UNICORN TEXTILES P.LTD, MUMBAI V. ITO WD 4(3)(3), MUMBAI

ITA 3038/MUM/2012

• Counselvise Citation: 303819914 RSA 2012
• Duration Of Justice: 1 year(s) 7 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-12-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 02-12-2013
• Assessment Year: 2007-2008
• Appeal Filed On: 03-05-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAVI PRAKASH
• Assessee Lawyers: RAKESH JOSHI
• Section: 145; 144; 133A

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI . , , , BEFORE SHRI D. KARUNAKARA RAO , ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUD ICIAL MEMBER . / ITA NO. 3038/MUM./2012 ( / ASSESSMENT YEAR : 2007 08 ) M/S. UNI CORN TEXTILES PVT. LTD. 51, AGARWAL SADAN DADI SHETH AGAIRY LANE KALBADEVI, MUMBAI 400 002 .. / APPELLANT V/S INC OME TAX OFFICER WARD 4(3)(3), MUMBAI .... / RESPONDENT . / PERMANENT ACCOUNT NUMBER AAACU4180G / ASSESSEE BY : MR. RAKESH JOSHI / REVENUE BY : MR. RAVI PRAKASH / DATE OF HEARING 02.12.2013 / DATE OF ORDER 06.12.2013 / ORDER , / PER AMIT SHUKLA , J.M. THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESSEE, CHALLENGING THE IMPUGNED OR DER 2 ND MARCH 2013, PASSED BY THE LEARNED COMMISSIONER (APPEALS) VIII, MUMBAI, FOR THE ASSESSMENT YEAR 2007 08, VIDE WHICH, THE SOLE GROUND RAISED BY THE ASSESSEE IS , WHETHER OR NOT THE LEARNED M/S. UNI CORN TEXTILES PVT. LTD. 2 COMMISSIONER (APPEALS) WAS JUSTIFIED IN CONFIRMING THE PENALTY OF ` 25,000 I MPOSED BY THE ASSESSING OFFICER UNDER SECTION 271A . 2 . THE FACTS IN BRIEF ARE THAT THE ASSESSEE COMPANY IS ENGAGED IN THE BUSINESS OF TEXTILE AND TRADING IN FABRICS. THE RETURN OF INCOME WAS FILED ON 29 TH OCTOBER 2007, DULY ACCOMPANIED WITH THE AUDIT REPORT UNDER SECTION 44AB. A SURVEY ACTION UNDER SECTION 133A WAS CARRIED OUT O N THE BUSINESS PREMISES OF THE ASSESSEE ON 22 ND MARCH 2007, D URING THE COURSE OF WHICH , ONE OF THE DIRECTORS MR. PAWAN KUMAR AGRAWAL, ADMITTED THAT HE IS NOT MAINTAINING ANY STOCK REGISTER AND ADDITIONAL INCOME OF ` 50 LAKHS WAS OFFERED TO COVER UP ANY KIND OF DISCREPANCIES IN THE BOOKS OF ACCOUNT. ON A PERUSAL OF THE ASSESSMENT ORDER, IT IS SEEN THAT THE ASSESSEE HAS MENTIONED BEFORE THE ASSESSING OFFICER THAT IT IS MAINT AINING FOLLOWING BOOKS OF ACCOUNT, PURCHASE REGISTER, SALES REGISTER, BANK BOOK, CASH BOOK, JOURNAL REGISTER, LEDGER, STOCK BOOK, ETC. HOWEVER, IT WAS ADMITTED THAT THE STOCK BOOK WAS NOT MADE AVAILABLE AT THE TIME OF SURVEY. THE ASSESSEES OTHER BOOKS OF ACCOUNT WERE IMPOUNDED AND INVENTORISED WHICH FACT HAS BEEN MENTIONED IN PARA 5.1 OF THE ASSESSMENT ORDER. THE ASSESSING OFFICER, IN THE ABSENCE OF STOCK REGISTERS AND OTHER DISCREPANCIES HAS REJECTED THE BOOKS OF ACCOUNT AFTER APPLYING THE PROVISIONS OF S ECTION 145 AND PROCEEDED TO COMPLETE THE ASSESSMENT UNDER SECTION 144. HE ALSO INITIATED THE PENALTY PROCEEDINGS UNDER SECTION 271A. IN THE PENALTY ORDER ALSO, THE ASSESSING OFFICER HAS ALSO DULY NOTED THIS FACT AND HAS LEVIED THE PENALTY OF ` 25,000. THIS HAS ALSO BEEN CONFIRMED BY THE LEARNED COMMISSIONER (APPEALS). 