Sri. Murigeppa G. Muttur., Belgaum V. Income Tax Officer, Ward-2 (1), Belgaum., Belgaum

ITA 241/PAN/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 93477 (ITAT-PANAJI)
• Duration Of Justice: 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-06-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 17-07-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NISHANT K
• Assessee Lawyers: N N NAIK GAUNEKAR
• Section: 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PANAJI BENCH, PANAJI BEFORE SHRI GEORGE MATHAN , HONBLE JUDICIAL MEMBER AND SHRI N.K. BILLAIYA , HONBLE ACCOUNTANT MEMBER ITA NO. 241 /PNJ/2014 (ASST. YEAR : 200 8 - 0 9 ) SRI MURIGEPPA G. MUTTUR, H.NO. 4837/8, LIGHT HOUSE 2 ND MAIN, 1 ST CROSS, SADASHIV NAGAR, BELGAUM . VS. ITO , WARD - 2(1), BELGAUM PAN NO. AAFPM 5326 E (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI N.N. NAIK GAUNEKAR - CA DEPARTMENT BY : SHRI NISHANT K. - D.R. DATE OF HEARING : 15 / 0 6 /2015 . DATE OF PRONOUNCEMENT : 15 / 0 6 /201 5 . O R D E R PER N.K. BILLAIYA THIS IS AN APPEAL BY THE ASSESSEE IS PREFERRED AGAINST THE ORDER OF L D. CIT (A), BELGAUM , DATED 21 /0 5 /201 4 PERTAINING TO A.Y. 200 8 - 0 9 . 2. ASSESSEE IS A N ELECTRICAL CONTRACTOR FOLLOWING MERCANTILE SYSTEM OF ACCOUNTING. RETURN FOR THE YEAR WAS SELECTED FOR SCRUTINY ASSESSMENT. WHILE SCRUTINIZING THE RETURN OF INCOME, THE ASSESSING OFFICER NOTICED THAT THERE WAS AN ENTRY OF SUNDRY DEBTOR UNDER THE HEAD SUNDRY CREDITOR . THE ASSESSEE WAS ASKED TO EXPLAIN THE SAME. 2 ITA NO. 241 /PNJ/2014 THE ASSESSEE SUCCESSFULLY EXPLAINED THE MISTAKES OF ENTRIES IN THE BOOKS OF ACCOUNTS . ON FURTHER PERUSAL OF CONFIRMATIONS FURNISHED BY THE ASSESSEE, THE ASSESSING OFFICER NOTICED THAT THERE ARE SOME DIFFERENCE S IN THE BALANCE SHEET AMOUNT AND THE CONFIRMATIONS OF THE PARTIES, RESULTING INTO A CREDIT DIFFERENCE OF RS. 3,51,026/ - . THE ASSESSING OFFICER FURTHER PROCEEDED TO DISALLOW 5% OF THE TOTAL LABOUR CHARGES AMOUNTING TO RS. 1,27,787/ - . THE ASSESS MENT WAS COMPLETED BY MAKING TWO ADDITIONS NAMELY DIFFERENCE IN CREDITORS RS. 3,51,026/ - AND 5% LABOUR CHARGES RS. 1,27,787/ - . PENALTY PROCEEDINGS WERE INITIATED AND NOTICE U/S. 274 R.W.S. 271 OF THE ACT WAS ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE WAS ASKED TO EXPLAIN WHY THE PENALTY SHOULD NOT BE IMPOSED. THE ASSESSEE SUBMITTED THAT THE ADDITIONS HAVE BEEN MADE PURELY ON TECHNICAL MATTERS. THE ASSESSEE HAS NEITHER CONCEALED NOR HAS MADE FALSE REPRESENTATION OF FACTS. THE ASSESSING O FFICER DID NOT ACCEPT THIS SUBMISSION OF THE ASSESSEE AND LEVIED PENALTY OF RS. 1,47,952/ - . AGGRIEVED BY THIS, ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. 3. BEFORE US, COUNSEL FOR THE ASSESSEE STATED THAT THE ADDITIONS HAVE BEEN MADE ONLY ON THE BASIS OF UN - RE CONCILED DIFFERENCE BETWEEN THE 3 ITA NO. 241 /PNJ/2014 CREDITORS AS PER THE BOOKS AND AS PER THEIR RESPECTIVE CONFIRMATION LETTERS. COUNSEL FURTHER STATED THAT THE DISALLOWANC E OF 5% OUT OF LABOUR CHARGES IS PURELY ON ESTIMATE BASIS. COUNSEL CONCLUDED BY SAYING THAT THERE IS NEITHER FURNISHING INACCURATE PARTICULARS OF INCOME NOR CONCEALMENT OF INCOME. 