Ashish Chaudhary, Muzaffarnagar V. ITO, Muzaffarnagar

ITA 2753/DEL/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2748 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 1 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 05-06-2013
• Assessment Year: 2009-2010
• Appeal Filed On: 06-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BHIM SINGH

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : A NEW DELHI BEFORE SHRI A.D. JAIN , JM AND SHRI J.SUDHAKAR RED DY, AM ITA NO. 2753/DEL/2012 ASSESSMENT YEA R : 2008-09 SH. ASHISH CHAUDHARY VS. ITO, WARD 1(1) 1284/85A, SANTOSH VIHAR MUZAFFARNAGAR CIRCULAR ROAD, MUZAFFARNAGAR PAN: AGFPC 4110 N (APPELLANT) (RESPONDENT) APPELLANT BY:- SH.PRATAP GUPTA, C.A. RESPONDENT BY:- SH. BHIM SINGH, SR . D.R O R D E R PER J.SUDHAKAR REDDY, AM THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AGAINST THE ORDER OF THE LD.CIT(A), MUZAFFARNAGAR DATED 23.01.2012 PERTA INING TO THE ASSESSMENT YEAR 2008-09. 2. WE HAVE HEARD MR.PRATAP GUPTA, THE LD.COUNSEL F OR THE ASSESSEE AND SHRI BHIM SINGH, THE LD.SR.D.R. ON BEHALF OF THE RE VENUE. 3. ON A CAREFUL CONSIDERATION OF THE FACTS AND CIRC UMSTANCES OF THE CASE AND ON PERUSAL OF THE PAPERS ON RECORD AND ORDERS O F THE AUTHORITIES BELOW, CASE LAWS CITED, WE HOLD AS FOLLOWS. 2 4. THE LD.COMMISSIONER OF INCOME TAX (APPEALS) IN T HIS CASE HAS REFUSED TO CONDONE THE DELAY IN FILING THE APPEAL. THE ASSESS EE IN ITS CONDONATION PETITION BEFORE THE FIRST APPELLATE AUTHORITY STATED THAT TH ERE WAS A MISTAKE COMMITTED IN FORM 35 FILED BEFORE THE LD.CIT(A) AS THE DATE O F SERVICE OF PENALTY ORDER WAS MENTIONED AS 28.4.2011 INSTEAD OF 28.3.2011. HE SU BMITTED THAT THERE WAS A DELAY OF 37 DAYS IN FILING OF THE APPEAL BEFORE THE LD.COMMISSIONER OF INCOME TAX (APPELAS) AND THIS WAS DUE TO THE REASON THAT T HE ASSESSEE WAS OUT OF THE COUNTRY I.E. U.K. DURING THE PERIOD. IT WAS FURTHE R SUBMITTED THAT THE ASSESSEE HAD SENT DULY SIGNED FORM 35 TO INDIA FROM U.K. AF TER PERUSING THE REASONS RECORDED, WE ARE OF THE CONSIDERED OPINION THAT THI S IS A FIT CASE WHERE THE LD.COMMISSIONER OF INCOME TAX (APPEALS) SHOULD HAVE CONDONED THE DELAY. THUS WE EXERCISE OUR DISCRETION AND CONDONE THE DEL AY OF 37 DAYS IN FILING OF THE APPEAL BEFORE THE LD.CIT(A). 5. ON MERITS THE LD.COMMISSIONER OF INCOME TAX (APP EALS) APPROVED THE ORDER OF THE LD.AO. WE FIND THAT THE LD.AO IN THE ORDER OF PENALTY OBSERVED THAT THE COLUMNS RELATING TO MAINTENANCE OF BOOKS O F ACCOUNTS IN THE RETURN OF INCOME FILED, IS LEFT BLANK. AT PARA 8 HE OBSERVED AS FOLLOWS:- 8. BEYOND DOUBT THE INCOME RETURNED IS ASSESS ABLE UNDER THE HEAD BUSINESS/PROFESSION AND NET INCOME EXCEEDS RS.1,20, 000/-. THE COLUMNS RELATING TO MAINTENANCE OF BOOKS OF ACCOUNTS IN THE RETURN ARE BLANK. IN THE COURSE OF PENALTY PROCEEDINGS, THE ASSESSEE HAS NEI THER ADMITTED THE DETAILS OF THE ACCOUNTS MAINTAINED NOR HAS PRODUCED THE ACCOUN TS. THE RECEIPTS DT. 26.2.2009 ISSUED BY RELIANCE LIFE INSURANCE FOR RS. 25,000/- SHOWS THAT THE ASSESSEE MAINTAINED ACCOUNT WITH BANK OF INDIA. HO WEVER, EVEN COPY OF BANK ACCOUNT HAS NOT BEEN PRODUCED. IF FOR ARGUMENT SAK E THOUGH NOT ADMITTING THE 3 ASSESSEE IS ENGAGED IN THE COMPUTER JOB THE BALANCE SHEET FILED IN THE PENALTY PROCEEDINGS WOULD HAVE INCLUDED THE COMPUTER FURNIT URE ETC. HOWEVER, IT IS NOT SO AS IS APPARENT FROM THE BALANCE SHEET REPRODUCED ABOVE. THIS LEADS TO INFER THAT THE ASSESSEE IS HIDING THE FACTS ALSO. 6. THE SUBMISSIONS OF THE ASSESSEE ARE THAT I) NO N OTICE U/S 139(9) WAS GIVEN TO THE ASSESSEE TO REMOVE THE DEFECTS IN THE RETURN AS ALLEGED IN THE PENALTY ORDER; II) THAT THE RETURN OF INCOME WAS PROCESSED U/S 143 (1) AND NO NOTICE FOR SCRUTINY WAS GIVEN U/S 143(2), III) THE INSPECTOR OF THE WARD WAS SENT BY THE LD .A.O. TO VERIFY THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE AND THAT THE I NSPECTOR FAILED TO SHOW THE AUTHORIZATION LETTER ISSUED BY THE ASSESSING OFFICE R FOR SPOT ENQUIRY; (IV) THAT THE ASSESSEE HAS FILED COPY OF THE CAPITA L ACCOUNT AND BALANCE SHEET; (V) THAT S.44AA DOES NOT DESCRIBE THE TYPES OF ACCO UNTS WHICH HAVE TO BE MAINTAINED BY PERSONS CARRYING OF BUSINESS OR PROFE SSION. 7. RELIANCE WAS PLACED ON THE FOLLOWING DECISIONS. A. ITO VS. PYARELEL GAUR (1993) 47 ITD 33 (NAG.) B. DCIT VS. SMT. JYOTI H.MEHTA (1999) 107 TAXMAN 77 (M UM) (MAG) C. ITO VS. DINESH PAPER MART (1999) 70 ITD 274 (NAG) 7.1. IN THE CASE OF ITO VS. PYARELEL GAUR (1993) 47 ITD 33 (NAG.) IT IS HELD AS UNDER. S.271A, R.W.S. 145 OF THE ACT PENALTY FOR FAIL URE TO MAINTAIN BOOKS OF ACCOUNTS ETC. ASSESSMENT YEAR 1990-91 WHETHE R, IF AN ASSESSEE MAINTAINS SUCH DOCUMENT WHICH ENABLES AN ACCOUNTANT , AND NOT NECESSARILY A C.A., TO PREPARE AN INCOME OR EXPENDI TURE ACCOUNT, THEN SUCH DOCUMENT SHOULD BE CONSIDERED AS BOOKS OF ACCO UNT WHICH MAY ENABLE THE ASSESSING OFFICER TO COMPUTE THE INCOME OF A GIVEN ;ASSESSEE 4 UNDER THE PROVISIONS OF THE ACT HELD, YES WHETH ER PENALTY WILL BE IMPOSABLE U/S 271A IN ALL THE CASES WHERE RESOURCE IS TAKEN TO S.145(1) AND S.145(2) FOR COMPUTING THE INCOME OF AN ;ASSESS EE HELD, NO WHETHER IN A CASE WHERE ASSESSING OFFICER DID NOT I SSUE ANY NOTICE OF DEFECT U/S 139(9), IT WOULD SHOW THAT WHATEVER DOCU MENTS ACCOMPANIED RETURNS WERE SUFFICIENT TO ENABLE HIM T O COMPUTE THE ASSESSEES INCOME HELD, YES. 7.2. IN THE CASE OF DCIT VS. SMT. JYOTI H.MEHTA (19 99) 107 TAXMAN 77 (MUM) (MAG) IT IS HELD AS UNDER: S.271A R.W.S. 44AA, OF THE ACT PENALTY FOR NON M AINTENANCE OF BOOKS OF ACCOUNT ASSESSMENT YEAR 1991-92 WHETHER PROVISIONS OF S.44AA HAVE NEXUS WITH ASSESSMENT PROCEEDINGS AN D, THUS, KEEPING IN VIEW ITS OBJECTIVE AND DISTINCTION BETWE EN CATEGORY OF PERSONS UNDER SUB SECTION (1) AND SUB SECTION(2), E VEN IF THERE WAS A DEFAULT U/S 44AA, PENALTY WAS NOT LEVIABLE ON AS SESSEE WHEN AS ON DATE PENALTY WAS LEVIED, THERE WAS TIME FOR M AINTAINING BOOKS OF ACCOUNTS AND DOCUMENTS HELD, YES WHETH ER EVEN IN ABSENCE OF ANY SPECIFIC ;TIME FRAME WITHIN PROVISIO N OF S.44AA OR RULES MADE THEREUNDER IN SUCH CASES, DEFAULT CAN BE SAID TO HAVE TAKEN PLACE AT ANY TIME BEFORE DUE DATE FOR FILING RETURN U/S 139(1) HELD, YES. 8. APPLYING THE PROPOSITIONS LAID DOWN IN THESE CAS E LAWS TO THE FACTS OF THE CASE WE ALLOW THIS APPEAL OF THE ASSESSEE. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST JULY, 2013. SD/- SD/- (A.D. JAIN) (J.SUDHAK AR REDDY) JUDICIAL MEMBER ACCOUNTANT MEMBE R DATED: THE 31 ST JULY, 2013 *MANGA 5 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT; 2.RESPONDENT; 3.CIT; 4.CIT (A); 5.DR; 6.GUARD FILE BY ORDER ASST. REGISTRAR 1. DATE OF DICTATION: 2. DRAFT PLACED BEFORE THE AUTHOR ON: 3. DRAFT PROPOSED AND PLACED BEFORE SECOND MEMBER ON: 4. DRAFT DISCUSSED/APPROVED BY THE SECOND MEMBER ON: 5. APPROVED DRAFT CAME TO SR.P.S. ON: 6. DATE OF PRONOUNCEMENT : 7. FILE SENT TO BENCH CLERK ON : 8. DATE ON WHICH FILE GIVEN TO HEAD CLERK ON: 9. DATE OF DISPATCHING THE ORDER ON :