Shri Brij Gopal Chauhan, Noida V. ITO, New Delhi

ITA 2167/DEL/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5579 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 1 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-05-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 13-04-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: K R MANJANI
• Keywords: Reasonable cause; Corroborative evidences

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES A : DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER ITA.NO.2167/DEL./2015 ASSESSMENT YEAR 2010-2011 SHRI BRIJ GOPAL CHAUHAN, HOUSE NO.24, GALI NO.3, VILLAGE MAMURA, SECTOR-66, NOIDA, UTTAR PRADESH. PAN AHFPC5855M VS THE INCOME TAX OFFICER, WARD-60(4), NEW DELHI. (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI K.R. MANJANI, ADVOCATE FOR REVENUE : -NONE- DATE OF HEARING : 15.05.2018 DATE OF PRONOUNCEMENT : 22.05.2018 ORDER PER BHAVNESH SAINI, J.M. THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF THE LD. CIT(A)-19, NEW DELHI, DATED 09 .02.2015, FOR THE A.Y. 2010-2011, CHALLENGING THE LEVY OF PENALTY UNDER SECTION 271B OF THE I.T. ACT, 1961. 2 ITA.NO.2167/DEL./2015 SHRI BRIJ GOPAL CHAUHAN, NOIDA, UTTAR PRADESH. 2. BRIEFLY, THE FACTS OF THE CASE ARE THAT ASSESSE E DEALS IN SALE/PURCHASE OF PAINTS AND SANITARY WARES AND R ETURN OF INCOME WAS FILED ON 11.06.2010 AT A TOTAL INCOME OF RS.4,62,460/-. DURING ASSESSMENT PROCEEDINGS, ASSES SEE FAILED TO PRODUCE THE BOOKS OF ACCOUNT AND AUDIT REPORT UN DER SECTION 44AB AND THEREFORE, A.O. INITIATED THE PENALTY PROC EEDINGS UNDER SECTION 271B OF THE I.T. ACT. IN RESPONSE TO THE PENALTY NOTICE, ASSESSEE FURNISHED THE TAX AUDIT REPORT DAT ED 06.06.2010 FOR RELEVANT ASSESSMENT YEAR. SUBSEQUENT ENQUIRIES CONDUCTED BY A.O. INDICATED THAT THE ABOVE AUDIT RE PORT WAS FABRICATED DOCUMENT AND THE CONCERNED C.A. WHO SIGN ED THE AUDIT REPORT HAD STATED IN THE SWORN STATEMENT RECO RDED FROM HIM THAT HE HAD PREPARED TAX AUDIT REPORT WITHOUT E XAMINING THE BOOKS OF ACCOUNT OF THE ASSESSEE. THE A.O, THER EFORE, CONCLUDED THAT ASSESSEE HAD VIOLATED THE PROVISIONS OF SECTION 44AB AND LEVIED THE PENALTY OF RS.1 LAKH. 3. THE ASSESSEE CHALLENGED THE PENALTY ORDER BEFOR E LD. CIT(A). IT WAS SUBMITTED THAT ASSESSEE THOUGHT OF E XPANDING HIS 3 ITA.NO.2167/DEL./2015 SHRI BRIJ GOPAL CHAUHAN, NOIDA, UTTAR PRADESH. BUSINESS FOR WHICH PURPOSE HE THOUGHT OF TAKING LOA N OF RS.2 CRORES FROM THE BANK. ENQUIRIES REVEALED THAT HE CO ULD GET THE LOAN, IF HE SHOWS TURNOVER IN CRORES. ON THIS ACCOU NT, HE WITHOUT CONSIDERING ACTUAL SALES SHOWED MORE TURNOVER IN OR DER TO GET LOAN. HE, THEREFORE, GOT PREPARED AUDIT REPORT. LD. CIT(A) CONSIDERING EXPLANATION OF ASSESSEE CONFIRMED THE P ENALTY AND DISMISSED THE APPEAL OF ASSESSEE. HIS FINDINGS IN P ARAS 6 TO 9 OF THE ORDER ARE REPRODUCED AS UNDER : 6. IT IS CLEAR FROM THE ABOVE FACTS MENTIONED BY T HE APPELLANT THAT HE HAD OBTAINED A BOGUS AUDIT REPORT TO OBTAIN LOAN OF RS.2 CRORES FROM THE BANK. THEREFORE , THE APPELLANT HAD FILED THE RETURN OF INCOME SHOWING TU RNOVER OF RS.9,50,01,256/- FOR THE RELEVANT ASSESSMENT YEA R. THE ASSESSMENT ORDER SPECIFICALLY MENTIONS THAT THE APPELLANT VIDE HIS LETTER DATED 11.12.2012 HAD STAT ED THAT HIS BOOKS OF ACCOUNTS WERE MISPLACED. THE APPE LLANT REMAINED SILENT REGARDING HIS ACTUAL TURNOVER DURIN G THE ASSESSMENT PROCEEDINGS AND THEREFORE, THE ASSESSING 4 ITA.NO.2167/DEL./2015 SHRI BRIJ GOPAL CHAUHAN, NOIDA, UTTAR PRADESH. OFFICER CONCLUDED THAT THE APPELLANT HAD DELIBERATE LY VIOLATED THE PROVISIONS OF SECTION 44AB BY NOT GETT ING HIS BOOKS OF ACCOUNTS AUDITED IN SPITE OF SHOWING SUBST ANTIAL TURNOVER IN THE RETURN OF INCOME. 7. THE APPELLANT'S SUBMISSION DURING THE APPELLATE PROCEEDINGS WAS THAT HIS SALES DURING THE RELEVANT ASSESSMENT YEAR WAS ONLY RS.35,39,740/- BUT THE NEW SET OF PROFIT & LOSS ACCOUNT SUBMITTED IN SUPPORT OF THIS SALE FIGURES ARE NOT GENUINE AS IT SHOWS CREDITS ONLY OF SALES AND DEBITS ONLY OF PURCHASE & FREIGHT. THE APPELLANT HAD NOT DEBITED ANY OTHER EXPENSE IN THE PROFIT & LOSS ACCOUNT AND THE NEW SET OF PROFIT & LOSS ACCOUNT SUBMITTED WITH SALES OF RS.35,39,740/- IS ONLY AN AFTERTHOUGHT AND NOT BASED ON ANY EVIDENCE. SIMILARLY THE BALANCE SHEET SUBMITTED IN SUPPORT OF HIS CLAIM THAT SECTIO N 44AB IS NOT APPLICABLE TO HIM, ALSO IS NOT GENUINE, AS THE OPENING BALANCE, CASH-IN-HAND, CASH-IN- 5 ITA.NO.2167/DEL./2015 SHRI BRIJ GOPAL CHAUHAN, NOIDA, UTTAR PRADESH. BANK, FIXED ASSETS, ETC. VARIES FROM THE FIGURES MENTIONED IN THE EARLIER BALANCE SHEET SUBMITTED ALONG WITH THE RETURN OF INCOME. THEREFORE, IT IS DIFFICULT TO CONCLUDE THAT APPELLANTS SALE WAS ONL Y RS.35,39,740/- AS CLAIMED BY HIM IN THE PENALTY PROCEEDINGS AS THIS CLAIM IS NOT BASED ON ANY EVIDENCE. SINCE THE APPELLANT HAD SHOWN TURNOVER OF RS.9,50,01,256/- IN THE RETURN OF INCOME FILED B Y HIM, THE ONUS IS ON HIM