Sri Saibaba Guest House, Pondicherry V. ITO Ward 3 , Pondicherry

ITA 2784/CHNY/2018

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 8201 (ITAT-CHENNAI)
• Duration Of Justice: 2 year(s) 10 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 27-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R ANITA
• Assessee Lawyers: T VASUDEVAN
• Section: 271(1)(c)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: CHENNAI , , BEFORE SHRI V. DURGA RAO, JUDICIAL MEMBER AND SHRI G. MANJUNATHA , ACCOUNTAN T MEMBER ./ I . T . A NO. 2784/CHNY/2018 ASSESSMENT YEAR: 20 10 - 2011 SRI SAIBABA GUEST HOUSE, NO.244, J.N. STREET, PONDICHERRY 605 001 . [PAN: A AAFS 1577N ] VS. THE INCOME TAX OFFICER, WARD 3, PONDICHERRY ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. T. VAS U DEVAN, ADVOCATE /RESPONDENT BY : M S . R. ANITA , J CIT / DATE OF HEARING : 2 9 .07 .2021 / DATE OF PRONOUNCEMENT : 04. 08. 2021 / O R D E R PER V. DURGA RAO, JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE O RDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) , PUDUCHERRY IN I.T.A. NO.11 6 /CIT(A) - PDY /20 17 - 18 DATED 31.07. .201 8 , RELE VANT TO THE ASSESSMENT YEAR 20 10 2011. 2. FACTS ARE IN BRIEF THAT THE RE WAS A SURVEY CONDUCTED IN THE BUSINESS PREMISES OF M/S. SRI SAIBABA GUEST HOUSE ON 16 TH I . T . A NO . 2784 /CHNY/201 8 : - 2 - : SEPTEMBER, 2009. THE ASSESSEE FILED HIS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010 2011 ON 29.07.2010 ADMITTING A TOTAL INCOME OF RS.2,53,090/ - . SUBSEQUENTLY, THE CASE OF THE ASSESSEE WAS SELECTED FOR SCRUTINY AND THE ASSESSMENT WAS COMPLETED U/S.143(3) OF THE INCOME TAX ACT, 1961 AND PASSED THE ASSESSMENT ORDER ON 28.02.2013 BY DETERMINING A TAXABLE INCOME OF RS.14,05,485 / - . SUBSEQUENTLY, THE ASSESSING OFFICER HAD INITIATED A PENALTY PROCEEDINGS U/S.271(1)(C) OF THE INCOME TAX A CT, 1961. 3. BEFORE THE ASSESSING OFFICER AND DURING THE COURSE OF THE PENALTY PROCEEDINGS, THE ASSESSEE HAD SUBMITTED THAT I HAVE NEITHER CONCEA LED ANY INCOME NOR FILED ANY INACCURATE PARTICULARS. THEREFORE, SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 HAS NO APPLICATION . 4. THE ASSESSING OFFICER DURING THE COURSE OF THE PENALTY PROCEEDINGS HAD NOTED THAT THE TOTAL RECEIPT DURING THE PERIOD ST ARTING FROM APRIL 2009 TO AUGUST 2009, AS PER THE I MPOUNDED REGISTER NO.3 WAS RS.14,98,680/ - AND THE MONTHLY AVERAGE RECEIPTS FOR THIS PERIOD WAS R S.2,99,736/ - . TAKING INTO ACCOUNT THE MONTHLY AVERAGE RECEIPTS, I.E.RS.2,99,736/ - , TOTAL LODGING RECEIPTS FO R THE FINANCIAL YEAR 2009 2010 ADOPTED AT RS.35,96,832/ - , WHEREAS ADMITTED RECEIPTS BY THE ASSESSEE IS ONLY RS.27,51,380/ - . THEREFORE, THE DIFFERENCE IN LODGING I . T . A NO . 2784 /CHNY/201 8 : - 3 - : RECEIPTS OF RS.8,45,452 (RS.35,96,831/ - MINUS RS.27,51,380/ - ) WAS TREATED AS SUPPRESSION IN LODGING RECEIPTS AND THE SAME WAS TREATED AS CONCEALMENT OF INCOME AND HENCE PENALTY WAS LEVIED U/S.271(1)(C) OF THE INCOME TAX ACT, 1961. 5. ON APPEAL, THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMED THE PENALTY ORDER PASSED BY THE ASSESSING OFFICER. 6. THE LEARNED COUNSEL FOR THE ASSESSEE HAD SUBMITTED THAT THE ASSESSING OFFICER BY TAKING INTO CONSIDERATION ONLY FIVE MONTHS RECEIPTS ESTIMATED FOR THE REMAINING BALANCE SEVEN MONTHS AND SUBMITTED THAT PENALTY U/S.271(1)(C) OF THE ACT CANNOT BE LEVIED ON AN ESTIMATED BASIS. 7. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE ORDER PASSED BY THE AUTHORITIES BELOW. 8. WE HAVE HEARD BOTH THE SIDES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF TH E AUTHORITIES BELOW . 9. IN THIS CASE, THE ASSESSING OFFICER HAS LEVIED THE PENALTY BY TAKING INTO CONSIDERATION ONLY FIVE MONTHS OF THE LODGING RECEIPTS AND ESTIMATING FOR THE REMAINING SEVEN MONTHS AND THE ADDITION IS MADE. I . T . A NO . 2784 /CHNY/201 8 : - 4 - : 10. IN OUR OPINION, PENALTY U /S.271(1)(C) OF THE INCOME TAX ACT, 1961 CANNOT BE LEVIED ON THE BASIS OF ESTIMATION. THE ASSESSING OFFICER HA S FAILED TO PROVE THAT THE ASSESSEE HAD EITHER CONCEALED THE INCOME OR FILED INACCURATE PARTICULARS. THEREFORE, SECTION 271(1)(C) OF THE ACT H AS NO APPLICATION IN THIS CASE. ACCORDINGLY, WE REVERSE THE ORDER PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) AND WE CANCEL THE PENALTY LEVIED BY THE ASSESSING OFFICER. 1 1 . IN THE RESULT, THE APPEA L FILED BY THE ASSESSEE IN I.T.A . NO. 2784 / CHNY/201 8 IS ALLOWED. ORDER PRONOUNCED ON 4 TH AUGUST , 2021 IN CHENNAI. SD/ - ( ) ( G. MANJUNATHA) /ACCOUNTANT MEMBER SD/ - ( ) ( V. DURGA RAO ) /JUDICIAL MEMBER / CHENNAI, / DATED: 4 TH AUGUST , 2021 IA , SR. PS / COPY TO: 1. / APPELLANT 2. / RESPONDENT 3. ( ) / CIT(A) 4. / CIT 5. / DR 6. / GF