax Officer,Ward-3(4), Petlad

ITA 2081/AHD/2011

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9750 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 4 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 02-12-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 23-08-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH BEFORE: S H RI PRAMOD KUMAR , ACCOUNTANT MEMBER AND SHR I S. S. GODARA , JUDICIAL MEMBER PARAGKUMAR MAFATLAL SHAH, BORSAD, TAL. BORSAD PAN: AHFPS2426J (APPELLANT) VS INCOME TAX OFFICER, WARD 3(4), PETLAD (RESPONDENT) REVENUE BY : S H RI DINESH SINGH , SR. D . R. ASSESSEE BY: WRITTEN SUBMISSION (NONE) DATE OF HEARING : 02 - 12 - 2 015 DATE OF PRONOUNCEMENT : 20 - 01 - 2 016 / ORDER P ER : S. S. GODARA , JUDICIAL MEMBER : - THIS ASSESSEE S APPEAL FOR A. Y. 2005 - 06 , AR ISES FROM ORDER OF THE CIT(A) - IV, BARODA DATED 18 - 05 - 2011 IN APPEAL NO. CAB/IV - 445/ 09 - 10, IN PROCEEDINGS UNDER SECTION 271B OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . I T A NO . 2081 / A HD/20 11 A SSESSMENT YEAR 200 5 - 06 I.T.A NO. 2081 /AHD/20 11 A.Y. 2005 - 06 PAGE NO SHRI PARAGKUMAR MAFATLAL SHAH VS. ITO 2 2. A PERUSAL OF THE CA S E FILE REVEALS THAT THE INSTANT APPEAL HAS BEE N FILED BY DELAY OF FOUR DAYS. T HE ASSESSEE HAS MOVED A CONDONATION PETITION. THE REVENUE IS FAIR ENOUGH IN NOT DISPUTING ITS CORRECTNESS. WE ACCORDINGLY CONDONE FOUR DAYS DELAY IN FILLING OF THE INSTANT APPEAL AND PROCEED TO ADJUDICATE ON MERITS OF THE CASE. 3. THE ASSESSEE S SOLE SUBSTANTIVE GROUND CHALLENGES SECTION 271B PENALTY OF RS. 23,450/ - FOR ITS FAILURE IN GETTING ITS ACCOUNT AUDITED. THE SAME HAS BEEN COMPUTED @ 0.5% OF THE TOTAL TURNOVER OF RS. 46,89,512/ - . 4. THE ASSESSEE - INDIVIDU AL FILED HIS RETURN ON 26 - 10 - 2005 ADMITTING HIS INCOME OF RS. 3,13,190/ - . HE WAS HAVING TWO KINDS OF BUSINESS. HE SUBMITTED TWO SETS OF COMPUTATION SEPARATELY. THE FIRST BUSINESS IS OF TRADING IN SHARES. HE SUBMITTED H IS AUDIT REPORT U/S. 44AB OF TH E A CT. HIS SECOND BUSINESS RELATES TO LABOUR CONTRACT RECEIPT. THE ASSESSEE SUBMITTED SEPARATE SET OF COMPUTATION. THE ASSESSING O FFICER NOTICED THAT ITS ACCOUNT SUBMITTED DID NOT CONTAINED AUDITOR S SIGNATURE VERIFYING THE S AME. HE WAS OF THE VIEW THAT T HIS AMOUNTED TO FAILURE IN GETTING ACCOUNTS AUDITED AND FURNISHING THE SAME U/S. 44AB AS REQUIRED TO BE FILED ON OR BEFORE 31 - 10 - 2005. THE ASSESSING OFFICER INITIATED SECTION 271B PENALTY PROCEEDINGS IN QUESTION. I.T.A NO. 2081 /AHD/20 11 A.Y. 2005 - 06 PAGE NO SHRI PARAGKUMAR MAFATLAL SHAH VS. ITO 3 5. THE ASSESSEE FILED HIS REPLY ON 2 5 - 04 - 2008 INTER ALIA STATING THAT HE HAD ATTACHED AUDITED BALANCE SHEET AND AUDIT REPORT OF FIRST SET OF STATEMENT OF ACCOUNT RELATING TO HIS SHARE TRADING BUSINESS. HE PLEADED OVERSIGHT IN FAILING TO ATTACH SECOND SET OF STATEMENT OF ACCOUNT PERTAINING T O CONTRACT RECEIPT AND AUDIT REPORT UNDER THE VERY PROVISION WHICH WAS DULY AUDITED ON 12 - 07 - 2005 BY HIS CHARTERED ACCOUNTANT. THE AS SESSING OFFICER TERMED THE SAME AS NEITHER CONVINCIBLE NOR SATISFACTORY EXPLANATION. HE HELD IN PENALTY ORDER DATED 27 - 06 - 2008 THAT THE ASSESSEE HAD FAILED TO GET HIS ACCOUNT AUDITED U/S. 44AB OF THE ACT. THIS RESULTED IN IMPOSITION OF THE IMPUGNED PENALTY. THE CIT(A) CONFIRMS ASSESSING OFFICER S ACTION. 6. WE HAVE HEARD THE REVENUE . ASSESS EE S WRITTEN SUBMISSIONS AND CA SE FILE PERUSED IT HAS COME ON RECORD THAT THE ASSESSEE HAS GOT HIS ACCOUNT AUDITED ON 12 - 07 - 2005 (SUPRA). THE ASSESSING OFFICER STILL HOLDS IN AS NOT TO HAVE GOT THE SAME AUDITED. HE DOES NOT HOLD IN HIS FINDING THAT IT S A CASE OF LATE FURNISHING OF REPORT IN PARA 5 OF THE ORDER. THERE CAN HARDLY BE ANY QUARREL THAT PENALTY PROVISION IN TAX STATUTE HAS TO BE VERY STRICTLY INTERPR ETED. WE HOLD ACCORDINGLY THAT LD. ASSESSING OFFICER HAS ERRED IN HOLDING THE ASSESSEE AS TO HAVE FAILED HIS ACCOUNTS AUD ITED IN VIEW OF THE FACT THAT THIS FINDING WAS CONTRARY TO THE CASE RECORD. THE IMPUGNED SECTION 271B PENALTY IS DELETED. I.T.A NO. 2081 /AHD/20 11 A.Y. 2005 - 06 PAGE NO SHRI PARAGKUMAR MAFATLAL SHAH VS. ITO 4 7. THIS ASSESSEE S APPEAL IS ALLOWED. ORDER PR ONOUNCED IN THE OPEN C OURT ON 20 - 01 - 201 6 SD/ - SD/ - ( PRAMOD KUMAR ) ( S. S. GODARA ) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD : DATED 20 /01/2016 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/ , / ,