Sir Gurmeet Singh Sachdev, Kanchili V. The ITO Ward-2 Srikakulam, Srikakulam

ITA 251/VIZ/2011

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 56874 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 4 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 14-12-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 01-08-2011
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: D KOMALI KRISHNA
• Keywords: Reasonable cause
• Section: 133A

Judgement Text

I 1 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B.R. BASKARAN, ACCOUNTANT MEMBER ITA NOS.251 TO 255/VIZAG/20 11 ASSESSMENT YEARS : 2004-05 TO 2008-09 GURMEET SINGH VS- INCOME-TAX OFFICER, SACHDEV, KANCHILLI, WARD-2, SRIKAKULAM. SRIKAKULAM. (PAN: APMPS 8038 K) VS. (APPELLANT) (RESPONDENT) APPELLANT BY: NONE RESPONDENT BY: SHRI D. KOMALI KRISHNA DATE OF HEARING: 14-12-2011 DATE OF PRONOUNCEMENT: 14 -12-2011. ORDER PER SHRI B.R. BHASKARAN, ACCOUNTANT MEMBER:- ALL THESE APPEALS, FILED BY THE ASSESSEE ARE DIREC TED AGAINST THE COMMON ORDER DATED 13-5-2011 PASSED BY THE LEARNED CIT (A), VISAKHAPATNAM AND THEY RELATE TO THE ASSESSMENT YEA RS 2004-05 TO 2008-09. NONE APPEARED ON BEHALF OF THE ASSESSEE, THOUGH THE NOTICES OF HEARING WERE SERVED UPON HIM WELL IN ADVANCE. HENCE, WE PROCEED TO DISPOSE OF THESE CASES EX PARTE, QUA THE ASSESSEE. SINCE THE ISSUES URGED IN THESE APPEAL ARE IDENTICAL IN NATURE, WE PREFER TO DISPOSE OF THESE APPEALS BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. ITA 251 TO 255 OF 2011 GURMEET SINGH SACHDEV, KAMCHILI. =============== 2 2. ALL THE GROUNDS RAISED BY THE ASSESSEE GIVE RISE TO A SINGLE ISSUE VIZ., WHETHER THE LEARNED CIT (A) IS JUSTIFIED IN CONFIRM ING THE PENALTIES LEVIED UNDER SECTION 271B OF THE ACT IN ALL THESE YEARS. 3. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE ASSESSEE IS A COCONUT MERCHANT CARRYING ON THE BUSINESS AT KANCHI LI VILLAGE, SRIKAKULAM IN THE NAME AND STYLE OF M/S. SINGH ENTERPRISES. THE A SSESSEE IS ALSO CARRYING ON BUSINESS IN ORGANIC MANURES AT CHANDIGARH IN TH E SAME BUSINESS NAME. HE IS THE PROPRIETOR OF BOTH THESE BUSINESSES. THE YEAR-WISE TURNOVERS REPORTED BY THE ASSESSEE IN THESE TWO BUSINESSES AR E GIVEN BELOW:- ASST. YR. COCONUT BUSINESS ORGANIC MANURE BUSINESS TOTAL (RS.) (RS.) (RS.) 2004-05 6,97,074 1,21,44,320 1,28,41,394 2005-06 1,06,267 2,23,83,456 2,24,89,723 2006-07 1,53,42,294 3,35,39,693 4,88,81,987 2007-08 55,31,026 3,93,93,868 4,49,14,894 2008-09 79,82,242 2,71,21,145 3,51,03,387 THE ASSESSEE DID NOT FILE RETURN OF INCOME IN ANY O F THESE YEARS. HOWEVER, HE WAS IN THE HABIT OF PAYING ADVANCE-TAX IN TIME. A SURVEY OPERATION UNDER SECTION 133A OF THE ACT WAS CONDUCTED IN THE BUSINE SS PREMISES OF THE ASSESSEE ON 17-10-2008 AND AT THAT TIME, IT CAME TO LIGHT THAT THE ASSESSEE DID NOT COMPLY WITH THE PROVISIONS OF SECTION 44AB BY GETTING HIS ACCOUNTS AUDITED AND FILING THE SAME BEFORE THE ASSESSING OF FICER. ACCORDINGLY, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS UND ER SECTION 271B OF THE ACT. AFTER HEARING THE ASSESSEE, THE ASSESSING OFFICER L EVIED PENALTIES AT THE RATE PRESCRIBED IN THAT SECTION FOR ALL THESE YEARS. TH E ASSESSEE CHALLENGED THE SAID PENALTY ORDER BEFORE THE LEARNED CIT (A) WHO C ONFIRMED THE PENALTIES LEVIED BY THE ASSESSING OFFICER. AGGRIEVED BY THE ORDER OF THE LD. CIT (A), THE ASSESSEE IS IN APPEAL BEFORE US. ITA 251 TO 255 OF 2011 GURMEET SINGH SACHDEV, KAMCHILI. =============== 3 4. THE LEARNED DEPARTMENTAL REPRESENTATIVE SUBMITTE D THAT THE REASONS FURNISHED BY THE ASSESSEE FOR NOT COMPLYING WITH TH E PROVISIONS OF SECTION 44AB WERE VERY VAGUE AND HENCE THE ASSESSEE HAS FAI LED TO SHOW THAT THERE WAS A REASONABLE CAUSE FOR THE SAID FAILURE. 5. WE HAVE HEARD THE LEARNED DEPARTMENTAL REPRESENT ATIVE AND CAREFULLY PERUSED THE RECORDS. THE LEARNED CIT (A) HAS CONFIR MED THE PENALTIES LEVIED IN ALL THESE YEARS WITH THE FOLLOWING OBSERVATIONS: - 5. THE APPELLANTS AUTHORIZED REPRESENTATIVE FILED WRITTEN SUBMISSIONS BEFORE ME WHEREIN IT WAS MORE OR LESS REITERATED TH E SAME ARGUMENTS. THE APPELLANTS CONTENTION CANNOT BE ACCEPTED IN VIEW O F THE FOLLOWING FACTUAL AND LEGAL POSITION. (A) PAYING ADVANCE TAX AND FILING RETURNS AND GETTING ACCOUNTS AUDITED ARE DIFFERENT OBLIGATIONS UNDER THE ACT AND ARE COVERED BY DIFFERENT PROVISIONS OF LAW. THE CONSEQUENCES OF EACH COMMISSION/OMISSI ON ARE CLEARLY BROUGHT OUT IN THE ACT AND ARE NOT INTERDEPENDENT. (B) THE APPELLANTS ARGUMENT THAT THERE WAS NO INTENTIO N TO EVADE TAX, IS NOT RELEVANT AS THE INTENTION TO EVADE TAX AND MAINTAIN ING BOOKS OF ACCOUNTS/GETTING THEM AUDITED ARE TWO DIFFERENT ISS UES AND CANNOT BE EQUATED. AS MAINTAINING BOOKS OF ACCOUNTS AND GETT ING THEM AUDITED WILL NOT ABSOLVE THE APPELLANT FROM PENALTY UNDER SECTIO N 271(1)(C) IN CASE OF CONCEALMENT. NON CONCEALMENT WILL ALSO NOT ABSOLVE THE APPELLANT FROM THE STATUTORY OBLIGATION CAST UPON BY THE ACT U/S 4 4AB. (C) ANOTHER ARGUMENT RAISED BY THE APPELLANT IS THAT HE HAD PERSONAL PROBLEMS. A PERUSAL OF THE APPELLANTS BUSINESS TU RNOVER SHOWS THAT THERE IS CONTINUOUS IMPROVEMENT IN THE TURNOVER OF THE BUSINESS WHICH SHOWS THAT THE APPELLANT IS FULLY AND TRULY INVOLVE D IN THE BUSINESS ACTIVITIES. THIS CLEARLY SHOWS THAT THE APPELLANT S PERSONAL PROBLEMS, IF ANY, DID NOT COME IN THE WAY OF HIS SUCCESSFUL COND UCT OF BUSINESS AT TWO PLACES. CONDUCT OF THE BUSINESS REQUIRES THE INVOL VEMENT OF THE APPELLANT WHO IS THE PROPRIETOR WHEREAS THE MAINTEN ANCE OF