Mukesh Pathak, Jaipur V. ITO Ward 6(2), Jaipur

ITA 295/JPR/2023

AI Insights

The case involves Mukesh Pathak, the appellant, who appealed against the penalty imposed by the Income Tax Officer, Ward 6(2), Jaipur, confirmed by the CIT(A) at the National Faceless Appeal Centre, Delhi. The penalty was imposed for not maintaining books of account and not getting them audited, as required under section 271B of the Income Tax Act, for the assessment year 2011-12. The appellant argued that he was not required to maintain books of account, and thus, the audit of books did not arise. The tribunal noted discrepancies in the CIT(A)'s findings regarding the filing of Form 10DB, which led to the conclusion that the penalty was unjustified and should be set aside.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 132111 (ITAT-JAIPUR)
• Duration Of Justice: 2 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-07-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 05-07-2023
• Assessment Year: 2011-2012
• Appeal Filed On: 08-05-2023
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 144; 139(1); 271B

Judgement Text

vk;dj vihyh; vf/kdj.k] t;iqj U;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, ‘’SMC” JAIPUR Jh laanhi xkslkbZ] U;kf;d lnL; ds le{k BEFORE: Hon’ble SHRI SANDEEP GOSAIN, JUDICIAL MEMBER vk;dj vihy la-@ITA No. 295/JP/2023 fu/kZkj.k o"kZ@Assessment Year : 2011-12 Shri Mukesh Pathak 90, Vasundhara Colony, Tonk Road Jaipur – 302 018 cuke Vs. The ITO Ward 6(2) Jaipur LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AKLPP 7944 F vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri S.L. Jain, Advocate jktLo dh vksj ls@ Revenue by: Shri Anoop Singh, Addl. CIT lquokbZ dh rkjh[k@ Date of Hearing : 06/07/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 17/07/2023 vkns'k@ ORDER PER: SANDEEP GOSAIN, JM This appeal filed by the assessee is directed against order of the ld. CIT(A) dated 15-03-2023, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2011-12 raising therein following grounds of appeal. ‘’1. That the NFAC has further erred in law and facts in confirming penalty u/s 271B amounting to Rs.47,800/- whereas the assessee was not required to maintain books of account and therefore audit of books of accounts does not arise. The assessee has not committed any default and if any default has been committed it is purely of technical nature. Penalty may be deleted. 2 ITA NO. 295/JP/2023 MUKESH PATHAK VS ITO, WARD 6(2), JAIPUR 2. That the NFAC has further erred in law and facts in confirming the penalty u/s 271B. Penalty is imposable on the basis of sales, turnover gross receipt whereas the assessee has done intraday transaction of shares on STT has been paid.’’ 2.1 Apropos Ground Nos. 1 and 2 of the assessee, the facts as emerges from the order of the ld. CIT(A) are as under:- ‘’5. Decision: 5.1 The statement of facts, grounds of appeal and the submission made by the appellant have been perused carefully. At the outset, it is clear that the income of the appellant is below taxable limit. Further, the income of the appellant has also been assessed u/s 144 of the Act at Rs.1,63,020/- which is also below the taxable limit. The assessing Officer has mentioned the same in the assessment order and the extract is as under: ‘’2 The assessee has shown income from other sources. During assessment proceedings Shri Devendra Upadhyaya CA and AR of the assessee filed reply to the notices issued and furnished details/evidences in respect of income shown by the assessee in return of income filed on 12.3.2018. On perusal of the details and Form No. 10DB filed by the assessee/AR, it is found that the assessee sold equity share in a company of a unit of an equity oriented fund of Rs. 84,96,825, but the assessee has not maintained books of account and he has not get his accounts audited. Therefore, vide order sheet entry dated 28.9.2018 the assessee is required to show cause as to why penalty proceedings u/s 271A and 271B may not be initiated in his case. The assessee did not file any reply to the show cause notice issued to him; therefore, it is assumed that the assessee has no objection in initiating penalty proceedings u/s 271A and 2718. Therefore penalty proceedings u/s 271A and 2718 are initiated in this case. After considering the facts of the case and reply 3 ITA NO. 295/JP/2023 MUKESH PATHAK VS ITO, WARD 6(2), JAIPUR filed the assessee/AR return income of Rs. 1,63,020/- is accepted as total income of the assessee for the year under consideration. The assessee did not filed his return of income u/s 139(1) though his income is taxable, therefore, penalty proceedings u/s 271F are also initiated in this case. The assessee has not filed Form 10DB before the undersigned so that the exact turnover as submitted by the appellant may be decided. The appellant has been repeatedly submitting the same response. The undersigned has to rely on the assessment order passed by the assessing officer. Therefore, it is concluded that the Assessing Officer is justified in its assessing the turnover of Rs. 84,96,825/- and levying the penalty of Rs. 47,800/- u/s 2718 of the Act. Keeping in view of the overall fact of the case, the penalty levied u/s 2718 is confirmed and the appellant's appeal is dismissed. 5.2. In the result, the appeal is dismissed.’’ 2.2 During the course of hearing, the ld. AR of the assessee reiterated the same arguments as made before the lower authorities and thus prayed to delete the penalty. 2.3 On the other hand, the ld. DR supported the orders of the lower authorities. 2.4 The Bench has heard both the parties and perused the materials available on record. From the records,it is noticed that the assessee was not required to maintain the books of accounts and therefore, the question of audit of books of account does not arise. It was further submitted by the ld. AR that penalty in this case for not getting books of account audited is unfounded. It is an admitted fact that the ld. 4 ITA NO. 295/JP/2023 MUKESH PATHAK VS ITO, WARD 6(2), JAIPUR CIT(A) has mentioned in his order that the income of the assessee is below taxable limit. However, it was also mentioned that the assesee has not filed Form 10DB before him so that exact turnover as submitted by the assessee may be decided. Whereas on the contrary, it was specifically mentioned by the AO in his penalty order that he has perused Form 10DB as it was filed before him which amply makes it clear that the findings recorded by the ld. CIT(A) are contrary to the factual position. Thus, these findings recorded by the ld. CIT(A) are not sustainable which deserves to be set aside and consequently stands quashed. 3.0 In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 17/07/2023. Sd/- ¼lanhi xkslkbZ½ (Sandeep Gosain) U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 17 /07/2023 *Mishra vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Shri Mukesh Pathak, Jaipur 2. izR;FkhZ@ The Respondent- ITO, Ward 6(2), Jaipur 3. vk;dj vk;qDr@ The ld CIT 4. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 6. xkMZ QkbZy@ Guard File (ITA No. 295/JP/2023) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asstt. Registrar