Shri Rohit Pravinchandra Panwala, Surat V. The ACIT.,Cent.Circle-4, Surat

ITA 2549/AHD/2011

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 0954 (ITAT-AHMEDABAD)
• Duration Of Justice: 4 year(s) 9 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 24-06-2016
• Assessment Year: 1999-2000
• Appeal Filed On: 13-10-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DINESH SINGH
• Assessee Lawyers: RASESH SHAH
• Keywords: Difference of opinion; Condonation of delay
• Section: 143(3); 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER ./ ITA.NO.2549 AND 2550/AHD/2011 / ASSTT. YEAR: 1999-2000 AND 2000-2001 SHRI ROHIT PRAVINCHANDRA PANWALA 4/1886, BEGAMPURA MUMBAIWAD, SURAT 395 003. PAN : ABGPP 5993 G VS ACIT, CENT.CIR.4 SURAT. ! / (APPELLANT) '# ! / (RESPONDENT) ASSESSEE BY : SHRI RASESH SHAH REVENUE BY : SHRI DINESH SINGH, SR.DR / DATE OF HEARING : 24/06/2016 / DATE OF PRONOUNCEMENT: 01/08/2016 $%/ O R D E R PRESENT TWO APPEALS ARE DIRECTED AT THE INSTANCE OF THE ASSESSEE AGAINST THE COMMON ORDER OF THE LD.CIT(A)-II, AHMEDABAD DAT ED 24.1.2011 PASSED FOR THE ASSTT.YEAR 1999-2000 AND 2000-01. 2. SOLITARY GRIEVANCE OF THE ASSESSEE IS THAT THE L D.CIT(A) HAS ERRED IN CONFIRMING THE PENALTY OF RS.57,791/- AND RS.1,23,3 53/- IMPOSED BY THE AO UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 IN ASSTT.YEAR 2009-00 AND 2000-01 RESPECTIVELY. 3. REGISTRY HAS POINTED OUT THAT BOTH THESE APPEALS ARE TIME BARRED BY 195 DAYS. IN ORDER TO EXPLAIN THE DELAY, THE ASSESSEE HAS FILED APPLICATION FOR CONDONATION OF DELAY. HE HAS ALSO FILED AFFIDAVIT. IN THE AFFIDAVIT, THE ASSESSEE HAS DEPOSED THAT ON RECEIPT OF CIT(A)S OR DER, HE HAS HANDED OVER THE ORDER TO HIS BROTHER-IN-LAW, SHRI SUKHDEV TANNA FOR GETTING SECOND APPEAL ITA NO.2549 AND 2550/AHD/2011 2 PREPARED THROUGH M/S.RASESH SHAH & ASSOCIATES, CHAR TERED ACCOUNTANTS. BUT SOMEHOW, HE COULD NOT DELIVER THE APPELLATE ORD ER TO THE OFFICE OF THE CA. WHEN THE ASSESSEE CAME TO KNOW ABOUT THIS FACT, HE ENQUIRED AND ULTIMATELY, THE ORDER WAS DELIVERED IN THE OFFICE OF THE CA IN THE MONTH OF SEPTEMBER, 2011. ACCORDING TO THE ASSESSEE, THE DELAY IN FILI NG THE APPEAL WAS OCCURRED ON ACCOUNT OF BONA FIDE MISTAKE HAPPENED WITH THE FAMILY MEMBER. THE LD.COUNSEL FOR THE ASSESSEE PRAYED FOR CONDONATION OF DELAY IN FILING THE APPEAL. 4. ON THE OTHER HAND, THE LD.DR CONTENDED THAT THE EXPLANATION GIVEN BY THE ASSESSEE IS VERY VAGUE. IT IS NOT SPECIFIC AN D TO THE POINT. THE ASSESSEE FAILED TO DISCLOSE WHEN HE CAME TO KNOW ABOUT THE N ON-SUBMISSION OF THE ALLEGED APPELLATE ORDER TO THE TAX CONSULTANT. 5. I HAVE DULY CONSIDERED RIVAL CONTENTIONS AND GON E THROUGH THE RECORD CAREFULLY. THE EXPLANATION OF THE ASSESSEE IS THAT HE HAS HANDED OVER THE ORDERS OF THE LD.CIT(A) TO HIS BROTHER-IN-LAW FOR S UPPLYING TO THE TAX CONSULTANTS. SOMEHOW, HE FAILED TO CARRY OUT THE I NSTRUCTIONS OF THE ASSESSEE. TO MY MIND, ON ACCOUNT OF SOME DAY-TO-DAY PROBLEM I N THE LIFE, POSSIBILITY OF SLIPPING THIS TYPE OF MATTER CANNOT BE RULED OUT, M ORE SO, SHRI SUKHDEV TANNA WAS NOT GOING TO BE DIRECTLY AFFECTED BY NON-FILING OF THE APPEAL IN TIME. MAKING OF THE APPEAL TIME BARRED CANNOT BE ADOPTED AS DILATORY STRATEGY BY THE ASSESSEE, BECAUSE NON-FILING OF THE APPEAL WOUL D NOT RESULT IN ANY GAIN TO THE ASSESSEE. IN OTHER WORDS, THE ASSESSEE WILL NO T GET ANYTHING BY MAKING THE APPEAL TIME BARRED. THUS, POSSIBILITY OF HUMAN ERR OR CANNOT BE RULED OUT. I ALLOW APPLICATIONS FOR CONDONATION OF DELAY AND CON DONE THE DELAY IN FILING BOTH THE APPEALS. I PROCEED TO DECIDE THE APPEALS ON MERIT. 6. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HA S FILED HIS RETURN OF INCOME ON 30.9.1999 AND 31.8.2000. TOTAL INCOME AT RS.58,126/- AND ITA NO.2549 AND 2550/AHD/2011 3 RS.69,274/- WERE DECLARED FOR THE ASSTT.YEARS 1999- 200 AND 2000-01 RESPECTIVELY. THE AO HAS DETERMINED THE TAXABLE IN COME UNDER SECTION 143(3) R.W.S. 147 ON 28.12.2006 AT RS.3,65,010/- AN D ON 28.12.2006 AT RS.5,41,960/-. HE MADE DISALLOWANCE OF COMMISSION INCOME AND OTHER ADDITIONS. ULTIMATELY, THE ISSUE TRAVELLED TO THE TRIBUNAL AND THE ADDITIONS HAVE BEEN PARTLY DELETED. 7. BRIEF BACKGROUND OF THE ASSESSMENT OF THE ASSESS EE IS THAT DURING THE ASSESSMENT PROCEEDINGS, IN THE CASE OF M/S.ROOP DYE ING AND PRINTING MILLS, IT CAME TO THE NOTICE OF THE DEPARTMENT THAT M/S.ROOP DYEING AND PRTG.MILLS HAD SHOWN PURCHASE OF COLOUR AND CHEMICALS FROM M/S .POOJA DYECHEM. AN INQUIRY WAS MADE BY THE DEPARTMENT. THEN, IT REVEA LED THAT M/S.POOJA DYECHEM WAS ONLY ISSUING BILLS AND IT BELONGS TO TH E ASSESSEE. THUS, COMMISSION INCOME FOR ISSUANCE OF SUCH BILLS HAS BE EN WORKED OUT IN THE HANDS OF THE ASSESSEE. THE ASSESSEE HAS CLAIMED EX PENDITURE AT RS.52,846/- AND RS.89,556/- IN THE ASSTT.YEARS 1999-2000 AND 20 00-01 AS EXPENDITURE WHICH IS 40% OF THE COMMISSION INCOME. THIS EXPEND ITURE WAS ALLOWED TO THE ASSESSEE AT 20%. SIMILARLY, THE ASSESSEE HAS S HOWN COMMISSION INCOME ON THE BUSINESS OF CHEQUE DISCOUNTING AT