Kasi Viswanathan Palaniappan, CHENNAI V. DCIT, CHENNAI

ITA 3287/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4097 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-07-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 04-07-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 05-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MRS R ILAVARASI
• Assessee Lawyers: T VASUDEVAN
• Section: 143(3)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH: CHENNAI , , ! ' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ./ ITA NOS.3286 & 3287/MDS/2016 /ASSESSMENT YEAR: 2012-13 SHRI KASI VISWANATHAN, PALANIAPPAN, NO.35, PONNAPPA CHETTY STREET, CHENNAI 600 003. VS. THE DY. COMMISSIONER OF INCOME TAX, NON-CORPORATE CIRCLE-5, CHENNAI. [PAN: AADPP 6886 E ] ( & /APPELLANT) ( '(& /RESPONDENT) & ) / APPELLANT BY : MR.T. VASUDEVAN, ADV. '(& ) /RESPONDENT BY : MRS.R. ILAVARASI, JCIT ) /DATE OF HEARING : 04.07.2017 ) /DATE OF PRONOUNCEMENT : 05.07.2017 / O R D E R PER GEORGE MATHAN , JUDICIAL MEMBER : ITA NO.3286/MDS/2016 IS AN APPEAL FILED BY THE ASS ESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-5 , CHENNAI, IN ITA NO.104/CIT(A)-5/15-16 DATED 29.09.2016 FOR THE AY 2012-13 AGAINST THE CONFIRMATION OF THE LEVY OF PENALTY U/S.271(1)(C) O F THE ACT. ITA NO.3287/MDS/2016 IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS)-5, CHENNAI, IN ITA NO.103/CIT(A)- 5/15-16 DATED 17.10.2016 FOR THE AY 2012-13 AGAINS T THE CONFIRMATION OF THE LEVY OF PENALTY U/S.271B OF THE ACT. ITA NOS.3286 & 3287/MDS/2016 :- 2 -: 2. MRS.R. ILAVARASI, JCIT, REPRESENTED ON BEHALF OF THE REVENUE AND MR.T. VASUDEVAN, ADV., REPRESENTED ON BEHALF OF THE ASSESSEE. 3. IT WAS SUBMITTED BY THE LD.AR THAT THE RETURN FI LED BY THE ASSESSEE WAS PROCESSED AND THE ASSESSMENT WAS COMPLETED U/S. 143(3) ON 30.01.2015 WHEREIN THE AO HAD DISALLOWED RS.21,000/ - BEING THE DONATION MADE BY THE ASSESSEE AND THE ADDITION OF R S.99,528/- REPRESENTING THE DIFFERENCE IN THE CREDITORS BALAN CES AS PER THE ASSESSEES BOOKS AND AS PER THE CREDITORS BOOKS. IT WAS A SUB MISSION THAT THE TOTAL INCOME DECLARED BY THE ASSESSEE IN HIS RETURN WAS R S.63,31,689/- AND THE TOTAL INCOME ASSESSED WAS RS.66,18,160/-. AS THE A DDITIONS WERE MINOR, THE ASSESSEE HAD ACCEPTED THE TWO ADDITIONS AND HAD NOT BEEN FILED ANY APPEAL. IT WAS A SUBMISSION THAT THE ASSESSEE IS A DEALER IN BAKERY, CONFECTIONERY, PHARMACEUTICAL, ICE CREAM AND BEVERA GE RAW MATERIAL. IT WAS A SUBMISSION THAT AS A CONSEQUENCE OF THE ADDIT ION, PENALTY PROCEEDINGS HAD BEEN INITIATED AGAINST THE ASSESSEE . IT WAS A SUBMISSION THAT THE DIFFERENCE IN THE CREDITORS BALANCES WAS O N ACCOUNT OF THE TRADE DISCOUNT WHICH HAD BEEN GRANTED BY THE CREDITORS. IT WAS A SUBMISSION THAT THE ASSESSEE HAD NOT CLAIMED THE TRADE DISCOUN T IN ITS BOOKS AS THE CREDITORS OF THE ASSESSEE WERE YET TO DISCUSS THE Q UANTITY DISCOUNT AND THE PAYMENT PERFORMANCE DISCOUNT ALSO. IT WAS A SUBMIS SION THAT THE ASSESSEE HAS PROVIDED ALL THE PARTICULARS