BOOKS OF ACCOUNT AND GETTING THEM AUDITED IS MORE OF A PROCE DURAL REQUIREMENT ITA 251 TO 255 OF 2011 GURMEET SINGH SACHDEV, KAMCHILI. =============== 4 WHICH CAN BE MET BY APPOINTMENT OF AN ACCOUNTANT/AU DITOR. THE SO- CALLED PROBLEMS WHICH NEVER CAME IN THE WAY OF COND UCTING THE BUSINESS, COULD NOT HAVE BEEN THE REASON FOR NOT GETTING THE BOOKS OF ACCOUNTS AUDITED. (D) THE APPELLANTS CONDUCT OVER A PERIOD OF TIME CLEAR LY REFLECTS HIS CALLOUS ATTITUDE AND THE SCANT RESPECT HE HAS TOWARDS DISCH ARGE OF STATUTORY OBLIGATIONS. THE APPELLANTS DEFAULT IS REGULAR AN D CONTINUOUS AND IS PERPETUATED OVER THE YEARS. (E) THIS DEFAULT OF THE APPELLANT COULD NOT HAVE COME T O LIGHT BUT FOR THE INVESTIGATIONS CARRIED OUT AND SURVEY OPERATION CON DUCTED BY THE DEPARTMENT. (F) THE PAYMENT OF ADVANCE TAX AND NON FILING OF RETURN S IS ONLY A PLOY TO AVOID INTEREST BURDEN WITHOUT DISCLOSING HIS COMPLE TE ACTIVITIES/DETAILS OF ASSETS AND LIABILITIES, INCOME AND EXPENDITURE TO T HE DEPARTMENT. THE APPELLANTS FAILURE IS ABSOLUTE ONE AS THE APPELLAN T FAILED TO GET HIS ACCOUNTS AUDITED OVER A PERIOD OF FIVE CONTINUED YE ARS. 5.2 UNDER THE INCOME-TAX ACT, THERE ARE SEPARATE PE NALTY CONSEQUENCES PRESCRIBED FOR NOT FILING THE RETURNS OF INCOME, NO T GETTING ACCOUNTS AUDITED AND THE APPELLANTS CONTINUED INFRINGEMENT OF TAX L AWS WITH REGARD TO GETTING HIS BOOKS OF ACCOUNTS AUDITED, CANNOT BE VIEWED LIG HTLY AS IT REFLECTS THE CARELESS ATTITUDE OF THE APPELLANT TOWARDS THE PROV ISIONS OF THE INCOME-TAX ACT, 1961. 6. IN VIEW OF THE ABOVE, I AM OF THE CONFIRMED OPIN ION THAT THE APPELLANT HAS NO VALID REASON FOR NOT GETTING HIS ACCOUNTS AU DITED AND HENCE IS LIABLE FOR LEVY OF PENALTY AS PRESCRIBED UNDER THE ACT. UNDER THE CIRCUMSTANCES, I UPHOLD THE ACTION OF THE ASSESSING OFFICER IN LEVYI NG THE PENALTY. AS A RESULT, APPELLANTS APPEAL IS DISMISSED. WE HAVE CAREFULLY PERUSED THE ORDER OF THE LEARNED CIT (A) FOR ALL THE YEARS UNDER CONSIDERATION AND NOTICED THAT HE HAD TAKEN A CONSCIOUS DECISION AFTER ANALYZING ALL THE FACTS OF THESE CASES. IN VIEW OF THE ABOVE, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LE ARNED CIT (A) AND ACCORDINGLY WE UPHOLD THE SAME. ITA 251 TO 255 OF 2011 GURMEET SINGH SACHDEV, KAMCHILI. =============== 5 6. IN THE RESULT, ALL THE APPEALS FILED BY THE ASSES SEE STAND DISMISSED. ORDER WAS PRONOUNCED IN THE OPEN COURT ON 14-12-20 11. SD/- SD/- (D. MANMOHAN) (B.R. BASKARAN) VICE PRESIDENT ACCOUNTANT MEMBER JMR* VISAKHAPATNAM, DATED 14-12-, 2011 COPY TO 1 GURMEET SINGH SACHDEV, PROP. SINGH ENTERPRISES, K ANCHILI, SRIKAKULAM DISTRICT. 2 INCOME-TAX OFFICER, WARD-2, SRIKAKULAM. 3 CIT, RAJAHMUNDRY 4 THE CIT(A), VISAKHAPATNAM. 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM