M/s. Anuj Securities, Ahmedabad V. The Income Tax Officer, Ward-5(3)(1), Ahmedabad

ITA 2947/AHD/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 9638 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-02-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 17-02-2016
• Assessment Year: 2004-2005
• Appeal Filed On: 21-10-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 43B; 143(3); 153A; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, AHMEDABAD BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER ./ ITA NO. 2947/AHD/2015 / ASSESSMENT YEAR: 2004-05 M/S. ANUJ SECURITIES, 26, ANUJ, SAMASTHA BRAHMAKSHATRIYA, SOCIETY, OPP. SABAR FLATS, NARAYAN NAGAR, AHMEDABAD .. APPELLANT PAN : AAGFA 9362 D VS ITO, WARD-5(3)(1), AHMEDABAD .. RESPONDENT ASSESSEE(S) BY : SHRI VIVEK CHAVDA, AR REVENUE BY : SHRI KAMLESH MAKWANA, SR. DR. / DATE OF HEARING 17/02/2016 /DATE OF PRONOUNCEMENT 18/02/2016 / O R D E R THIS APPEAL, AT THE INSTANCE OF THE ASSESSEE, IS DI RECTED AGAINST THE ORDER OF THE CIT (A), AHMEDABAD-5, DATED 28.09.2015 . THE RELEVANT ASSESSMENT YEAR IS 2004-05. 2. THE SOLITARY GROUND RAISED IN THIS APPEAL IS WHE THER THE CIT(A) IS JUSTIFIED IN CONFIRMING THE LEVY OF PENALTY IMPOSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE ACT. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE AS FOLL OWS:- THE ASSESSEE IS A PARTNERSHIP FIRM. IT DERIVES IN COME FROM SUB- BROKING IN SHARES. THE RETURN OF INCOME FOR THE RE LEVANT ASSESSMENT YEAR WAS FILED ON 21.10.2004 DECLARING TOTAL INCOME AT RS.20,390/-. THE ASSESSMENT WAS FINALIZED U/S 153A R.W.S. 143(3) OF THE ACT VIDE ORDER (SMC) ITA NO. 2947/AHD/2015 ANUJ SECURITIES VS. ITO AY 2004-05 2 DATED 27.12.2007, ASSESSING THE TOTAL INCOME AT RS. 34,790/-. SUBSEQUENTLY, REASSESSMENT NOTICE WAS ISSUED U/S 14 8 OF THE ACT AND ASSESSMENT U/S 143(3) R.W.S. 147 WAS COMPLETED VIDE ORDER DATED 30.12.2011, WHEREIN DISALLOWANCE WAS MADE IN RESPEC T OF BAD DEBT AND SERVICE TAX EXPENSES AMOUNTING TO RS.2,25,567/- AND RS.68,890/- RESPECTIVELY. 4. AGGRIEVED BY THE ADDITION MADE IN THE QUANTUM AS SESSMENT, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY. THE CIT(A) DELETED THE ADDITION WITH REGARD TO THE BAD DEBT AND CONFIRMED THE DISALLOWANCE OF SERVICE TAX EXPENDITU RE OF RS.68,890/-. 5. SUBSEQUENT TO THE CIT(A)S ORDER IN THE QUANTUM ASSESSMENT, THE PENALTY WAS IMPOSED U/S 271(1)(C) OF THE ACT FOR TH E ADDITION SUSTAINED OF SERVICE TAX EXPENSES BY THE CIT(A). O N FURTHER APPEAL AS AGAINST THE PENALTY ORDER, THE CIT(A) DISMISSED THE APPEAL OF THE ASSESSEE AND CONFIRMED THE PENALTY IMPOSED AMOUNTIN G TO RS.30,070 / - . THE ASSESSEE, BEING AGGRIEVED, IS IN APPEAL BEFORE THE TRIBUNAL. 6. THE LD. COUNSEL FOR THE ASSESSEE, RELYING ON THE ORDER OF THE PUNE A BENCH OF THE TRIBUNAL IN THE CASE OF ENVAIR ELE CTRODYNE LTD. VS. DCIT, CONTENDED THAT THE PARTICULARS WITH REGARD TO SERVICE TAX EXPENSES CLAIMED WERE DISCLOSED IN THE PROFIT & LOS S ACCOUNT FOR THE RELEVANT ASSESSMENT YEAR AND THERE IS NO CONCEALMEN T ON THE PART OF THE ASSESSEE WARRANTING THE IMPOSITION OF PENALTY U /S 271(1)(C) OF THE ACT. 7. THE LD. DEPARTMENTAL REPRESENTATIVE PRESENT WAS DULY HEARD. (SMC) ITA NO. 2947/AHD/2015 ANUJ SECURITIES VS. ITO AY 2004-05 3 8. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE MATERIAL ON RECORD. ADMITTEDLY, IN THIS CASE SERVICE TAX EXPEN SES OF RS.68,890/- HAS BEEN CLAIMED AS DEDUCTION AND DEBITED TO THE PR OFIT & LOSS ACCOUNT. THE PUNE BENCH OF THE TRIBUNAL IN THE CAS E OF ENVAIR ELECTRODYNE LTD VS. DCIT IN ITA NO.595/PN/2008 HAD HELD THAT WHEN DISCLOSURE HAS BEEN MADE IN THE RETURN OF INCOME OR ITS ANNEXURES, IT CANNOT BE STATED THAT THERE IS CONCEALMENT OF INCOM E OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE RELEVANT FIN DING OF THE TRIBUNAL READS AS UNDER:- 6. WE HAVE HEARD THE PARTIES AND PERUSED THE DOCUM ENTS AND DECISIONS AVAILABLE BEFORE US. ASSESSEE'S APPEAL FILED BELATE DLY BEFORE THE CIT(A) WAS NOT CONDONED. IT IS ALSO A FACT THAT THE ADDITI ONS MADE ON ACCOUNT OF DISALLOWANCE OF SALES TAX AND SERVICE TAX ETC. U/S 43B AND VALUATION OF INVENTORIES ARE UNCONTESTED BY THE ASSESSEE BEFORE THE TRIBUNAL. DURING THE ASSESSMENT PROCEEDINGS, ASSESSEE DID NOT FILED ANY COGENT EXPLANATION BEFORE THE AO IN RESPECT OF THESE ADDIT IONS EXCEPTING THAT THE 'INADVERTENCE' IS THE EXPLANATION.DURING THE PE NALTY PROCEEDINGS, THE ASSESSEE DID NOT ANY EXPLANATION IN RESPONSE TO THE SHOW CAUSE NOTICE DATED 18.5.2007 OF THE AO EXCEPTING THAT THE PENALTY PROCEEDINGS MUST BE KEPT IN ABEYANCE TILL THE ABOVE SAID BELATED APPEAL BEFORE THE CIT(A) IS DISPOSED OF. IT IS BORNE ON REC ORDS (PAGE 2 OF THE PENALTY ORDER DATED 31.5.2007) THAT THE AO MENTIONED THAT THE 'NO SUBMISSION WHATSOEVER ON MERITS HAS BEEN MADE IN RE SPECT OF THE FOLLOWING ADDITIONS...'. IT IS ALSO MENTIONED IN PA GE 3 OF THE SAID PENALTY ORDER THAT 'AS REGARD PENALTY PROCEEDINGS, THE ASSE SSEE DID NOT FURNISH ANY SUBMISSION FOR THE REASONS BEST KNOWN TO THEM O NLY'. THUS, THE AO PROCEEDED TO LEVY PENALTY IN THE ABSENCE ANY EXP LANATION FROM THE ASSESSEE. DURING THE FIRST APPELLATE PROCEEDINGS RE LATING TO THE PENALTY, ASSESSEE DEFENSE RELATES TO THE DISCLOSURE OF PARTI CULARS IN THE RETURN. BEFORE US, LD COUNSEL ESSENTIALLY RELIED ON THE SUB MISSIONS MADE BEFORE THE REVENUE AUTHORITIES. THUS, WE HAVE TO DECIDE TH E ISSUES BASED ON THE ASSESSEE'S DEFENSE ARGUMENTS RELATING TO THE DISCLO SURE OF INFORMATION IN THE RETURN OF INCOME AND IF THE PARTICULARS DISC LOSED IN THE RETURN ADVOCATES FOR NON CONCEALMENT OF INCOME. IN OUR OPI NION, WHERE THERE IS (SMC) ITA NO. 2947/AHD/2015 ANUJ SECURITIES VS. ITO AY 2004-05 4 DISCLOSURE OF RELEVANT INFORMATION IN THE RETURN, T HE CONCEALMENT OF INCOME CANNOT BE ATTRIBUTED TO THE ASSESSEE. CONSID ERING THE ABOVE, WE HAVE EXAMINED THE ASSESSEE'S CASE WHERE RELEVANT IN FORMATION IS FURNISHED IN THE RETURN OR ITS ANNEXURE BUT FAILED TO ADD BACK TO THE INCOME RETURNED AND WHETHER THE PENALTY IS ATTRACTE D IN SUCH CASE. IN OUR CONSIDERED OPINION, WHEN THE PARTICULARS ARE AV AILABLE IN THE RETURNS AND ITS ENCLOSURES SAY AUDIT REPORT FILED U /S 44AB OF THE ACT AND FAILURE TO MAKE ADDITIONS ON ACCOUNT OF 43B OF THE ACT AND THE INCLUSION OF EXCISE DUTY, FREIGHT ETC DO NOT ATTRAC T PENALTY U/S 271(1)(C) OF THE ACT IN VIEW OF PUNE BENCH DECISION IN THE CA SE OF KANBAY SOFTWARE P LTD (SUPRA). ACCORDINGLY, THE GROUNDS RAI SED IN THE APPEAL ARE ALLOWED. 9. IN THE INSTANT CASE, SINCE THE RELEVANT INFOR MATION IS FURNISHED ALONGWITH THE RETURN FILED AND BASED ON THAT RETURN THE DISALLOWANCE IS MADE, IT CANNOT BE STATED THAT THERE IS A CONCEALME NT OF INCOME WARRANTING IMPOSITION OF PENALTY U/S 271(1)(C) OF T HE ACT. ACCORDINGLY, THE PENALTY IS CANCELLED. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 18TH FEBRUARY, 201 6 AT AHMEDABAD. S D/- ( GEORGE GEORGE K. ) JUDICIAL MEMBER AHMEDABAD; DATED 18/02/2016 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