Shri Rajnikant Hargovinddas Sanadia, Rajkot V. The ITO, Ward-2 (3)(5), Rajkot, Rajkot

ITA 267/RJT/2022

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 8591 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-02-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-01-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 13-11-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHRIK.LSOLANKI
• Assessee Lawyers: .ONCEITISESTABLISHEDTHATTHEBOOKSOFACCOUNTSWERENOTWRITTENUPWITHINTHEDUEDATEOF

Judgement Text

आयकरअपीलीयअधिकरण , राजकोटनयायपीी INTHEINCOMETAXAPPELLATETRIBUNAL, RAJKOTBENCH,RAJKOT (ConductedthroughVirtualCourt) BEFORESHRIWASEEMAHMED,ACCOUNTANTMEMBER And SHRITRSENTHILKUMAR,JUDICIALMEMBER आयकरअपीलसं./ITANo.267/Rjt/2022 धििाधरणवरध / Asstt.Year:2011-2012 RajnikantHargovinddasSanadia, SidhdiAptsBlockno.2, 10JunctionPlot, Rajkot. PAN:AGGPS6160F Vs. IncomeTaxOfficer, Ward-2(3)(5), Rajkot. (Applicant)(Respondent) Assesseeby:WrittenSubmission Revenueby:ShriK.LSolanki,Sr.DR सुिवाईकीतारीख /DateofHearing:25/01/2024 घोरणाकीतारीख /DateofPronouncement:21/02/2024 आदेश /ORDER PERWASEEMAHMED,ACCOUNTANTMEMBER: ThecaptionedappealhasbeenfiledattheinstanceoftheAssesseeagainst theorderoftheLearnedCommissionerofIncomeTax(Appeals),Rajkot,arisingin thematterofassessmentorderpassedunders.271BoftheIncomeTaxAct, 1961(here-in-afterreferredtoas"theAct")relevanttotheAssessmentYear 2011-2012. 2.TheonlyinterconnectedissueraisedbytheassesseeisthattheLd.CIT(A), erredinconfirmingthepenaltyofRs.42,627/-undertheprovisionsofsection 271BoftheAct. ITAno.267/Rjt/2022 Asstt.Year2011-2012 2 3.Inthepresentcase,theassesseehasfiledthereturnofincomeinresponse tothenoticeissuedu/s147oftheAct,whereinthegrossrevenuereceiptwas shownatRs.85,25,305/-only.However,theassesseefailedtofurnishthetax auditreportinthemannerprovidedu/s44ABoftheAct,andaccordinglytheAO leviedthepenaltyofRs.42,627.00undertheprovisionofsection271BoftheAct. 4.Onappeal,theLd.CIT(A)confirmedtheorderoftheAObyobservingas under: Ihaveconsideredthesubmissionoftheappellantandperusedtherelevantrecords. Appealhearingnoticesu/s250oftheI.T.Act,1961wereissuedon02.02.2021, 20.05.2022and14.09.2022fixinghearingon09.02.2021,26.05.2022and20.09.2022.In responseofthesaidnotices,theappellanthadstatedthathehadoptedforVivadSe Vishwasscheme.TheA.O.hadimposedpenaltyamountingtoRs.42,627/-u/s271Bfor failuretogethisaccountauditedu/s44ABoftheI.T.ActandfiledtotheA.O.before stipulateddate.Fromperusalofrecords,itwasfoundthattheassessmentwascompleted u/s144r.w.s.147.Showcausenoticesu/s274r.w.s.271Bwereissued.Inresponseto thatnoticestheappellantrequestedtokeeppenaltyproceedingsinabeyancetilldisposal ofquantumappeal.Subsequently,hehadoptedforVivadSeVishwasScheme-2020for quantumadditionmadeu/s144r.w.s.147.However,thiswillnotgranttheappellant immunityfromimpositionofpenaltyu/s271B. Aspersection3ofVivadSeVishwasAct,2020,thedeclarantwouldbeprovidedimmunity onlyforpenaltyleviedondisputedtax,incase,heoptsforVivadSeVishwasscheme.In thiscase,asmentionedabove,penaltywasleviedforatechnicaldefaulti.e,failuretoget hisaccountauditedu/s44ABoftheI.T.ActandfiledtotheAObeforestipulateddate. Thereforeconsideringthefactualmatrixofthecase,Ifindnomerittointerferewiththe orderu/s271BpassedbytheA.O.Penaltyu/s271BamountingtoRs.42,627/-is confirmed. 5.BeingaggrievedbytheorderoftheLd.CIT(A),theassesseeisinappeal beforeus. 6.TheLd.ARbeforeusfiledthereturnsubmissionsrunningfrompages1to 3wherein,amongothercondition,itwassubmittedthattheassesseefailedto maintainthebooksofaccountasmandatedundertheprovisionofsection44AAof theActandthereforepenaltyu/s271BoftheActcannotbeattracted.Onthe contrary,theLd.DRvehementlysupportedtheorderoftheauthoritiesbelow. 7.Wehaveheardtherivalcontentionsofboththepartiesandperusedthe materialsavailableonrecord.Attheoutset,wenotethatthisTribunalinidentical ITAno.267/Rjt/2022 Asstt.Year2011-2012 3 factsandcircumstancesinITAbearingNo.106&107/Rjt/2019inthecaseof ShriJaydevBavalalThummarVsITOhasdecidedtheissueinfavourofthe assesseebyobservingasunder: 8.1Onceitisestablishedthatthebooksofaccountswerenotwrittenupwithintheduedateof filingthereturnofincome,thequestionofgettingthemauditedtocomplytheprovisionofsection 44ABoftheAct,doesnotarise.Assuchthefirstdefaultoftheassesseeonstand-alonebasisisnon- maintenanceofbooksofaccountu/s44AAoftheActwhichiscompleteoffence.Insuchfactsand circumstancestheHon’bleGuwhatiHighCourtinthecaseofSurajmalPursumanreportedinin222 ITR691hasreportedasunder: Wehavegonethroughtheprovisionsofsections44AA,44AB,271Aand271BoftheAct. Maintenanceofaccountsisenvisagedundersection44AAandonfailuretodosothe assesseeshallbeguiltyandliabletobepenalisedundersection271A.Evenafter maintenanceofbooksofaccounttheobligationoftheassesseedoesnotcometoanend. Heisrequiredtodosomethingmore,i.e.,bygettingthebooksofaccountauditedbyan accountant.Butwhenapersoncommitsanoffencebynotmaintainingthebooksof accountascontemplatedbysection44AAtheoffenceiscomplete.Afterthattherecanbe nopossibilityofanyoffenceascontemplatedbysection44ABand,therefore,inouropinion, theimpositionofpenaltyundersection271Biserroneous.TheTribunalhasoverlookedthis aspectofthematter.Ofcourse,itisapparentfromtherecordsthattheassesseefailedto maintainthebooksofaccountasrequiredundersection44AAandforthatpenaltyis prescribedundersection271A.ItisfortheTribunaltotakeactioninaccordancewithlaw. Inviewoftheaboveobservations,weanswerthequestioninthenegativeandinfavourof theassessee. 8.2Likewise,theHon’bleHighCourtofAllahabadinthecaseofCITvs.BisauliTractors reportedin165taxman1hasheldasunder: 7.Itmaybementionedherethatseparatepenaltyhasbeenprovidedfornon-maintenance ofaccounts,i.e.,undersection271AoftheActandfornotgettingtheaccountsaudited andnotfurnishingtheauditreporti.e.,undersection271BoftheAct.Inthepresentcase, theAssessingOfficerdidnotimposepenaltyundersection271AoftheActandinstead proceededtoimposepenaltyundersection271BoftheAct.Ifapersonhasnotmaintained theaccountsbookoranyaccountsthequestionofitsauditdoesnotarise.Insuchanevent theimpositionofpenaltyundertheprovisioncontainedinsection271AoftheActforthe allegednon-complianceofsection44AAoftheActmayarisebuttheprovisionsofsection 44ABoftheActdoesnotgetviolatedincasewheretheaccountshavenotbeenmaintained atalland,therefore,penalprovisionsofsection271BoftheActwouldnotapply. 8.3ThePrincipleslaiddownbyHon’bleHighCourtaresquarelyapplicableintheinstantsetof facts.Therefore,theassesseecangettheimmunityfromthepenaltyspecifiedu/s271BoftheAct. 8.4RegardingthecontentionoftheLd.DRthattheassesseehaswrittenupthebooksof accountsismisplaced.Indeed,theassesseehaswrittenupbooksofaccountbutonalaterdate.As such,theLd.DRhasnotbroughtanyconcreteevidencejustifyingthatthebooksofaccountsofthe assesseewerewrittenupbeforetheduedateoffilingwrittenofincomeandthereforetheassessee hascontravenedtheprovisionsofsection44ABoftheAct.Inviewoftheabove,andafter consideringthefactsinentirety,weholdthattheassesseedidnotmaintainthebooksofaccounts withintheduedatespecifiedu/s139(1)oftheAct,soastocomplytheprovisionsofsection44ABof theAct.Accordingly,theassesseecannotbevisitedtothepenaltyfortheoffencecommittedbythe assesseefornotgettingaccountsaudited.Hence,wesetasidethefindingsofLd.CIT(A)anddirect theAOtodeletethepenaltyleviedbyhim.Thus,thegroundofappealoftheassesseeishereby allowed. 9.Intheresult,theappealfiledbytheassesseeisherebyallowed. ITAno.267/Rjt/2022 Asstt.Year2011-2012 4 8.BeforeusnomaterialhasbeenplacedonrecordbytheRevenue demonstratinganycontrarydecisionoftheHigherJudicialAuthorities.Beforeus, Revenuehasnotplacedanymaterialonrecordpointingoutanydistinguishing featureinthefactsofthecasefortheyearunderconsiderationandthatofthe casecitedabovenorplacedanycontrarybindingdecisioninitssupport.Thus, respectfullyfollowingtheorderofCo-ordinateBenchdiscussedabove,wehereby allowthegroundofappealoftheassessee. 9.Intheresult,theappealoftheassesseeisallowed. OrderpronouncedintheCourton21/02/2024atAhmedabad. Sd/-Sd/- (TRSENTHILKUMAR)(WASEEMAHMED) JUDICIALMEMBERACCOUNTANTMEMBER (TrueCopy) Ahmedabad;Dated21/02/2024 Manish