Shri Dulabhai Bijalbhai Mer, Bhavnagar V. The Income Tax Officer, Ward-2(3), Bhavnagar

ITA 2862/AHD/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9925 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 15-12-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 28-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RIDDHI SIDDHI
• Keywords: Presumptive income
• Section: 142(1); 147; 148; 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER ./ ITA NO. 2862/AHD/2014 / ASSESSMENT YEAR: 2008-09 DULABHAI BIJALBHAI MER, VILLAGE : KHETA KHATLI, POST : SANESH, TAL: BHAVNAGAR BHAVNAGAR .. APPELLANT PAN : AKTPM 4733 H VS INCOME TAX OFFICER, WARD-2(3), BHAVNAGAR .. RESPONDENT ASSESSEE(S) BY : SHRI RIDDHI SIDDHI , AR REVENUE BY : SHRI DILEEP KUMAR , SR - DR / DATE OF HEARING 15/12/2015 /DATE OF PRONOUNCEMENT 01/01/2016 / O R D E R THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) -XX, AHMEDABAD, DATED 01.09.2014 FOR ASSESSMENT YEAS 200 8-09, CONFIRMING PENALTY OF RS.71,833/- U/S 271(1)(C). 2. IN THIS CASE, THE ASSESSMENT U/S 144 R.W.S. 14 7 HAS BEEN COMPLETED BY DETERMINING THE TOTAL INCOME @ 20% AT RS.4,02,473/- OF THE GROSS RECEIPTS OF RS.20,12,364 /- AS PER (SMC) ITA NO. 2862/AHD/2014 DULABHAI BIJALBHAI MER VS. ITO AYS : 2008-09 2 FORM NO.26AS. IT WAS NOTICED THAT THE ASSESSEE HAS NOT SUBMITTED HIS RETURN OF INCOME U/S.139(1) OF I.T. A CT AND SUBSEQUENTLY, ON THE BASIS OF THE INFORMATION THE C ASE WAS RE- OPENED BY ISSUE OF NOTICE U/S.148 OF THE I.T. ACT. SUBSEQUENTLY, VARIOUS NOTICES U/S. 143(2) AND 142(1) WERE ISSUED. BUT THE ASSESSEE DID NOT FILE THE RETURN OF INCOME EVEN IN RESPONSE TO THE NOTICE ISSUED U/S. 148 OF I.T. ACT. IN SPITE OF VARIOUS OPPORTUNITIES GRANTED, THE ASSESSEE HAS FAILED TO C OMPLY ANY OF THE NOTICES. NEITHER ANY RETURN OF INCOME IN DUE CO URSE OF TIME IN VIEW OF THE PROVISIONS OF SECTION 139(1) OF I.T. ACT OR SUBSEQUENTLY IN RESPONSE TO THE NOTICE ISSUED U/S. 148 HAD BEEN FILED. THEREFORE, THE ASSESSING OFFICER ESTIMA TED THE INCOME @ 20% OF THE GROSS RECEIPTS AND COMPLETED TH E ASSESSMENT U/S.144 R.W.S. 147 OF I.T. ACT. 2.1 AS PER THE SUBMISSION OF THE ASSESSEE, NO APPEA L AGAINST THE AFORESAID ASSESSMENT ORDER HAS BEEN FILED BY TH E ASSESSEE BEFORE THE CIT(A). THUS, THE QUANTUM OF ADDITION BE CAME THE FINAL AND IMPLIEDLY THE INCOME ESTIMATED BY THE ASS ESSING OFFICER WAS ALSO ACCEPTED BY THE ASSESSEE. THE STAN D OF THE ASSESSEE HAS BEEN THAT HE HAD NO OTHER INCOME CHARG EABLE TO TAX AND THE PROFIT ARISING OUT OF THE CONTRACT WAS BELOW THE MAXIMUM AMOUNT NOT LIABLE TO BE TAXED TO INDIVIDUAL ASSESSEE. AS PER THE BONAFIDE INTENTION, THE ASSESSEE DID NOT FILE THE RETURN OF INCOME AS HE DID NOT WANT TO CLAIM THE RE FUND OF THE CORRESPONDING TDS. IT WAS CLAIMED THAT THE ASSESSE E WAS ALMOST AN ILLITERATE PERSON RESIDING IN A SMALL VIL LAGE AND HE (SMC) ITA NO. 2862/AHD/2014 DULABHAI BIJALBHAI MER VS. ITO AYS : 2008-09 3 BELIEVED IN THE ABOVE ADVICE AND PREFERRED NOT TO F ILE THE RETURN OF INCOME. THE ASSESSEE ALSO CLAIMED THAT IN THE AS SESSMENT ORDER THE PENALTY WAS INITIATED WITHOUT ANY SPECIFI C CHARGE. FURTHER IT WAS CLAIMED THAT HIS CONTRACTUAL RECEIPT S WERE MUCH LESS THAN RS.40 LAKHS AND HE WAS VERY MUCH COVERED BY THE PRESUMPTIVE TAXATION SCHEME U/S.44AD OF INCOME-TAX ACT. THUS, THE TOTAL INCOME COULD NOT HAVE BEEN ESTIMATE D AT MORE THAN 8% OF THE GROSS RECEIPTS AS THERE WAS NO CLEAR FINDING OF THE ASSESSING OFFICER THAT THE ASSESSEE WAS HAVING MUCH HIGHER AMOUNT TO THE PRESCRIBED RATE OF 8% OF THE RECEIPTS . IT WAS FURTHER CLAIMED THAT THE BANK OF THE ASSESSEE ALSO ESTABLISHED THAT THE MOST OF THE FUNDS RECEIVED FROM PRINCIPAL WERE ALMOST USED IMMEDIATELY. ACCORDING TO THE LD. AUTHORIZED REPRESENTATIVE, THERE WAS NO BASIS TO ESTIMATE THE INCOME @ 20% OF THE GROSS RECEIPTS. HOWEVER, THE ASSESSEE D EEMED IT PROPER NOT TO APPEAL AGAINST THE QUANTUM PROCEEDING S TO AVOID THE UNNECESSARY COST OF LITIGATION AND TO PURCHASE PEACE OF MIND. 2.2. IN THE PRESENT CASE, I FIND THAT THE ADDITION IN THE ORIGINAL ASSESSMENT WAS MADE BY THE ASSESSING OFFICER BY EST IMATING THE TOTAL INCOME AT 20% OF THE GROSS RECEIPTS ON TH E GROUND THAT THE ASSESSEE FAILED TO COMPLY WITH THE NOTICES ISSU ED TO THE ASSESSEE. KEEPING IN VIEW THE FACTS AND CIRCUMSTANC ES OF THE CASE AS DISCUSSED ABOVE, I AM OF THE OPINION THAT T HE ADDITION ON WHICH PENALTY IN DISPUTE HAS BEEN IMPOSED BY THE ASSESSING OFFICER IS PURELY BASED ON ESTIMATED ADDITION WHICH IS NOT (SMC) ITA NO. 2862/AHD/2014 DULABHAI BIJALBHAI MER VS. ITO AYS : 2008-09 4 SUFFICIENT FOR LEVYING THE PENALTY U/S 271(1)(C) OF THE ACT AS STANDALONE BASIS. ACCORDINGLY, THE PENALTY LEVIED B Y THE ASSESSING OFFICER U/S. 271(1)(C) IS DIRECTED TO BE DELETED. 3. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE COURT ON 1ST JANUARY, 2016 AT AHMEDABAD. SD/- ( SHAILENDRA KUMAR YADAV ) JUDICIAL MEMBER AHMEDABAD; DATED 01/01/2016 BIJU T., PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ! ' ' # / CONCERNED CIT 4. ' ' # ( ) / THE CIT(A) 5. &'( ! , ' ! , / DR, ITAT, AHMEDABAD 6. (- . / GUARD FILE. / BY ORDER, TRUE COPY / ( DY./ASSTT.REGISTRAR) !', / ITAT, AHMEDABAD