IN HIS RE TURN AND THERE WAS NO CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS AND THIS WAS ALSO NOT THE CASE OF THE AO. IT WAS A SUBMISSION T HAT IN RESPECT OF THE ITA NOS.3286 & 3287/MDS/2016 :- 3 -: DONATION, THE DETAILS HAD BEEN FURNISHED. HOWEVER, THE AO HAD DISALLOWED ON THE GROUND THAT ADEQUATE PROOF HAD NOT BEEN PROD UCED. IT WAS A SUBMISSION THAT THE ADDITIONS IN THE COURSE OF THE ASSESSMENT WERE MADE BY MAKING DISALLOWANCE FROM THE DETAILS FURNISHED B Y THE ASSESSEE AND NO PENALTY WAS LEVIABLE. IT WAS A FURTHER SUBMISSION THAT EVEN THE REPLY FILED BY THE ASSESSEE HAS NOT BEEN FOUND TO BE FALSE. CO NSEQUENTLY, NO PENALTY IS LEVIABLE BY PLACING RELIANCE ON THE DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S.SALEM AUTOMECH (IN DIA) P. LTD. IN ITA NO.2307/MDS/2014 DATED 12.04.2017 AND ALSO THE DECI SION IN THE CASE OF MR.R.A.PALANISAMY IN ITA NO.1730/MDS/2015 DATED 06. 04.2016. 4. IN REPLY, THE LD.DR VEHEMENTLY SUPPORTED THE ORD ERS OF THE AO & CIT(A). IT WAS A SUBMISSION THAT THERE WAS A FAILU RE ON THE PART OF THE ASSESSEE TO DISCLOSE TRUE INCOME. IT WAS A SUBMISS ION THAT THE EVIDENCES HAD NOT BEEN PROPERLY FURNISHED BY THE ASSESSEE, CO NSEQUENTLY THE DISALLOWANCE HAD TAKEN PLACE. IN RESPECT OF SUNDRY CREDITORS, IT WAS ONLY BECAUSE THE AO VERIFIED THE BALANCES, IT WAS FOUND THAT THERE WAS AN EXCESS CLAIM ON THE PART OF THE ASSESSEE. IT WAS A SUBMISSION THAT THE PENALTY WAS LIABLE TO BE CONFIRMED. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE ASSESSMENT ORDER IN THE PRESENT CASE CLEARLY SHOWS THAT THE ADDITION REPRESENTS LESS THAN 0.5% OF THE TOTAL INCOME DISCL OSED BY THE ASSESSEE. THOUGH THREE DISALLOWANCES HAD BEEN MADE BY THE AO IN THE ASSESSMENT ITA NOS.3286 & 3287/MDS/2016 :- 4 -: ORDER, PENALTY HAS BEEN LEVIED ONLY IN RESPECT OF T WO ADDITIONS. A PERUSAL OF THE PENALTY ORDER SHOWS THAT THE ASSESSEE HAS FI LED HIS REPLY ALONG WITH EVIDENCES TO THE PENALTY PROCEEDINGS. THIS, REPLY OF THE ASSESSEE HAS BEEN BRUSHED ASIDE AS NOT ACCEPTED. THE REPLY OF T HE ASSESSEE HAS NOT BEEN FOUND TO BE FALSE OR IMPROBABLE. 6. IN THESE CIRCUMSTANCES, RESPECTFULLY FOLLOWING T HE DECISION OF THE CO- ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF M/S. SALEM AUTOMECH (INDIA) P. LTD. AND IN THE CASE OF MR.R.A.PALANISAMY REFERR ED TO SUPRA, WE ARE OF THE VIEW THAT AS THE EXPLANATION PROVIDED BY THE AS SESSEE HAS NOT BEEN DISPROVED, NO PENALTY U/S.271(1)(C) IS LEVIABLE ON THE ASSESSEE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS STANDS ALLOWED. ITA NO.3287/MDS/2016: 8. IT WAS SUBMITTED BY THE LD.AR THAT THE PENALTY U /S.271B HAD BEEN LEVIED ON THE ASSESSEE ON ACCOUNT OF THE ALLEGED FA ILURE ON THE PART OF THE ASSESSEE TO GET HIS ACCOUNTS AUDITED WITHIN TIME AN D FURNISH THE AUDIT REPORT. IT WAS A SUBMISSION THAT THE ASSESSEES CH ARTERED ACCOUNTANT SHRI A.R. CHINNIAH WAS UNDERGOING MEDICAL TREATMENT ON A CCOUNT OF HIS ILLNESS AND HEART PROBLEM. IT WAS A SUBMISSION THAT THE AU DITOR SUBSEQUENTLY EXPIRED. IT WAS A SUBMISSION THAT ON ACCOUNT OF TH E ILLNESS OF THE ASSESSEES CHARTERED ACCOUNTANT, THE RETURN OF THE ASSESSEE WAS DELAYED AND FILED ONLY ON 16.11.2012. IT WAS A SUBMISSION THAT HOWEVER AUDIT ITA NOS.3286 & 3287/MDS/2016 :- 5 -: REPORT HAD BEEN OBTAINED WITHIN THE DUE DATE. IT W AS A SUBMISSION THAT THE AUDIT REPORT WAS OBTAINED ON 30.09.2012. HOWEV ER, RETURN WAS REQUIRED TO BE FILED ON-LINE AND AS THE ASSESSEES CHARTERED ACCOUNTANT UNWELL AND SUBSEQUENTLY EXPIRED, THE RETURN COULD B E FILED ONLY ON 16.11.2012. IT WAS A SUBMISSION THAT WITHOUT FILIN G THE RETURN OF INCOME, FILING OF THE AUDIT REPORT COULD NOT HAVE BEEN DONE . IT WAS A FURTHER SUBMISSION THAT THE REPLY OF THE ASSESSEE HAS BEEN DISBELIEVED ALLEGING THAT THE ASSESSEE COULD NOT FURNISH ANY PROOF TO SH OW THAT THE ACCOUNTS WERE AUDITED AS ON 30.09.2012 OR THAT THE DELAY IN FILING RETURNS WAS DUE TO HEALTH PROBLEM OF THE AUDITOR. IT WAS A SUBMISS ION THAT SHRI A.R.CHINNIAH HAS EXPIRED. IT WAS A FURTHER SUBMISS ION THAT AUDIT REPORT IS DATED 30.09.2015 PROVED THAT IT WAS OBTAINED ON 30. 09.2015. IT WAS A FURTHER SUBMISSION THAT THE AUDIT REPORT WAS A SUPP ORTING DOCUMENT TO ASSIST THE AO IN THE COURSE OF THE ASSESSMENT, THE AUDIT REPORT WAS VERY MUCH AVAILABLE. IT WAS A SUBMISSION THAT THERE WAS NO DELAY IN OBTAINING THE AUDIT REPORT AND CONSEQUENTLY NO PENALTY WAS LE VIABLE. 9. IN REPLY, THE LD.DR VEHEMENTLY SUPPORTED THE ORD ERS OF THE AO & CIT(A). A PERUSAL OF THE PENALTY ORDER U/S.271B SH OWED THAT THE ASSESSEE IS BEING ASKED TO PROVE THAT THE AUDIT REPORT HAS B EEN OBTAINED ON THE DATE AS HAS BEEN MENTIONED IN THE AUDIT REPORT, JUS T BECAUSE, THE RETURN OF INCOME ALONG WITH SUCH AUDIT REPORT WAS FILED BE LATEDLY. THIS, IN FACT, IS QUESTIONING THE VERY VERACITY OF THE AUDIT REPORT. NO DEFECT IN THE AUDIT REPORT HAS BEEN POINTED OUT IN THE COURSE OF THE AS SESSMENT NOR, AS SUCH, ITA NOS.3286 & 3287/MDS/2016 :- 6 -: AUDIT REPORT HAS BEEN FOUND WANTING IN RESPECT OF A NY OF THE ISSUES. IN ANY CASE, IT IS ACCEPTED FACT THAT THE AUDIT REPORT CAN BE FILED ONLY WITH THE RETURN OF INCOME AND THE RETURN OF INCOME HAS TO BE FILED ON-LINE. THE ILLNESS OF THE ASSESSEES CHARTERED ACCOUNTANT HAS BEEN PROVED BY PRODUCING MEDICAL CERTIFICATE. IN THESE CIRCUMSTAN CES, WE ARE OF THE VIEW THAT THE PENALTY U/S.271B IN THE ASSESSEES CASE IS NOT EXIGIBLE IN SO FAR AS THE AUDIT REPORT HAS BEEN OBTAINED ON 30.09.2012. IN THESE CIRCUMSTANCES, THE PENALTY AS LEVIED BY THE AO AND CONFIRMED BY THE CIT(A) STANDS DELETED. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS STANDS ALLOWED. 11. IN THE RESULT, BOTH THE APPEALS FILED BY THE AS SESSEE ARE STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON JULY 05, 201 7, AT CHENNAI. SD/- SD/- ( ) ( CHANDRA POOJARI ) ! /ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) ! /JUDICIAL MEMBER /CHENNAI, 1 /DATED: JULY 05, 2017. TLN ) '23 43 /COPY TO: 1. & /APPELLANT 4. 5 /CIT 2. '(& /RESPONDENT 5. 3 ' /DR 3. 5 ( ) /CIT(A) 6. /GF