NATESA GOUNDER PONNUSAMY, ERODE V. ITO, WARD-1(2), ERODE

ITA 3208/CHNY/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 4549 (ITAT-CHENNAI)
• Duration Of Justice: 9 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2015-2016
• Appeal Filed On: 26-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Set aside

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI , , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER ./I.T.A. NO.3208/CHNY/2018 ! ' / ASSESSMENT YEAR : 2015-2016. SHRI NATESA GOUNDER PONNUSAMY, 67/C, VETRI APARTMENTS, VIDHYA NAGAR, THINDAL, ERODE 638 012. [PAN AAIPN 6780C] VS. THE INCOME TAX OFFICER, WARD 1(2) ERODE. ( / APPELLANT) ( /RESPONDENT) # $ % / APPELLANT BY : SHRI. S. SRIDHAR, ADVOCATE &' # $ % /RESPONDENT BY : SHRI. M.S. NETHRAPAL, IRS, JCIT. ( ) $ * /DATE OF HEARING : 21-08-2019 +,'! $ * /DATE OF PRONOUNCEMENT : 27-08-2019 / O R D E R PER INTURI RAMA RAO , ACCOUNTANT MEMBER: THIS IS AN APPEAL FILED BY THE ASSESSEE DIRECTED AG AINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEAL S)-3, COIMBATORE (CIT(A) FOR SHORT) DATED 05.10.2018 FOR THE ASSES SMENT YEAR (AY) 2015-2016 CONFIRMING LEVY OF PENALTY OF 25,000/- U/S.271A OF THE ACT. ITA NO.3208/2019 :- 2 -: 2. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL : 1) THE ORDER OF THE LEARNED CIT(A) IS ERRONEOUS I N LAW AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 2) THE LEARNED CIT (A) ERRED IN NOT CONSIDERING THE GROUNDS OF APPEAL IN PROPER PERSPECTIVE. 3) THE LEARNED CIT (A) GROSSLY ERRED IN NOT CONSIDE RING THE IMPORTANT FACT THAT THE APPELLANT COULD NOT MAINTAI N BOOKS OF ACCOUNTS FOR THE IMPUGNED ASSESSMENT YEAR, FOR HIS ONLY DAUGHTER, AGED ABOUT 24 YEARS, EXPIRED ON 14/05/201 4. COPY OF THE DEATH CERTIFICATE IS ENCLOSED. AND FOR OTHER REASONS THAT MAY BE ADDUCED AT THE TI ME OF HEARING, YOUR APPELLANT PRAYS THAT THE APPEAL BE AD MITTED, CONSIDERED AND JUSTICE BE RENDERED. 3. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT IS AN INDIVIDUAL DERIVING INCOME UN DER THE HEAD INCOME FROM BUSINESS. THE RETURN OF INCOME FOR THE AY 2015-16 WAS FILED ON 18.03.2016 DISCLOSING TOTAL INCOME OF RS. 7,37,030/-. AGAINST THE SAID RETURN OF INCOME, THE ASSESSMENT WAS COMPL ETED BY THE ASSESSING OFFICER ON 29.09.2017 PASSED U/S.143(3) OF THE ACT AT TOTAL INCOME OF F10,37,605/-. ASSESSEE ADMITTEDLY WAS N OT MAINTAINING ANY BOOKS OF ACCOUNT AND HE HAD FILED RETURN OF INC OME ADMITTING TAXABLE INCOME OF 2% ON GROSS RECEIPT OF F3,00,57,5 70/-, WHEREAS THE ASSESSING OFFICER HAD ASSESSED INCOME AT 3% OF THE GROSS RECEIPTS. ITA NO.3208/2019 :- 3 -: THE ASSESSING OFFICER WAS OF THE OPINION THAT SINCE HE HAD NOT MAINTAINED BOOKS OF ACCOUNTS, PENALTY U/S.271A OF THE ACT IS LEVIABLE AND ACCORDINGLY, HE ISSUED SHOW NOTICE TO THE A SSESSEE TO SHOW CAUSE WHY AN ORDER IMPOSING PENALTY U/S.271A OF TH E ACT SHOULD NOT BE MADE. IN RESPONSE TO SHOW CAUSE NOTICE, ASSESSE E EXPLAINED THAT THE BOOKS OF ACCOUNTS COULD NOT BE MAINTAINED FOR REASON THAT HE WAS MENTALLY DISTURBED FOLLOWING THE DEATH OF HIS ONLY DAUGHTER. HOWEVER, THE ASSESSING OFFICER REJECTED THE EXPLANATION HOLD ING THAT IN EARLIER YEARS ALSO, BOOKS OF ACCOUNTS WERE NOT MAINTAINED. ACCORDINGLY, HE LEVIED PENALTY OF F25,000/- U/S.271A OF THE ACT VID E ORDER DATED 28.03.2018. 4. BEING AGGRIEVED, AN APPEAL WAS PREFERRED BEFORE THE LD.CIT(A) WHO VIDE IMPUGNED ORDER CONFIRMED LEVY O F PENALTY. 5. BEING AGGRIEVED, THE APPELLANT IS IN APPEAL BEFORE US IN THE PRESENT APPEAL. 6. WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATE RIAL ON RECORD. THE ONLY ISSUE INVOLVED IN THE PRESENT APPE AL RELATES TO LEVY OF PENALTY U/S.271A OF THE ACT. THE PROVISIONS OF SEC TION 44AA OF THE ACT MANDATES THAT PRESCRIBED BOOKS OF ACCOUNTS SHOULD B E MAINTAINED ONLY IN RESPECT OF PRESCRIBED ASSESSEES. ADMITTEDLY, A SSESSEE IS NOT ONE OF ITA NO.3208/2019 :- 4 -: THE PRESCRIBED ASSESSEES. SINCE THE PROVISIONS OF INCOME TAX ACT DOES NOT MANDATES MAINTAINING BOOKS OF ACCOUNTS IN RESPECT OF BUSINESS CARRIED IN BY THE ASSESSEE, NO PENALTY CA N BE LEVIED U/S.271A OF THE ACT. HOWEVER, IN CASE WHERE THE TU RNOVER EXCEEDS THE PRESCRIBED LIMIT, ASSESSEE IS REQUIRED TO SUBMIT S TATUTORY AUDIT REPORT AND FAILURE TO COMPLY WITH THIS, PENALTY IS LEVIABL E U/S.271B OF THE ACT. THEREFORE, PENALTY UNDER THE PROVISIONS OF SECTION 271A OF THE ACT CANNOT BE LEVIED IN THE PRESENT CASE. ACCORDINGLY, WE SET ASIDE THE ORDERS OF THE LOWER AUTHORITIES AND ALLOW THE APPE AL FILED BY THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STA NDS ALLOWED. ORDER PRONOUNCED ON 27TH DAY OF AUGUST, 2019, AT CHENNAI. SD/- SD/- ( ) (GEORGE MATHAN) /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER -) / CHENNAI . / DATED:27 TH AUGUST, 2019. KV /0 $0& *12032'* / COPY TO: 0 1 . # / APPELLANT 3. 0 ( 4*056 / CIT(A) 5. 278 0& * 9 / DR 2. &' # / RESPONDENT 4. 0 ( 4* / CIT 6. 8:0;) / GF