Shri Jitendrakumar L. Jain, Ahmedabad V. The Income Tax Officer, Ward-3(1), Baroda

ITA 30/AHD/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 1150 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 7 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2006-2007
• Appeal Filed On: 06-01-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L SHARMA
• Assessee Lawyers: ANIL R SHAH

Judgement Text

ITA NO .3 0 /AHD/ 20 1 4 ASSESSMENT YEAR: 2 0 0 6 - 07 PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD D BENCH , AHMEDABAD [CORAM: PRAMOD KUMAR AM AND KUL BHARAT JM ] ITA NO. 3 0 / AHD / 2 0 1 4 ASSESSMENT YEAR: 200 6 - 07 JITENDRAKUMAR L. JAIN, ....... .. . ..... APPELLANT F - 44, JAYBAJRANG SOCIETY, OPP. SITA RAM COMPLEX, SUBHANPURA, BARODA . [PAN A BLPJ 7404 R ] VS. INCOME TAX OFFICER , .... ........ .... .. .. .. .... .. RESPONDENT WARD 3 ( 1 ), BARODA . APPEARANCES BY: ANIL R. SHAH FOR THE APPELLANT B.L. SHARMA FOR THE RESPONDENT DATE OF CONCLUDING THE HEARING : AUG UST 31 ST , 201 5 DATE OF PRONOUNCING THE ORDER : AUGUST 31 ST , 2015 O R D E R PER PRAMOD KUMAR AM : 1. BY WAY OF THIS APPEAL, THE ASSESSEE APPELLANT HAS CHALLENGED THE CORRECTNESS OF THE ORDER DATED 5 TH JUNE, 2013 , PASSED BY THE LD. CIT(A) IN THE MATT ER OF PENALTY UNDER SECTION 271(1)(C) O F THE INCOME TAX ACT, 1961 ( THE ACT HEREINAFTER) FOR THE ASSESSMENT YEAR 200 6 - 07 . 2. GRIEVANCE OF THE ASSESSEE IS THAT LEARNED CIT ( A ) ERRED IN CONFIRMING THE PENALTY OF RS.38,312/ - UNDER SECTION 271(1)(C) OF THE AC T. ITA NO .3 0 /AHD/ 20 1 4 ASSESSMENT YEAR: 2 0 0 6 - 07 PAGE 2 OF 3 3. TO ADJUDICATE ON THIS APPEAL, ONLY A FEW MATERIAL FACTS NEED TO BE T AKEN NOTE OF. DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER DISALLOWED RS.1,86,423/ - IN RESPECT OF INCENTIVES A ND COMMISSION GIVEN BY THE ASSESSEE , IN THE COURSE OF HIS BUSINESS AS INSURANCE AGENT. HOWEVER , THE ASSESSING OFFICER DISALLOWED THE SAME, INTER ALIA, ON THE GROUND THAT UNDER IRDA REGULATION, NO INSURANCE AGENT SHALL OFFER DIFFERENT R A TES, ADVANTAGES, AND T ERMS AND CONDITIONS OTHER THAN THOSE OFF ERED BY THE INSURERS . THE VOUCHERS WERE ALSO NOT PRODUCED BY THE ASSESSEE. THE MATTER DID NOT REST THERE. THE ASSESSING OFFICER ALSO IMPOSED PENALTY UNDER SECTION 271(1)(C) OF THE ACT ON THE GROUND THAT THE ASSESSEE HAS NO PROOF TO JUSTIFY THE CLAIM . AGGRIEVED , ASSESSEE CARRIED THE MATTER IN APPAL BEFORE THE LD . CIT(A) BUT WITHOUT ANY SUCCESS. THE ASSESSEE IS NOT SATISFIED AND IS IN FURTHER APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS, PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FA CTS OF THE CASE IN THE LIGHT OF THE APPLICABLE LEGAL POSITION. 5. WE FIND THAT EVEN THOUGH THE DISALLOWANCE OF COMMISSION AND INCENTIVES GIVEN BY THE ASSESSEE HAS ATTAINED FINALITY, SUCH A CONFIRMATION BY ITSELF, CANNOT BE REASON ENOUGH TO IMPOSE OR SUSTA IN THE PENALTY UNDER SECTION 271(1)(C) OF THE ACT . HOWEVER , THAT IS PRECISELY WHAT HAS BEEN DONE IN THIS CASE. THE HARSH REALITY IS THAT, WHETHER PERMISSIBLE UNDER THE RULES OR NOT, SUCH INCENTIVES , IN DIFFERENT NOMENCLATURES, ARE PART OF THIS LINE OF BU SINESS. WE HAVE ALSO NOTED THAT, ON SOMEWHAT SIMILAR FACTS AND EVEN AFTER UPHOLDING THE RELATED COMMISSION, A CO - ORDINA TE BENCH HAS, IN THE CASE OF SA URABH BANSAL VS . ITO (41 SOT 157), DELETED THE CONCEALMENT PENALTY UNDER SECTION 271(1)(C) OF THE ACT. WE ARE INCLINED TO ACCEPT THI S LINE OF REASONING. LOOKING TO THE SMALLNESS OF AMOUNT INVOLVED , AND THE NATURE OF ACTIVITY PURSUED BY THE ASSESSEE, WE NEED NOT REALLY GO INTO DETAIL ABOUT THE BROAD LEGAL PRINCIPLE. SUFFI CE TO S AY, ON T HE FACTS OF THIS CAS E, ITA NO .3 0 /AHD/ 20 1 4 ASSESSMENT YEAR: 2 0 0 6 - 07 PAGE 3 OF 3 WE ARE SATISFIED WITH THE EXPLANATION OF THE ASSESSEE AND NORMAL PRACTICE IN THIS LINE OF BUSINESS, WE DEEM IT FIT AND PROPER TO DELETE THE IMPUGNED PENALTY. 6. FOR THE REASONS SET OUT ABOVE, WE SET A SID E THE ORD ERS OF THE AUTHORITIES BELOW AND DEL E TE TH E IMPUGNED PENALTY OF RS.38,312/ - . 7. IN THE RESULT, THE APPEAL IS ALLOWED. P RONOUNCED IN THE OPEN COURT TODAY ON 31 ST DAY OF AUGUST, 2015. SD/ - SD/ - KUL BHARAT PRAMOD KUMAR (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) AHMEDABAD , THE 31ST DAY OF AUGUST, 201 5 PBN/* COPIES TO: (1) THE APPELLANT (2) THE RESPONDENT (3) COMMISSIONER (4) CIT(A) (5) DEPARTMENTAL REPRESENTATIVE (6) GUARD FILE BY ORDER ASSIS TANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCHES, AHMEDABAD