TO PROVE THAT HIS ACTUAL SALES WERE BELOW THE LIMIT OF RS.40 LACS TO INDICAT E THAT THE PROVISIONS OF SECTION 44AB IS NOT APPLICAB LE TO HIM. 8. DURING THE APPELLATE PROCEEDINGS, THE APPELLANTS AUTHORIZED REPRESENTATIVE RELIED ON ALLAHABAD HIGH COURTS DECISION IN THE CASE OF M/S BISAULI TRACTORS REPORTED IN 299 ITR 219. BUT THE ABOVE CASE IS CLEARLY DISTINGUISHABLE AS THE RETURN OF INCOME IN THE ABOVE CASE WAS FILED WITHOUT THE 6 ITA.NO.2167/DEL./2015 SHRI BRIJ GOPAL CHAUHAN, NOIDA, UTTAR PRADESH. BALANCE SHEET AND THE PROFIT & LOSS ACCOUNT. IN THE CASE OF THE APPELLANT, THE PROFIT & LOSS ACCOUNT FI LED BY THE APPELLANT INDICATED THAT HE WAS LIABLE TO GE T HIS BOOKS OF ACCOUNTS AUDITED AS PER THE PROVISIONS OF SECTION 44AB OF THE INCOME TAX ACT, 1961. DURING THE PENALTY PROCEEDINGS, THE APPELLANT FILED AN AUDIT REPORT BEFORE THE ASSESSING OFFICER AND THE AUDITOR WHO HAD SIGNED THE AUDIT REPORT STATED THAT LIE HAD PREPARED THE SAME WITHOUT EXAMINING THE APPELLANTS BOOKS OF ACCOUNT. THEREFORE, THE APPELLANT HAD DELIBERATELY NOT GOT HIS BOOKS OF ACCOUNTS AUDITED AS REQUIRED UNDER THE PROVISIONS OF SECTION 44AB OF THE INCOME TAX ACT. FURTHER, DURING THE APPELLATE PROCEEDINGS THE APPELLANT STATED THAT HIS SALES DURING THE RELEVANT ASSESSMENT YEAR WAS ONLY RS.35,39,740/-, BUT FAILED TO PROVE THIS CLAIM WITH SUPPORTING EVIDENCE . AS THE APPELLANT FAILED TO PROVE THE ACTUAL TURNOVE R OF HIS BUSINESS, I HAVE NO OPTION BUT TO SUSTAIN TH E 7 ITA.NO.2167/DEL./2015 SHRI BRIJ GOPAL CHAUHAN, NOIDA, UTTAR PRADESH. PENALTY OF RS.1,00,000/- LEVIED BY ASSESSING OFFICER UNDER SECTION 27IB FOR VIOLATION OF THE PROVISIONS OF SECTION 44AB AND THE GROUNDS OF APPEAL ARE REJECTED. 9. AS A RESULT, APPEAL IS DISMISSED. 4. LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND S UBMITTED THAT ASSESSEE DID NOT MAINTAIN ANY BOOKS OF ACCOUNT , THEREFORE, THERE IS NO QUESTION OF GETTING THE SAME AUDITED. H E HAS SUBMITTED THAT ASSESSEE IN HIS STATEMENT ALSO CONFI RMED THAT NO BOOKS OF ACCOUNT HAVE BEEN MAINTAINED BY HIM. HE HAS SUBMITTED THAT EVEN MR. SUNDEEP KUMAR, C.A. IN HIS STATEMENT ALSO STATED THAT HE HAS SIGNED THE AUDIT REPORT FOR ASSESSMENT YEAR UNDER APPEAL WITHOUT EXAMINING OF THE BOOKS OF ACCOUNT. HE HAS, THEREFORE, SUBMITTED THAT SINCE NO BOOKS OF ACCOUNT HAVE BEEN MAINTAINED BY ASSESSEE, THEREFORE, PENALT Y NEED NOT BE IMPOSED FOR FAILURE TO GET THE ACCOUNTS AUDITED. 8 ITA.NO.2167/DEL./2015 SHRI BRIJ GOPAL CHAUHAN, NOIDA, UTTAR PRADESH. 