Mohammed Nawaz Khan , Hyderabad V. Income Tax Officer, Ward-9(2), Hyderabad

ITA 2164/Hyd/2018

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 6108 (ITAT-HYDERABAD)
• Duration Of Justice: 3 year(s) 1 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-12-2021
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB-A
• Assessment Year: 2011-2012
• Appeal Filed On: 11-11-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: T. CHAITYANA KUMAR
• Section: 271B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “A”: HYDERABAD (THROUGH VIRTUAL CONFERENCE) BEFORE SH RI SAT B EER S INGH GO DA RA, JU DI CIA L MEMBE R and LAXMI PR AS AD S AH U, A CCOUNT ANT ME MBER ITA No. 2164/Hyd/2018 Assessment Year: 2011-12 Mohammed Nawaz Khan, Hyderabad. PAN – AJYPK 8786 A Vs. Income-tax Officer, Ward – 9(2), Hyderabad (Appellant) (Respondent) Assessee by: Shri T. Chaityana Kumar Revenue by: Shri T. Sunil Goutam Date of hearing: 15/12/2021 Date of pronouncement: 20/12/2021 O R D E R PER L.P. SAHU: This appeal filed by the assessee for AY 2011-12 is directed against CIT(A), Hyderabad’s order, dated 24/08/2018 involving proceedings u/s 271B of the Income Tax Act, 1961 ; in short “the Act”, on the following grounds of appeal: “1) The learned Commissioner of Income-tax (Appeals) is erroneous, illegal and held contrary to the facts of the instant case. ITA No. 2164/Hyd/2018 S h r i M o h a m m e d N a w a z K h a n , H y d . :- 2 -: 2) The learned Commissioner of Income-tax (Appeals) erred in not condoning the delay though the appellant has submitted a detailed explanation in all respects. 3) The learned Commissioner of Income-tax (Appeals) erred confirming the action of the assessing officer without considering the submissions of the appellant. 4) The learned Commissioner of Income-tax (Appeals) erred in confirming the action of the assessing officer in levying penalty u/s 271B of the I.T act an amount Rs.1,31,522/- without considering the submissions of the appellant. 5s) Any other grounds/ground may be urged at the time of hearing.” 2. We notice at the outset that assessee’s instant appeal suffers from 3 days delay in filing before the ITAT. To this effect, the assessee has filed a petition for condonation of the said delay along with an affidavit, wherein, inter-alia, submitted that since the assessee was out of station for purchase of material in connection with business, caused the impugned delay in filing of the instant appeal. Case law Collector Land Acquisition vs Mst. Katiji & Ors, 1987 AIR 1353 (SC) and University of Delhi Vs. Union of India, Civil Appeal No. 9488 & 9489/2019 dated 17 December, 2019, hold that such a delay; supported by cogent reasons, deserves to be condoned so as to make way for the cause of substantial justice. We accordingly hold that Revenue’s impugned delay is neither intentional nor deliberate but due to the circumstances beyond its control. The same ITA No. 2164/Hyd/2018 S h r i M o h a m m e d N a w a z K h a n , H y d . :- 3 -: stands condoned. Case is now taken up for adjudication on merits. 3. Briefly the facts of the case are that the assessee, engaged in the retail cloth business, filed his return of income for the AY 2011-12 on 27/09/2011 admitting income of Rs. 3,60,620/- and agricultural income of Rs. 1,50,000/-. Subsequently, the case was selected for scrutiny and accordingly, statutory notices were issued to the assessee. 3.1 During the course of assessment proceedings, the AO asked the assessee to submit books of account and audit report, but, the assessee only furnished rough books of account maintained by him and stated that the Auditor/CA audited only the basis of rough books maintained him. Further, it was stated that he was not aware of the statutory requirements and for the overall business transactions, he relied on his own rough books, but, could not produce audit report. Since the turn over of the assessee was more than the prescribed limit, the AO opined that the books of account of the assessee are required to get audited u/s 44AB. In the absence of production of books of account and audit report, the turnover including the cash deposits in the bank account maintained by the assessee was determined by the AO at Rs. 2,63,04,395/- and income was estimated on such turnover at 5%. ITA No. 2164/Hyd/2018 S h r i M o h a m m e d N a w a z K h a n , H y d . :- 4 -: 3.2 Since the assessee failed to submit the books of account and audit report, except furnishing rough books, the AO initiated penalty proceedings u/s 271B and imposed a penalty of Rs. 1,31,522/- which is 0.5% of the turnover. 4. Aggrieved by the order of the AO, the assessee preferred an appeal before the CIT(A) with a delay of 1038 days. The CIT(A) dismissed the appeal of the assessee on two counts, i) the delay of 1038 days in filing appeal before him was not condoned on the ground that the assessee failed to give proper reason for the said delay and ii) on merits also the CIT(A) confirmed the penalty on the ground that the assessee has not produced books of account and audit report before the AO and merely filed xerox copy of the audit report before him. 5. Before us, the ld. AR of the assessee besides reiterating the submissions made before the lower authorities, submitted that the assessee has maintained rough books as he is not aware of the statutory requirements to maintain regular books of account. He submitted that he got his rough books audited by Sri Bhisma & Associates, but, due to change of CA, the assessee could not furnish books of account and audit report u/s 44AB before the AO, which was beyond the control of the ITA No. 2164/Hyd/2018 S h r i M o h a m m e d N a w a z K h a n , H y d . :- 5 -: assessee. He, therefore, submitted that penalty levied by the authorities below may be quashed. 6. On the other hand, ld. DR strongly objected to the arguments of the ld. AR of the assessee and submitted that before filing of the return of income, assessee should have got the books audited and filed the return of income along with audit report, as the assessee is liable to get his books audited because the turnover of the assessee is more the prescribed limit under the IT Act. He submitted that since the assessee failed to get his books audited and filed audit report, the AO levied penalty u/s 271B of the Act. 7. We have considered the rival submissions and perused the material on record as well as gone through the orders of revenue authorities. It is observed that since the assessee has crossed his turnover limits as prescribed u/s 44AB, he has to get its books of account audited by a C.A. and get the audit report and along with the audit report he has to file his return of income. Since the assessee has failed to submit his regular books of account and audit report before the AO, the AO levied penalty u/s 271B of the IT Act. The submission of the assessee that due to the change of his CA, he could not furnish his audited books of account and audit report, but, he failed to substantiate his submission with documentary evidence. We also observe that there was a delay of 1038 days in filing the appeal ITA No. 2164/Hyd/2018 S h r i M o h a m m e d N a w a z K h a n , H y d . :- 6 -: before the CIT(A) and failed to explain proper reasons before the CIT(A) and the CIT(A) dismissed the appeal on the ground of delay also. Therefore, we are of the view that the penalty levied by the AO u/s 271B and confirmed by the CIT(A) is proper and hence, we do not find any infirmity in the order of the CIT(A) and upholding the same, we dismiss the grounds raised by the assessee on this issue. 8. In the result, appeal of the assessee is dismissed in above terms. Pronounced in the open court on 20 th December, 2021. Sd/- Sd/- (S.S. GODARA) (L.P. SAHU) JUDICIAL MEMBER ACCOUNTANT MEMBER Hyderabad, Dated: 20 th December, 2021. kv copy to : 1 Shri Mohammed Nawaz Khan, T. Chaitanya Kumar, Advocate, Flat No. 102, Gowri Apts., Urdu Lane, Himayathnagar, Hyderabad. 2 ITO, Ward – 9(2), Hyderabad 3 CIT(A) – 9, Hyderabad 4 Pr. CIT – 7, Hyderabad. 5 ITAT, DR, Hyderabad 6 Guard File. ITA No. 2164/Hyd/2018 S h r i M o h a m m e d N a w a z K h a n , H y d . :- 7 -: S.No. Details Date 1 Draft dictated on 2 Draft placed before author 3 Draft proposed & placed before the Second Member 4 Draft discussed/approved by Second Member 5 Approved Draft comes to the Sr. PS/PS 6 Kept for pronouncement 7 File sent to Bench Clerk 8 Date on which the file goes to Head Clerk 9 Date on which file goes to A.R. 10 Date of Dispatch of order