4 . LEARNED DR STRONGLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW . 5. WE HAVE CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW. A PERUSAL OF THE ASSESSMENT ORDER SHOWS THAT AT PARA 6, THE ASSESSING OFFICER HAS MADE THE ADDITION OF RS. 3,51,026/ - ON ACCOUNT OF DIFFERENCE IN SUNDRY CREDITORS AS PER BALANCE SHEET AND AS PER RESPECTIVE CONFIRMATION LETTERS. AT PARA 7, THE ASSESSING OFFICER HAS DISALLOWED 5% OF THE TOTAL LABOUR CHARGES AND AT PARA 8, HE HAS FINALLY COMPUTED THE ASSESSED INCOME. IN THE PENALTY ORDER DATED 28/06/2011 , THE ASSESSING OFFICER HAS NOT BR OUGHT ANYTHING NEW IN ADDITION TO WHAT HE HAS SAID IN THE ASSESSMENT ORDE R. IN THE ASSESSMENT ORDER, THERE IS AN ENDORSEMENT WHICH READS AS ISSUE DEMAND NOTICE AND CHALLAN . INITIATE PENALTY PROCEEDINGS U/S. 271(1)(C) OF THE ACT . NOWHERE, THE ASSESSING OFFICER HAS RECORDED HIS 4 ITA NO. 241 /PNJ/2014 SATISFACTION FOR LEVY OF PENALTY. THE ASSESSMENT ORDER IS SILENT WHETHER THE PENALTY HAS BEEN L E V I ED FOR CONCEALMENT OF PARTICULAR OF INCOME OR FILING INACCURATE PARTICULARS OF INCOME. EVEN IN THE PENALTY ORDER, THERE IS NO REFERENCE IN THE PENALTY NOTICE. EVEN AFTER GOING THROUGH THE PENALTY ORDER, IT IS NOT CLEAR WHETHER PENALTY HAS BEEN LEVIED FOR CONCEALMENT OF INCOME OR FILING INACCURATE PARTICULARS OF INCOME. IN OUR CONSIDERED OPINION, PENALTY CANNOT BE LEVIED MERELY ON THE BASIS OF UN - RECONCILED AMOUNT UNDER THE HEAD SUNDRY CREDITORS. FURTHER DISALLOWANCE OF LABOUR CHARGES ON ESTIMATE BASIS WOULD NOT JUSTIFY THE LEVY OF PENALTY . CONSIDERING ALL THESE FACTS IN TOTALITY IN THE LIGHT OF OUR OBSERVATIONS MADE IN RESPECT OF THE ASSESSMENT ORDER AND THE PENALTY ORDER, WE SET ASIDE THE ORDER OF THE LD. CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE LEVY OF PENALTY. 6. IN THE RESU LT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ( ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JUNE , 201 5 ). S D / - S D / - ( GEORGE MATHAN ) ( N.K. BILLA I YA ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 1 5 T H JUNE , 201 5 . VR/ - 5 ITA NO. 241 /PNJ/2014 COPY TO: 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE LD. CIT 4 . THE CIT(A) 5 . THE D.R 6 . GUARD FILE. BY ORDER ASSISTANT REGISTRAR I.T.A.T., PANAJI 6 ITA NO. 241 /PNJ/2014 DATE INITIAL ORIGINAL DICTATION PAD IS ENCLOSED IN THE FILE 1. DRAFT DICTATED ON 1 5 .06.2015 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 1 6 .06.2015 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 1 6 /06/2015 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 1 6 /06/2015 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 1 6 /06/2015 SR.PS 6. DATE OF PRONOUNCEMENT 1 6 /06/2015 SR.PS 7. FILE SENT TO THE BENCH CLERK 16 /06/2015 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER