Shri Damjibhai Devkaranbhai Vaghani, Jamnagar V. The Income Tax Officer, Ward-2(2), Jamanagar

ITA 284/RJT/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2897 (ITAT-RAJKOT)
• Duration Of Justice: 1 year(s) 7 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 24-07-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUHAS MISTRY
• Assessee Lawyers: MJ RANPURA
• Keywords: Reasonable cause
• Section: 273B; 271B; 44AB

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI WASEEM AHMED , ACCOUNTANT MEMBER AND MS MADHUMITA ROY , JUDICIAL MEMBER ./ I.T. A. NO. 284 /RJT/2018 ( / ASSESSMENT YEAR 2009 - 1 0 ) SHRI DAMJIBHAI D. VAGHANI , MOTI CHAMBER , GRAIN MARKET , JAMNAGAR . / VS. I.T.O. , WARD - 2 ( 2 ) , JAMNAGAR . ./ ./ PAN/GIR NO. : A ATPV6966D ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : SHRI M.J. RANPURA, A.R / RESPONDENT BY : SHRI SUH A S MISTRY , SR . D . R. / DATE OF HEARING 27 /02 /20 20 / DATE OF PRONOUNCEMENT 28 / 0 2 /20 20 / O R D E R PER BENCH : THE CAPTIONED APPEAL HAS BEEN FILED AT THE INSTANCE OF THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMIS SIONER OF INCOME TAX (APPEALS) , JAMNAGAR [ LD. CIT(A) IN SHORT] DATED 16/05 /2018 ARISING IN THE MATTER OF PENALTY ORDER PASSED UNDER S. 271B OF THE INCOME TAX ACT, 1961 (HEREINAFTER R EFERRED TO AS 'THE ACT') DATED 29/06/2017 RELEVANT TO THE ASSESSMENT YEAR S (A . Y . ) 2009 - 1 0 . 2. THE EFFECTIVE ISSUE RAISED BY THE ASSESSEE IS THAT THE LEARNED CIT (A) ERRED IN CONFIRMING THE PENALTY LEVIED BY THE AO UNDER SECTION 271B OF THE ACT FOR NOT GETTING THE ACCOUNTS AUDITED UNDER SECTION 44AB OF THE ACT. ITA NO. 284 /RJT / 20 1 8 A.Y.20 09 - 1 0 - 2 - 3. THE FACTS IN BRIEF ARE THAT THE A SSESSEE IS AN INDIVIDUAL AND CLAIMED TO BE ENGAGED IN THE BUSINESS OF GROUND NUTS AS COMMISSION AGENT. THE ASSESSEE IN THE YEAR UNDER CONSIDERATION HAS ACHIEVED A TURNOVER OF RS. 64,72,100 / - AND THEREFORE HE WAS LIABLE FOR GETTING THE ACCOUNTS AUDITED UNDER SECTION 44 AB OF THE ACT. BUT THE ASSESSEE FAILED TO DO SO. ACCORDINGLY, THE AO INITIATED THE PENALTY PROCEEDINGS UNDE R SECTION 271B OF THE ACT FOR RS. 32,361 / - BEING % OF THE TURNOVER WHICH WAS SUBSEQUENTLY CONFIRMED. 4. AGGRIEVED ASSESSEE PREFERRED A N APPEAL TO THE LEARNED CIT (A) WHO HAS CONFIRMED THE ORDER OF THE AO. BEING AGGRIEVED BY THE ORDER OF THE LEARNED CIT - A, THE ASSESSEE IS IN APPEAL BEFORE US. 6. THE LEARNED AR BEFORE US SUBMITTED THAT THE ASSESSEE IS A COMMISSION AGENT AND THEREFORE T HE AMOUNT OF COMMISSION EARNED BY HIM SHOULD BE CONSTRUED AS TURNOVER OF THE BUSINESS WHICH IS AN AMOUNT OF RS. 3, 46 , 985 / - ONLY . 7. ON THE OTHER HAND THE LEARNED DR VEHEMENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. FROM THE PRECEDING DISCUSSION, WE NOTE THAT THE ASSESSEE HAS BEEN SHOWING COMMISSION INCOME IN HIS BOOKS OF ACCOUNTS AND THIS FACT HAS NOT BEEN DOUBTED BY THE AUTHORITIES BELOW. THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSEE WAS UNDER THE BONA FIDES BELIEVE THAT HIS ACCOUNTS ARE NOT LIABLE TO BE AUDITED UNDER SECTION 44 AB OF THE ACT. ITA NO. 284 /RJT / 20 1 8 A.Y.20 09 - 1 0 - 3 - 8.1 WE ALSO FIND THAT THE PENALTY IS NOT LEVIED AUTOMATICALLY UNDER THE PROVISION OF LAW. THE AUTHORITIES BELOW ARE EMPOWERED TO WAIVE THE PENALTY IF THEY FIND THAT THERE WAS SUFFICIENT AND REASONABLE CAUSE FOR NOT GETTING THE ACCOUNTS AUDITED UNDER THE PROVISIONS OF SECTION 44 AB OF THE ACT AS PER THE PROVISION OF SECTION 273B OF THE ACT. THE RELE VANT S ECTION IS REPRODUCED AS UNDER: - [ PENALTY NOT TO BE IMPOSED IN CERTAIN CASES. 273B . NOTWITHSTANDING ANYTHING CONTAINED IN THE PROVISIONS OF [CLAUSE (B) OF SUB - SECTION (1) OF] [SECTION 271, SECTION 271A, [SECTION 271AA,] SECTION 271B [, SECTION 271BA ], [SECTION 271BB,] SECTION 271C, [SECTION 271CA,] SECTION 271D, SECTION 271E, [SECTION 271F, [SECTION 271FA,] [SECTION 271FB,] [SECTION 271G,]] [SECTION 271H,] CLAUSE (C) OR CLAUSE (D) OF SUB - SECTION (1) OR SUB - SECTION (2) OF SECTION 272A, SUB - SECTION (1) OF SECTION 272AA] OR [SECTION 272B OR] [SUB - SECTION (1) [OR SUB - SECTION (1A)] OF SECTION 272BB OR] [SUB - SECTION (1) OF SECTION 272BBB OR] CLAUSE (B) OF SUB - SECTION (1) OR CLAUSE (B) OR CLAUSE (C) OF SUB - SECTION (2) OF SECTION 273, NO PENALTY SHALL BE IMPO SABLE ON THE PERSON OR THE ASSESSEE, AS THE CASE MAY BE, FOR ANY FAILURE REFERRED TO IN THE SAID PROVISIONS IF HE PROVES THAT THERE WAS REASONABLE CAUSE FOR THE SAID FAILURE.] 8.2 A PLAIN LOOK AT THE ABOVE STATUTORY PROVISION MAKES IT CLEAR THAT THE PENA LTY CAN BE WAIVED OFF IF THE DEFAULT WAS COMMITTED BY ASSESSEE ON ACCOUNT OF UNAVOIDABLE CIRCUMSTANCES. ACCORDINGLY, WE ARE OF THE VIEW THAT THE DEFAULT HAS BEEN COMMITTED BY THE ASSESSEE INADVERTENTLY. THUS WE HOLD THAT, THERE CANNOT BE PENALTY UNDER SECT ION 44 AB OF THE ACT. ACCORDINGLY, WE DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY LEVIED U/S 271B OF THE ACT. HENCE, THIS GROUND OF APPEAL OF THE ASSESSEE IS ALLOWED. 9. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 28 / 02 /20 20 - SD - - SD - ( MADHUMITA ROY ) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER RAJKOT, DATED 28 /02 /20 20 MANISH