3 . BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT IT IS NOT A CASE WHERE THE ASSESSEE IS NOT MAINTAINING ANY BOOKS OF ACCOUNT. IN FACT, THE MAIN ALLEGATION OF THE ASSESSING OFFIC ER IS WITH REGARD TO THE NON MAINTENANCE OF STOCK REGISTERS AND SOME OTHER DOCUMENTS. INSOFAR AS THE ASSESSEE IS CONCERNED, IT HAS MAINTAINED SALES AND PURCHASE REGISTERS, BANK BOOK, LEDGER, DELIVERY CHALLAN BOOK, STATEMENT OF STOCK FILED, ETC. PROVISIONS OF SECTION 271A ENVISAGES THE LEVY OF PENALTY , IF THE PERSON FAILS TO KEEP AND MAINTAIN ANY SUCH BOOKS OF ACCOUNT AND OTHER DOCUMENTS AS REQUIRED UNDER M/S. UNI CORN TEXTILES PVT. LTD. 3 SECTION 44AA AND THE RULES MADE THEREUNDER. SECTION 44AA AND THE RULES DO NOT PROVIDE THAT STOCK REGIST ER HAS TO BE MAINTAINED SPECIFICALLY. EVEN SECTION 2(12A) DEFINES BOOKS OF ACCOUNT INCLUDING LEDGERS, DAY BOOKS, CASH BOOKS, ACCOUNT BOOKS AND OTHER BOOKS. NON MAINTENANCE OF STOCK REGISTER DO NOT MEAN THAT THE ASSESSEE HAS NOT BEEN MAINTAINING ANY BOOKS O F ACCOUNT AND, THEREFORE, PENALTY LEVIED BY THE ASSESSING OFFICER CANNOT BE SUSTAINED. 4 . ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY RELIED UPON THE FINDINGS OF THE ASSESSING OFFICER AS WELL AS THE LEARNED COMMISSIONER (APPEALS). 5 . WE HAVE HEARD THE RIVAL CONTENTION, PERUSED THE RELEVANT FINDINGS OF THE AUTHORITIES BELOW AND THE MATERIAL AVAILABLE ON RECORD. FROM THE FACTS, AS NARRATED ABOVE, IT IS EVIDENT THAT THE ASSESSEE HAS BEEN MAINTAINING BOOKS OF ACCOUNT AND THE SAME WERE IMPOUN DED AT THE TIME OF SURVEY , A LIST OF SUCH BOOKS OF ACCOUNT IMPOUNDED AS MENTIONED IN THE ASSESSMENT ORDER AS WELL AS IN THE ORDER OF THE LEARNED COMMISSIONER (APPEALS), WERE AS UNDER: BOOKS IMPOUNDED : 1 . SHIVAM BANK STATEMENT FILE 2 . BANK STATEMENT FILE (POPUL AR) BOOKS FOUND AND INVENTORISED : 1 . BANK BOOK 2 . NAKAL VAHI BOOK 3 . ROKAD VAHI BOOK 4 . APPOLLO SALES FILE 5 . STATEMENT OF STOCK FILE 6 . DELIVERY CHALLAN BOOK THE ASSESSING OFFICERS MAIN ALLEGATION IS THAT THE STOCK REGISTERS HAVE NOT BEEN MAINTAINED BY THE ASSESSEE WHICH DOES NOT RESULT INTO CORRECT DETERMINATION OF PROFIT. HE HAS REJECTED THE BOOKS OF ACCOUNT AFTER APPLYING M/S. UNI CORN TEXTILES PVT. LTD. 4 THE PROVISIONS OF SECTION 145 AND THEREAFTER COMPLETED THE ASSESSMENT UNDER SECTION 14 4 A. MAINLY BECAUSE THE STOCK REGISTER HAS NOT BEEN MAINTAINED, IT CANNOT BE HELD THAT THE ASSESSEE HAS FAILED TO MAINTAIN BOOKS OF ACCOUNT AS PER THE REQUIREMENT OF SECTION 44AA. NOWHERE IN SECTION 44AA, IT HAS BEEN STATED THAT THE BOOKS OF ACCOUNT HAVE TO BE MAINTAINED AS PER THE PRESCRIBED FORMAT FOR A PARTICULAR BU SINESS. THE PROVISIONS OF RULE 6F HAVE NOT BEEN MADE APPLICABLE TO THE PERSONS CARRYING ON A BUSINESS OR A PROFESSION OTHER THAN THOSE MENTIONED UNDER SUB SECTION (1) OF SECTION 44 AA, T HEREFORE, IT CANNOT BE HELD THAT THE ASSESSEE HAS VIOLATED THE PROVISIO NS OF SECTION 44AA AND, CONSEQUENTLY, LIABLE FOR PENALTY UNDER SECTION 271A. UNLESS SOME SPECIFIC RULES ARE PRESCRIBED FOR MAINTAINING PARTICULAR TYPES OF BOOKS OF ACCOUNT FOR A PARTICULAR TYPE OF BUSINESS, IT CANNOT BE HELD THAT THERE IS A FAILURE ON THE PART OF THE ASSESSEE TO MAINTAIN BOOKS OF ACCOUNT SO AS TO ENTAIL LEVY OF PENALTY UNDER SECTION 271A. ON THE FACTS OF THE ASSESSEES CASE, WE ARE OF THE OPINION THAT NO PENALTY IS WARRANTED UNDER SECTION 271A FOR FAILURE TO MAINTAIN BOOKS OF ACCOUNT AS PER SECTION 44A. CONSEQUENTLY, WE SET ASIDE THE IMPUGNED ORDER PASSED BY THE LEARNED COMMISSIONER (APPEALS) AND CANCEL THE PENALTY IMPOSED BY THE ASSESSING OFFICER. 6 . 6. IN THE RESULT, ASSESSEES APPEAL IS T REATED AS ALLOWED. 6 TH DECEMBER 2013 ORDER PRONOUNCED IN THE OPEN COURT O N 6 TH DECEMBER 2013 SD/ - . D. KARUNAKARA RAO ACCOUNTANT MEMBER SD/ - AMIT SHUKLA JUDICIAL MEMBER MUMBAI, DATED : 6 TH DECEMBER 2013 M/S. UNI CORN TEXTILES PVT. LTD. 5 / COPY OF THE ORDER FORWARDED TO : ( 1 ) / THE ASSESSEE ; ( 2 ) / THE REVENUE; ( 3 ) ( ) / THE CIT(A ) ; ( 4 ) / THE CIT, MUMBAI CITY CONCERNED ; ( 5 ) , , / THE DR, ITAT, MUMBAI ; ( 6 ) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI