M/s. Jainson Traders, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-1(4), RAJKOT-GUJARAT

ITA 301/RJT/2013

• Counselvise Citation: 30124914 RSA 2013
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-11-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 25-06-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR J B JHAVERI
• Assessee Lawyers: KALPESH DOSHI
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBULAL, SMC BENCH, RAJKOT BEFORE SHRI T. K. SHARMA, JM ITA NO. 301/RJT/2013 ASSESSMENT YEAR : 2007-08 M/S. JAINSON TRADERS 5-RAJPUT PARA, RAJKOT PAN : AABFJ 5944 M ( / APPELLANT) ITO, WARD-1(4) RAJKOT / RESPONDENT / ASSESSEE BY SHRI KALPESH DOSHI, CA / REVENUE BY DR J. B. JHAVERI, DR / DATE OF HEARING 11.11.2013 !'# / DATE OF PRONOUNCEMENT 13.11.2013 / ORDER THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DA TED 21.03.2013 OF CIT(A)-I, RAJKOT FOR THE ASSESSMENT YEAR 2007-08 CO NFIRMING THE PENALTY OF RS.22,000/- LEVIED BY THE ASSESSING OFFICER U/S 271 (1)(C) OF THE INCOME-TAX ACT, 1961. 2. THE FACTS, IN BRIEF, ARE THAT THE ASSESSEE IS A FIRM, ENGAGED IN WHOLESALE AND RETAIL DEALERSHIP OF SANITARY-WARES AND CERAMIC TIL ES. FOR THE ASSESSMENT YEAR UNDER APPEAL, IT FILED ITS RETURN OF INCOME ON 31.10.2007 DECLARING NIL INCOME. THE ASSESSING OFFICER FRAMED THE ASSESSMENT U/S 143(3) ON 03.11.2009. IN THIS ASSESSMENT ORDER, HE MADE ADDITION OF RS.73,334/- A ND ALSO INITIATED PENALTY PROCEEDINGS U/S 271(1)(C). THE RELEVANT DISCUSSION IN THIS REGARD IS CONTAINED IN PARAGRAPH 4 OF THE ASSESSMENT ORDER WHICH READS AS UNDER:- 4. DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND ON VERIFICATION OF DETAILS FILED BY THE ASSESSEE, IT IS SEEN THAT JOHN SON (INDIA) PVT. LTD. HAS SHOWN CLOSING BALANCE OF RS.3,26,063/- WHEREAS THE BALANCE AS PER THE BOOKS OF THE ASSESSEE IS SHOWN AT RS.4,48,397/-. THUS, TH ERE IS A DIFFERENCE OF RS.1,12,334/-. THE ASSESSEE WAS THEREFORE VIDE ORDE R SHEET ENTRY DTD. 26.10.2009 REQUESTED TO EXPLAIN THE DIFFERENCE IN T HE CLOSING BALANCE. THE ASSESSEE VIDE SUBMISSION DTD. 29.10.2009 CLARIFIED THAT IN THE BOOKS OF H.R. JOHNSON (INDIA) LTD. CREDIT ENTRY DTD. 29.04.2003 V IDE HDFC BANK CHEQUE OF RS.39,000/- IS SHOWN. ON VERIFICATION OF ASSESSEES BOOKS, THERE WAS NO PAYMENT MADE BY THE ASSESSEE. IT MAY BE MADE BY ANY DEBTORS OF THE ASSESSEE HENCE BALANCE OF DEBTORS WILL BE REDUCED T O THE EXTENT OF RS.39,000/-. THE REMAINING BALANCE OF RS.73,334/- ( 1,12,334 39,000) WAS CREDITED BY H.R. JOHNSON (INDIA) LTD THROUGH SOME C REDIT NOTES PASSED TO THE ASSESSEE WHICH ARE NOT DEBITED BY THE ASSESSEE. THE REFORE, THE SAID AMOUNT IS TREATED AS INCOME OF THE ASSESSEE AND ADDED TO T HE TOTAL INCOME. THE 2 301-RJT-2013 - JAINSON TRADERS (SMC) ASSESSEE HAS ALSO AGREED FOR SUCH ADDITION VIDE SUB MISSION DTD. 29.10.2009. PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT ARE IN ITIATED FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 3. THE ASSESSEE ACCEPTED THE AFORESAID ADDITION OF RS.73,334/- WHICH WAS MADE IN ASSESSMENT PASSED U/S 143(3) OF THE INCOME-TAX A CT. SUBSEQUENTLY, THE ASSESSING OFFICER ISSUED A SHOW-CAUSE NOTICE DATED 29.03.2010 ASKING THE ASSESSEE TO SHOW- CAUSE WHY THE PENALTY U/S 271(1)(C) HAS NOT BEEN LE VIED IN RESPECT OF ADDITION OF RS.73,334/- MADE IN ASSESSMENT ORDER U/S 143(3) OF THE ACT. TO THIS SHOW-CAUSE NOTICE, THE ASSESSEE CONTENDED THAT THE CREDIT NOTE S PERTAINED TO EARLIER PERIOD AS UNDER; THEREFORE THE PENALTY U/S 271(1)(C) IS NOT L EVIABLE. 4. THE ASSESSING OFFICER REJECTED THE REPLY OF THE ASSESSEE AND LEVIED THE PENALTY OF RS.22,000/- U/S 271(1)(C) BEING 100% OF THE AMOUNT OF TAX SOUGHT TO BE EVADED ON ADDITION OF RS.73,334/-. ON APPEAL, IN TH E IMPUGNED ORDER, THE LD CIT(A) CONFIRMED THE PENALTY. AGGRIEVED WITH THE ORDER OF LD CIT(A), THE ASSESSEE IS NOW IN APPEAL BEFORE THIS TRIBUNAL. 5. BEFORE THE TRIBUNAL, ON BEHALF OF THE ASSESSEE, SHRI KALPESH DOSHI, CA, APPEARED AND POINTED OUT THAT THE AFORESAID CREDIT NOTES OF RS.74,151/- DIRECTLY CREDITED TO THE ASSESSEES ACCOUNT AND THE SAME WER E NOT COMMUNICATED TO THE ASSESSEE. IT REMAINED TO BE DEBITED IN THE ACCOUNTS OF M/S. H & R JOHNSON (INDIA) PVT LTD. THIS INCOME PERTAINS TO EARLIER YEARS. THE ASSESSEE HAS NOT OBJECTED THE ADDITION OF RS.74,151/- AS THIS HAS ESCAPED THE ASS ESSMENT IN EARLIER YEARS AND THERE WAS NO INTENTION NOT TO PAY THE TAX ON AFORESAID CR EDIT NOTES OF RS.74,151/-. HE SUBMITTED THAT SINCE THE INCOME OF RS.74,151/- IS N OT TAXABLE IN THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR, THEREFORE THE PENA LTY OF RS.22,000/- U/S 271(1)(C) IS ALSO NOT LEVIABLE. S. NO. DATE AMOUNT PARTICULARS OF ACCOUNTS 1 21.01.2001 RS.61,590/- AJANTA INDIA COMPLAIN 9240312153 2 05.05.2003 RS.5,760/- SCHEME FOR PORCOLINO CION-288 3 11.05.2003 RS.2,041/- SARASWATI EDUCATION TRUST COMMISSION 4 03.06.2003 RS.4,760/- SCHEME FOR PORCOLINO 238-20 MAY TOTAL RS.74,151/ - 3 301-RJT-2013 - JAINSON TRADERS (SMC) 6. ON THE OTHER HAND, DR. J. B. JHAVERI, DR, APPEAR ED ON BEHALF OF THE REVENUE, VEHEMENTLY SUPPORTED THE ORDER OF LD CIT(A). HE POI NTED OUT THAT SINCE THE ASSESSEE HAS NOT OBJECTED THE ADDITION OF RS.74,151/- AT THE TIME OF ASSESSMENT, NOW HE CANNOT DISPUTE THE LEVY OF PENALTY U/S 271(1)(C) I N RESPECT OF THIS ADDITION, BECAUSE HE HAS CONCEALED THE PARTICULARS OF INCOME WITHIN T HE MEANING OF SECTION U/S 271(1)(C) OF THE INCOME-TAX ACT, 1961. 7. HAVING HEARD BOTH SIDES, I HAVE CAREFULLY GONE T HROUGH THE ORDERS OF THE AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT IN THE EARLIER ASSESSMENT YEARS THE INCOME OF RS.73,334/- HAS ESCAPED ASSESSMENT IN RES PECT OF FOLLOWING CREDIT NOTES:- THIS MISTAKE HAS OCCURRED IN EARLIER YEARS AS AFORE SAID AMOUNTS WERE DIRECTLY CREDITED TO THE ASSESSEES ACCOUNTS WITHOUT COMMUNI CATING THE SAME TO THE ASSESSEE. BE THAT IT MAY BE, THIS INCOME PERTAINS T O EARLIER ASSESSMENT YEARS AND NOT OF THE ASSESSMENT YEAR UNDER APPEAL. THEREFORE, THOUGH THE ASSESSEE HAS NOT OBJECTED FOR TAXING OF THE SAME IN THE ASSESSMENT Y EAR UNDER APPEAL, BUT ON THIS ADDITION, I AM OF THE VIEW THAT PENALTY U/S 271(1)( C) IS NOT LEVIABLE. I, THEREFORE, CANCEL THE PENALTY OF RS.22,000/- LEVIED U/S 271(1) (C) OF THE INCOME-TAX ACT, 1961. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. THIS ORDER PRONOUNCED IN OPEN COURT ON THE DATE MEN TIONED HEREINABOVE. SD/- ( $.. &' / T. K. SHARMA) ( ) /JUDICIAL MEMBER *)& +) ,/ ORDER DATE: 13.11.2013 !$ /RAJKOT *BT S. NO. DATE AMOUNT PARTICULARS OF ACCOUNTS 1 21.01.2001 RS.61,590/- AJANTA INDIA COMPLAIN 9240312153 2 05.05.2003 RS.5,760/- SCHEME FOR PORCOLINO CION-288 3 11.05.2003 RS.2,041/- SARASWATI EDUCATION TRUST COMMISSION 4 03.06.2003 RS.4,760/- SCHEME FOR PORCOLINO 238-20 MAY 4 301-RJT-2013 - JAINSON TRADERS (SMC) / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT- M/S. JAINSON TRADERS, 5-RAJPUT PARA, RAJKOT 2. / RESPONDENT- ITO, WARD-1(4), RAJKOT 3. ,0,1 * * 2 / CONCERNED CIT, RAJKOT-1, RAJKOT 4. * * 2- / CIT (A)-I, RAJKOT 5 . 567 1, * 1#, !$ / DR, ITAT, RAJKOT 6 . 79 :; / GUARD FILE *)& / BY ORDER TRUE COPY PRIVATE SECRETARY, ITAT, RAJKOT