Shri Hiren N.Chasmawala, Surat V. The Income tax Officer,Ward-9(2), Surat

ITA 2090/AHD/2010

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 2174 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 18-06-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D S S CHAUDHRY
• Assessee Lawyers: JAIMIN GANDHI SHRI KM K PATEL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE SHRI N.S.SAINI, ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH, JUDICIAL MEMBER ITA NO.2090/AHD/2010 ASSESSMENT YEAR:2006-07 DATE OF HEARING:4.2.11 DRAFTED:7.2.11 HIREN N CHASMAWALA S-1, SATT VIJAY SOCIETY, OPP. AROGYA KENDRA, KATARGAM, SURAT PAN NO.AAVPC9735H V/S . INCOME TAX OFFICER, WARD-9(2), SURAT (APPELLANT) .. (RESPONDENT) APPELLANT BY :- SHRI JAIMIN GANDHI ON BEHALF OF SHRI KM.K. PATEL, AR RESPONDENT BY:- SHRI D.S.S CHAUDHRY, DR O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF THE ORDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-V, SURAT IN APPEAL NO.CAS-V /86/2009-10 DATED 26- 03-2010. THE PENALTY UNDER DISPUTE WAS LEVIED BY AS SESSING OFFICER U/S.271A OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED T O AS THE ACT) VIDE HIS ORDER DATED 30-06-2009. 2. THE ONLY ISSUE IN THIS APPEAL OF ASSESSEE IS AGA INST THE ORDER OF CIT(A) IN CONFIRMING THE LEVY OF PENALTY ON ACCOUNT OF NON -MAINTENANCE OF BOOKS OF ACCOUNT. FOR THIS, ASSESSEE HAS RAISED THE FOLLOWIN G GROUND NO.1 :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AS WELL LAW ON THE SUBJECT, THE LEARNED COMMISSIONER OF THE INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE PENALTY OF RS.25,000 ON ACC OUNT OF NON MAINTENANCE OF THE BOOKS OF ACCOUNTS. ITA NO.2090/AHD/2010 A.Y 2006 -07 HIREN N CHASMAWALA V. ITO WD-9(2) SRT PAGE 2 3. WE FIND THAT FROM THE ORDERS OF LOWER AUTHORITIE S THAT THE ASSESSEE FILED ITS RETURN OF INCOME DECLARING TOTAL INCOME AT RS.1 ,12,965/- FOR THE ASSESSMENT YEAR 2006-07 ON 30-07-2006. SUBSEQUENTLY THE ASSESS MENT WAS FRAMED U/S.143(3) DETERMINING TOTAL INCOME AT RS.9,50,872/ - ON 30-12-2008. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT THE RECEIPTS OF THE ASSESSEE ARE IN EXCESS OF RS.10 LAK H AND ACCORDINGLY HE WAS REQUIRED TO MAINTAIN BOOKS OF ACCOUNT AS PER U/S.44 AA OF THE ACT. THE AO ACCORDINGLY LEVIED THE PENALTY FOR NON-MAINTENANCE OF BOOKS OF ACCOUNT IN VIEW OF THE PROVISION OF U/S 274 R.W.S. 271A OF THE ACT AMOUNTING TO RS.25,000/-. AGGRIEVED, ASSESSEE PREFERRED APPEAL B EFORE CIT(A). THE CIT(A) ALSO CONFIRMED THE ACTION OF ASSESSING OFFICER BY G IVING FOLLOWING FINDINGS IN PARA-3 OF HIS APPELLATE ORDER:- 3. THE APPEAL HAS BEEN FIXED ON VARIOUS DATES BUT NO ONE APPEARED NOR ANY WRITTEN SUBMISSION WAS FILED. THE ASSESSING OFFICER HAS GIVEN A DEFINITE FINDING THAT THE TURNOVER OF THE ASSESSEE EXCEEDS RS.10 LAKHS DURING THE RELEVANT PREVIOUS YEAR. THEREFORE, AS ST IPULATED UNDER SECTION 44AA R.W.S. RULES MADE THERE UNDER, THE ASSESSEE WA S REQUIRED TO MAINTAIN THE BOOKS OF ACCOUNTS AND OTHER DOCUMENTS TO ENABLE ASSESSING OFFICER TO COMPUTE HIS TOTAL INCOME IN AC CORDANCE WITH THE PROVISION OF THE ACT. UNDISPUTEDLY, THE ASSESSEE HA S FAILED TO MAINTAIN THESE BOOKS. THE ASSESSEE ALSO SNOT SUBMITTED ANY E XPLANATION IN DEFENSE OF ITS ACTION OF NOT MAINTAINING THE BOOKS OF ACCOUNTS. THEREFORE, I DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE ASSESSING OFFICER. THE PENALTY IMPOSED IS CONFIRMED. 4. WE FIND THAT ASSESSEE IS ENGAGED IN THE ACTIVITI ES OF HAND PRINTING OF CLOTH ON JOB WORK BASIS. THE ASSESSEE WAS DOING THE JOB WORK OF HAND PRINTING OF CLOTH ON A SMALL SCALE BASIS AND DUE TO LIMITED TURNOVER HE HAS NOT MAINTAINED REGULAR BOOKS OF ACCOUNT. THE ASSESSING OFFICER FAILED TO APPRECIATE THAT THE ASSESSEE IS DOING MERELY JOB WO RK ACTIVITIES ON A SMALL SCALE BASIS AND HENCE NOT MAINTAINED THE REGULAR BO OKS OF ACCOUNT. HOWEVER, HE HAS SHOWN THE INCOME AND FILED THE RETURN OF INC OME BASED ON THE ACTUAL INCOME EARNED CONSIDERING THE NATURE OF BUSINESS HE HAS CARRIED OUT DURING THE YEAR UNDER CONSIDERATION. IT IS ALSO A FACT THA T NONE OF THE AUTHORITIES BELOW LEVYING AND CONFIRMING THE PENALTY, HAS NOT BEEN GI VEN ANY FINDINGS IN RESPECT ITA NO.2090/AHD/2010 A.Y 2006 -07 HIREN N CHASMAWALA V. ITO WD-9(2) SRT PAGE 3 OF THE FACT, THAT ASSESSEE BELONGS TO WHICH PROFESS ION AS NOTIFIED BY THE BOARD. SINCE NONE OF THE AUTHORITIES BELOW HAD NOTI FIED AND NOT BROUGHT ON RECORD THE PROFESSION OF THE ASSESSEE, MOREOVER THE CLAIM OF THE ASSESSEE FROM THE VERY BEGINNING IS THAT ASSESSEE HAS ENGAGE D IN THE ACTIVITY OF JOB WORK, WHICH IS BUSINESS AND NOT PROFESSION. HENCE, THE PENALTY LEVIED BY ASSESSING OFFICER AND CONFIRMED BY CIT(A) IS DELETE D AND THIS ISSUE OF ASSESSEES APPEAL IS ALLOWED. 5. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 04/02/2011 SD/- SD/- (N.S.SAINI) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER AHMEDABAD, DATED : 04/02/2011 *DKP COPY OF THE ORDER FORWARDED TO : 1. THE ASSESSEE. 2. THE REVENUE. 3. THE CIT(APPEALS)-V, SURAT 4. THE CIT CONCERNS. 5. THE DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER, /TRUE COPY/ DEPUTY / ASSTT.REGISTRAR ITAT, AHMEDABAD