M/s. Bright Construction, Baroda V. The Income Tax Officer, Ward-2(3), Baroda

ITA 2127/AHD/2015

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1262 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-09-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• Appeal Filed On: 17-07-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: PRAKASH PATEL
• Section: 244A

Judgement Text

, B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ./ ITA NO.2127/AHD/2015 / ASSTT. YEAR: 2010-2011 BRIGHT CONSTRUCTION 3/1, BRIGHT CONSTRUCTION 3/1, R.K. CENTRE FATEGUNJ MAIN ROAD BARODA 390 002. PAN : AAEFB 6867 E VS THE ITO, WARD-2(3) VADODARA. / (APPELLANT) / (RESPONDENT) ASSESSEE BY : SHRI PRAKASH PATEL REVENUE BY : SMT. SMITI SAMANT, SR.DR ! / DATE OF HEARING : 21/09/2015 '#$ ! / DATE OF PRONOUNCEMENT: /09/2015 %& / O R D E R PER RAJPAL YADAV, JUDICIAL MEMBER: THE ASSESSEE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF THE CIT(A)-5, VADODARA DATED 12.3.2015 PASSED FOR THE A SSTT.YEAR 2010-11. 2. THE SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT T HE LD.CIT(A) HAS ERRED IN CONFIRMING THE PENALTY OF RS.72,204/- IMPO SED BY THE AO UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS PARTNERSHIP FIRM ENGAGED IN THE BUSINESS OF CONSTRUCTION. IT HAS FI LED ITS RETURN OF ITA NO.2127/AHD/2015 2 INCOME ON 7.10.2010 DECLARING NIL INCOME. THE LD.A O HAS SELECTED THE CASE OF THE ASSESSEE FOR SCRUTINY ASSESSMENT AND NO TICE UNDER SECTION 143(2) OF THE ACT, 1961 DATED 29.8.2011 WAS DULY IS SUED AND SERVED UPON THE ASSESSEE. ON SCRUTINY OF THE ACCOUNTS, TH E LD.AO HAS OBSERVED THAT A REFUND OF RS.6,73,880/- INCLUDED IN TEREST OF RS.72,204/- PERTAINING TO THE ASSTT.YEAR 2007-08 WA S PAID TO THE ASSESSEE ON 16.5.2009. SIMILARLY, ON 30.12.2009, T HE ASSESSEE WAS PAID REFUND OF RS.24,25,710/- INCLUDING INTEREST OF RS.1,69,238/- PERTAINING TO THE ASSTT.YEAR 2008-09. THUS, THE AS SESSEE HAD INTEREST INCOME ON ACCOUNT OF REFUND UNDER SECTION 244A OF R S.2,41,42/-. IT FAILED TO INCLUDE THIS INTEREST INCOME IN THE INCOM E TAX RETURN. HE MADE AN ADDITION OF THIS AMOUNT AND INITIATED PENALTY PR OCEEDINGS. ACCORDING TO THE LD.COUNSEL FOR THE ASSESSEE A REPLY DATED 16 .1.2013 WAS GIVEN TO THE AO, WHEREIN IT WAS CONTENDED THAT THE ALLEGED R EFUND WAS RECOGNIZED BY WAY OF INTERNAL ADJUSTMENT. THE ASSE SSEE WAS NOT GIVEN ANY AMOUNT THROUGH THE CHEQUE ETC. THE ASSESSEE WA S NOT AWARE ABOUT THIS ADJUSTMENT AND NO NOTICE WAS GIVEN TO TH E ASSESSEE. THE LD.AO IN THE PENALTY PROCEEDINGS HAS OBSERVED THAT NOTICE UNDER SECTION 271 WAS ISSUED ON 3.6.2013 AND 12.6.2013. THE ASSE SSEE DID NOT REPLY TO THESE NOTICES, HENCE, IT HAS NOTHING TO SAY IN I TS DEFENCE FOR THE PENALTY NOTICE. HE IMPOSED A PENALTY OF RS.75,000/ - UNDER SECTION 271(1)(C) OF THE ACT. 4. ON APPEAL, THE ASSESSEE HAS FILED A STATEMENT OF FACT, RUNNING INTO FOUR LINES. IN THE LAST LINE, IT HAS PLEADED THAT SUBMISSIONS DATED 16.1.2013 HAS NOT BEEN CONSIDERED BY THE AO BEFORE LEVY OF PENALTY. THE LD.CIT(A) HAS ALSO FAILED TO TAKE COGNIZANCE OF THIS ASPECT. THE LD.CIT(A) HAS REPRODUCED THE SUBMISSIONS OF THE ASS ESSEE, BUT, CONFIRMED THE ORDER OF THE AO. ACCORDING TO THE LD .CIT(A), FROM THE CONDUCT OF THE ASSESSEE, IT ABUNDANTLY CLEAR THAT I T HAS NOT BEEN ABLE TO ITA NO.2127/AHD/2015 3 DISCHARGE THE ONUS CASTED UPON IT FOR FURNISHING PL AUSIBLE AND SATISFACTORY EXPLANATION FOR THE PENALTY. 5. WITH THE ASSISTANCE OF THE LD. REPRESENTATIVES, WE HAVE GONE THROUGH THE RECORD CAREFULLY. IN THE SUBMISSIONS B EFORE THE LD.CIT(A), THE ASSESSEE HAS TAKEN THE FOLLOWING SPECIFIC PLEA: 6. NEITHER WE HAVE BEEN INFORMED BY ISSUING ANY NOTICE OF ADJUSTMENT U/S 245 NOR ANY AMOUNT OF REFUND ISSUED THROUGH BANK. IT WAS INTERNALLY ADJUSTED AGAINST THE DEMAND OF PREVIOUS YEARS WHICH WE HAVE BEEN INFORMED BY A.O. DURING PR OCEEDING. 7. AS SOON AS WE HAVE BEEN INFORMED REGARDING REF UND & INTEREST THEREON, WE IMMEDIATELY AGREED TO ADD INTE REST PART IN OUR INCOME AND REQUESTED TO PROVIDE COPY OF REFUND ORDER &DEMAND ADJUSTMENT LETTER. 8: WE HAVE REQUESTED TO A.O DURING THE PENALTY PR OCEEDING THAT WE HAVE NOT BEEN KNOWLEDGE OF REFUND INTEREST AND A LSO WE HAVE BEEN NOT RECEIVED TILL THE DATE ANY LETTER OF DEMAN D ADJUSTMENT OR REFUND ORDER FOR THE A.Y. 2007-08 & 2009-10 HOWEVER HE HAS NOT CONSIDERED OUR VIEW AND ORDERING PENALTY U/S. 271(L )(C). THE COPY OF SUBMISSION IS ENCLOSED FOR YOUR KIND REFERENCE. 9. THAT WE HAVE DECLARED TRUE INCOME ON THE BASIS OF BEST OF OUR KNOWLEDGE, FACT AND INFORMATION AVAILABLE WITH THE ASSESSEE & FILED CORRECT RETURN OF INCOME WITHOUT ANY INTENSIO N OF CONCEALMENT. 6. THE LD.FIRST APPELLATE AUTHORITY HAS NOT CONSIDE RED THIS SPECIFIC PLEA OF THE ASSESSEE. SIMILARLY, THE AO HAS ALSO N OT CONSIDERED THIS ASPECT. THE STAND OF THE ASSESSEE IS THAT IT WAS N OT SPECIFICALLY INFORMED ABOUT THE REFUND. THE ADJUSTMENT HAS BEEN MADE INTERNALLY, BY THE DEPARTMENT. THE MOMENT THIS FACT WAS BROUGH T TO THE NOTICE OF THE ASSESSEE, IT HAS ACCEPTED THE INCOME. TO OUR M IND, THE ASSESSEE WAS NOT GUILTY OF FURNISHING INACCURATE PARTICULARS OF INCOME OR CONCEALING OF INCOME. THE LD.FIRST APPELLATE AUTHO RITY HAS ERRED IN ITA NO.2127/AHD/2015 4 CONFIRMING THE PENALTY, AND ACCORDINGLY, WE DELETE THE PENALTY AND THE APPEAL OF THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE COURT ON 24 TH SEPTEMBER, 2015 AT AHMEDABAD. SD/- SD/- (MANISH BORAD) ACCOUNTANT MEMBER (RAJPAL YADAV) JUDICIAL MEMBER