5. NONE APPEARED ON BEHALF OF THE DEPARTMENT AT TH E TIME OF HEARING OF THE APPEAL. ON EARLIER OCCASION WHEN THE CASE WAS PASSED OVER SHRI RAVIKANT GUPTA, LD. D.R. WAS P RESENT IN THE COURT TO ARGUE THE APPEAL. 6. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARN ED COUNSEL FOR THE ASSESSEE AND PERUSED THE MATERIAL O N RECORD. THE ASSESSEE FILED RETURN OF INCOME SHOWING THE GRO SS RECEIPTS/ TURNOVER OF RS.9.50 CRORES. SUBSTANTIAL LOANS AND C APITAL HAVE ALSO BEEN SHOWN. SHRI SUNDEEP KUMAR, C.A. ATTENDED THE PROCEEDINGS BEFORE A.O. TIME TO TIME BUT BOOKS OF A CCOUNT HAVE NOT BEEN PRODUCED. THE ASSESSEE VIDE LETTER DATED 1 1.12.2012 SUBMITTED BEFORE A.O. THAT BOOKS OF ACCOUNT COULD N OT BE PRODUCED BECAUSE THE SAME ARE MISPLACED. THE AUDIT REPORT WAS ALSO NOT MADE AVAILABLE UNDER SECTION 44AB OF THE I .T. ACT BEFORE A.O. LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THA T THIS REPLY IS FILED BY THE C.A. OF THE ASSESSEE. THIS IS NO GR OUND TO CHALLENGE THE AUTHORITY OF COUNSEL FOR ASSESSEE. LE ARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT SHRI SUNDEE P KUMAR, 9 ITA.NO.2167/DEL./2015 SHRI BRIJ GOPAL CHAUHAN, NOIDA, UTTAR PRADESH. C.A. WAS DULY AUTHORISED BY THE ASSESSEE TO APPEAR BEFORE A.O. AT ASSESSMENT STAGE. THEREFORE, WHATEVER REPLY IS F ILED AT ASSESSMENT STAGE, HAS BEEN FILED ON BEHALF OF THE A SSESSEE WHICH SPECIFICALLY STATES THAT BOOKS OF ACCOUNT COU LD NOT BE PRODUCED AS THE SAME HAVE MISPLACED. IT WOULD, THER EFORE, SHOW THAT ASSESSEE MAINTAINED BOOKS OF ACCOUNT BUT SAME HAVE NOT BEEN PRODUCED BEFORE A.O. NO AUDIT REPORT WAS FILED OR PRODUCED BEFORE A.O. AS REQUIRED UNDER SECTION 44AB OF THE I .T. ACT. THE STATEMENT OF SHRI SUNDEEP KUMAR, C.A. WAS ALSO RECO RDED IN WHICH HE HAS DENIED TO HAVE PREPARED TAX AUDIT REPO RT UNDER SECTION 44AB OF THE I.T. ACT FOR ASSESSMENT YEAR UN DER APPEAL. WHEN HE WAS CONFRONTED THAT THE TAX AUDIT REPORT UN DER SECTION 44AB OF THE I.T. ACT IS PREPARED, HE HAS REPLIED TH AT HE HAS SIGNED AUDIT REPORT WITHOUT EXAMINING OF THE BOOKS OF ACCOUNT. THE A.O, THEREFORE, CORRECTLY NOTED THAT ASSESSEE H AS FABRICATED THE DOCUMENTS WHICH WERE PRODUCED AT ASSESSMENT STA GE. THE A.O. ALSO CORRECTLY NOTED THAT NO TAX AUDIT IN TERM S OF SECTION 44AB WAS CARRIED OUT AND WHATEVER DOCUMENTS HAVE BE EN PRODUCED BEFORE A.O. WERE NOT GENUINE DOCUMENTS. TH E 10 ITA.NO.2167/DEL./2015 SHRI BRIJ GOPAL CHAUHAN, NOIDA, UTTAR PRADESH. AUTHORITIES BELOW, THEREFORE, CORRECTLY NOTED THAT PROVISIONS OF SECTION 271B ARE CLEARLY ATTRACTED IN THIS CASE. LE ARNED COUNSEL FOR THE ASSESSEE ADMITTED THAT ASSESSEE OBTAINED LO AN OF RS.2 CRORES FROM THE BANK DURING ASSESSMENT YEAR UNDER A PPEAL ON THE BASIS OF THE DOCUMENTS PREPARED BY THE SAME CHA RTERED ACCOUNTANT. WHENEVER ANY BENEFIT IS TO BE OBTAINED, ASSESSEE OWNED ACTS OF HIS CHARTERED ACCOUNTANT, HOWEVER, WH EN SOME LIABILITY IS PUT UPON ASSESSEE, ASSESSEE DENIES THE ROLE OF HIS CHARTERED ACCOUNTANT. SUCH EXPLANATION OF ASSESSEE CANNOT BE ACCEPTED. THE ASSESSEE FURTHER EXPLAINED BEFORE LD. CIT(A) THAT HIS TURNOVER IS BELOW THE PRESCRIBED LIMIT. HOWEVER , NOTHING SUBSTANTIAL MATERIAL HAVE BEEN PRODUCED BEFORE AUTH ORITIES BELOW IN SUPPORT OF THE ABOVE CONTENTION. IN THIS C ASE, P & L A/C FILED BY THE ASSESSEE WITH RETURN INDICATES THA T ASSESSEE WAS LIABLE TO GET HIS BOOKS OF ACCOUNT AUDITED AS P ER PROVISIONS OF SECTION 44AB OF THE I.T. ACT. HOWEVER, THE ASSES SEE DELIBERATELY DID NOT GET HIS BOOKS OF ACCOUNT AUDIT ED AS REQUIRED UNDER SECTION 44AB OF THE I.T. ACT. WHATEVER REPORT WAS PRODUCED IS CLEARLY MANIPULATED AND FABRICATED AND WAS NOT 11 ITA.NO.2167/DEL./2015 SHRI BRIJ GOPAL CHAUHAN, NOIDA, UTTAR PRADESH. BASED UPON ANY EVIDENCE OR MATERIAL ON RECORD. SINC E THE ASSESSEE FAILED TO GET HIS ACCOUNTS AUDITED AS PER SECTION 44AB OF THE I.T. ACT, THEREFORE, ASSESSEE IS LIABLE TO P ENALTY UNDER SECTION 271B OF THE I.T. ACT. THE CONTENTIONS OF TH E ASSESSEE WOULD NOT DISCLOSE ANY REASONABLE CAUSE FOR FAILURE TO COMPLY WITH THE PROVISIONS OF LAW. THE CONTENTION OF ASSES SEE THAT SINCE NO BOOKS OF ACCOUNT HAVE BEEN PREPARED, THEREFORE, ACCOUNTS COULD NOT BE AUDITED, CANNOT BE ACCEPTED IN THE FAC TS AND CIRCUMSTANCES OF THE CASE BECAUSE ASSESSEE ADMITTED BEFORE A.O. THAT BOOKS OF ACCOUNT CANNOT BE PRODUCED ON TH E PRETEXT BEING MISPLACED. IN VIEW OF THE ABOVE, THE APPEAL O F ASSESSEE HAS NO MERIT AND THE SAME IS ACCORDINGLY DISMISSED. 7. IN THE RESULT, APPEAL OF ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (LP SAHU) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DELHI, DATED 22 ND MAY, 2018 VBP/- 12 ITA.NO.2167/DEL./2015 SHRI BRIJ GOPAL CHAUHAN, NOIDA, UTTAR PRADESH. COPY TO 1. THE APPLICANT 2. THE RESPONDENT 3. CIT(A) CONCERNED 4. CIT CONCERNED 5. D.R. ITAT A BENCH, DELHI 6. GUARD FILE. // BY ORDER // ASSISTANT REGISTRAR : ITAT DELHI BENCHES : DELHI.