THE RATE O F 0.08%, BUT ADDITION WAS MADE BY APPLYING RATE OF 0.25%. THE LD.AO HAS MADE ADDITION OF RS.75,000/- IN EACH ASSESSMENT YEAR ON ACCOUNT OF UNEXPLAINED C ASH CREDITS. THESE ADDITIONS HAVE BEEN REDUCED TO RS.21,000/- AND 18,0 00/-. THE CONTENTION OF THE ASSESSEE BEFORE THE AO WAS THAT HIS INCOME HAS BEEN DETERMINED ON AN ESTIMATE BASIS, THEREFORE, HE DOES NOT DESERVES TO BE VISITED WITH PENALTY. THE LD.AO WAS NOT SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND IMPOSED PENALTY OF RS.57,791/- AND RS.1,23,353/- FOR THE A SSTT.YEARS 1999-2000 AND 2000-01 RESPECTIVELY. APPEAL TO THE LD.CIT(A) DID NOT BRING ANY RELIEF TO THE ASSESSEE. ITA NO.2549 AND 2550/AHD/2011 4 8. WITH THE ASSISTANCE OF THE LD.REPRESENTATIVES, I HAVE GONE THROUGH THE RECORD CAREFULLY. THE LD.FIRST APPELLATE AUTHORITY WAS OF THE OPINION THAT ESTIMATION OF INCOME IN THE PRESENT CASE IS NOT RES ULT OF SOME DIFFERENCE OF OPINION BETWEEN THE ASSESSEE AND THE AO, RATHER, TH E DEPARTMENT WAS NOT ABLE TO LAY ITS HAND ON THE MATERIAL EXHIBITING UNDISCLO SED INCOME WHICH WAS NOT SHOWN BY THE ASSESSEE TO THE DEPARTMENT. THUS, INC OME WAS DETERMINED ON AN ESTIMATE BASIS. IT EMERGES OUT FROM THE ASSESSMENT ORDER THAT AN INCOME OF RS.1,37,396/- WAS DISCLOSED BY THE ASSESSEE ON 13.5 .2006 WHEN NOTICE UNDER SECTION 148 WAS ISSUED TO THE ASSESSEE. THE ASSESS EE HIMSELF HAS SHOWN THE INCOME FROM CHEQUE DISCOUNTING. HE CLAIMED ESTIMAT ED EXPENDITURE FOR SUCH ACTIVITY. THUS, ULTIMATELY, THE INCOME OF THE ASSE SSEE WAS DETERMINED ON AN ESTIMATE BASIS. THE AO IN THE PENALTY ORDER HAS NO T ALLEGED THAT THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OR CONCEALED T HE INCOME. HE SIMPLY OBSERVED THAT I AM FULLY SATISFIED THAT THE ASSESS EE DEFAULTED WITHIN THE MEANING OF SECTION 271(1)(C) OF THE ACT, AND THEREB Y ATTRACTED A MINIMUM PENALTY AT THE RATE OF HUNDRED PERCENT. THERE IS NO DISPUTE THAT INCOME OF THE ASSESSEE WAS DETERMINED ON AN ESTIMATE BASIS. IT IS SETTLED POSITION OF THE LAW, NO PENALTY UNDER SECTION 271(1)(C) OF THE ACT SHOUL D BE IMPOSED ON AN ESTIMATED INCOME. THEREFORE, I DO NOT FIND ANY MER IT IN THE ORDERS OF THE REVENUE AUTHORITIES IMPOSING PENALTY UNDER SECTION 271(1)(C) OF THE ACT, WHICH IS DELETED, AND GROUNDS TAKEN BY THE ASSESSEE IN BOTH THE APPEALS ARE ALLOWED. 9. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOW ED. ORDER PRONOUNCED IN THE COURT ON 1 ST AUGUST, 2016 AT AHMEDABAD. SD/- (RAJPAL YADAV) JUDICIAL MEMBER AHMEDABAD; DATED 01/08/2016