Smt Sally Thomas, Chengannur V. DCIT, Thiruvalla

ITA 347/COCH/2009

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0844 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 8 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2011
• Appeal Filed By: Assessee
• Bench Allotted: DB
• Next Hearing Date: 07-03-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 11-06-2009
• Court: TRIBUNAL
• Department Lawyers: TJM VINCENTJR
• Assessee Lawyers: VENKITACHALAM
• Keywords: Reasonable cause

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.VIJAYAKUMARAN & SHRI SANJAY ARORA I.T.A.NO.347/COCH/2009 ASSESSMENT YEAR:2005-06 SALLY THOMAS, CHENGANNUR. PA NO.ABAPT 5039K VS. THE DY. COMMISSIONER OF INCOME-TAX, CIRCLE-1, THIRUVALLA. (APPELLANT) ( RESPONDENT ) & I.T.A.NO.687/COCH/2010 ASSESSMENT YEAR:2005-06 SALLY THOMAS, CHENGANNUR. PA NO.ABAPT 5039K VS. THE DY. COMMISSIONER OF INCOME-TAX, CIRCLE-1, THIRUVALLA. (APPELLANT) (RESPONDEN T) APPELLANT BY SHRI M.S. VENKITACHALAM RESPONDENT BY SHRI TJM VINCENT,JR.DR O R D E R PER N.VIJAYAKUMARAN,J.M: BOTH THESE APPEALS ARE BY THE ASSESSEE FOR THE VER Y SAME ASSESSMENT YEAR 2005-06. 2. ITA NO.347/COCH/2009 IS AGAINST THE LEVY OF PENALTY U/S.271B OF THE I.T.ACT. THIS IS DIRECTED AGAIN ST THE ORDER OF THE CIT(APPEALS)I, TRIVANDRUM, DATED 19-01-2009 . THE ITA NO. 347/COCH/2009 & ITA NO.687/COCH/2010 SALLY THOMAS. 2 RELEVANT FACTS ARE THAT THE ASSESSEE IS AN INDIVIDU AL. SHE IS DOING MONEY LENDING BUSINESS AT CHENGANNUR. THE AS SESSING OFFICER LEVIED PENALTY FOR FAILURE TO COMPLY WITH T HE REQUIREMENT U/S.44AB. IT WAS THE EXPLANATION OF TH E ASSESSEE BEFORE THE AUTHORITIES THAT INITIALLY ASSE SSEE FILED THE RETURN OF INCOME DECLARING LOSS. AT THE TIME OF ASSESSMENT, IT WAS EXPLAINED BEFORE THE AUTHORITIES THAT LOSS WAS INCURRED DUE TO NON-RECEIPT OF INTEREST FR OM LOANEES. TO THAT EXTENT, CONFIRMATION LETTERS FRO M LOANEES WERE PRODUCED. THE LOANEES WERE CONFIRMED THE B ALANCE OUTSTANDING AS NON-PAYMENT OF INTEREST THEREOF. T HE ASSESSING OFFICER WANTED TO ENQUIRE IN CASE OF FEW LOANEES BY ISSUING SUMMONS U/S.131. ONE LOANEE WAS QUESTIO NED AND CONFIRMED THE LOANS BUT DENIED THAT NO INTEREST WAS PAID BY HIM. IT WAS FURTHER EXPLAINED BY THE ASSESSEE THAT THE SAID LOANEE SHOULD NOT BE RELIED UPON SINCE HE WAS TRYING TO WRIGGLE OUT OF THE INTEREST LIABILITY BY MAKING USE OF THE INCOME-TAX PROCEEDINGS. HOWEVER, ULTIMATELY ASSES SEE HAS AGREED TO CALCULATE THE INTEREST ON ACCRUAL BASIS O N THE SAID LOANS EVEN THOUGH SHE WAS FOLLOWING THE CASH SYSTEM OF ACCOUNTING. IT WAS THE CONTENTION OF THE ASSESSEE T HROUGHOUT THE PROCEEDINGS THAT INCOME EXPLAINED AND ADMITTED WAS ITA NO. 347/COCH/2009 & ITA NO.687/COCH/2010 SALLY THOMAS. 3 NEVER RECEIVED BY THE ASSESSEE. IT IS ONLY TO BUY PEACE WITH THE DEPARTMENT AND TO AVOID QUARREL, ASSESSEE ADMITTED THIS AS INCOME FOR THIS ASSESSMENT YEAR. HOWEVER, ASSESSING OFFICER LEVIED PENALTY FOR NOT COMPLYING WITH THE PROVISIONS OF SECTION 44AB, WHICH IS WRONG. THIS IS THE REASONABLE CAUSE ATTRIBUTABLE THROUGHOUT THE PROCEE DINGS. HOWEVER, THIS REASONABLE CAUSE WAS NOT FOUND ACCEPT ABLE TO THE AUTHORITIES. ULTIMATELY, THE ASSESSEE IS IN A PPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. BEFORE ADVERTING TO THE MERITS OF THE CASE, THE APPEAL IS DELAYED BY 31 DAY S. A CONDONATION PETITION ALONG WITH AN AFFIDAVIT DATED 10-06- 2009 HAS BEEN FILED STATING THAT DUE TO ILL AND ACU TE HYPER TENSION WHICH LATER DEVELOPED TO A SEVERE STOMACH I NFECTION, THE ASSESSEE WAS PREVENTED FROM FILING THE APPEAL W ITHIN THE TIME. THE ASSESSEE MADE EFFORTS TO FILE THE APPEA L AS AND WHEN SHE RECOVERED FROM THE ILLNESS WITHOUT ANY FUR THER DELAY. ITA NO. 347/COCH/2009 & ITA NO.687/COCH/2010 SALLY THOMAS. 4 4. ON THE OTHER HAND, THE LD. D.R. VEHEMENTLY OPPOS ED THE CONDONATION PETITION. 5. HAVING HEARD RIVAL SUBMISSIONS AND AFTER TAKING A PRAGMATIC APPROACH AS LAID DOWN BY THE HONBLE SUPREME COURT IN THE CASE OF COLLECTOR OF LAND ACQUISITION VS. MST. KATIJI 167 ITR 471, WE CONDONE THE DELAY AND ADMIT THE APPEAL. 6. ON MERITS, THE LD. COUNSEL FOR THE ASSESSEE BROU GHT TO OUR NOTICE THAT WITH REFERENCE TO THE ASSESSMENT YE AR 2006- 07, WHEREIN AT PAGE NO.43 OF THE PAPER BOOK, THE AS SESSING OFFICER HAS GIVEN DEDUCTION IN RESPECT OF INTEREST RELATING TO THE EARLIER YEAR RECEIVED DURING THE ASSESSMENT YEA R, I.E. 2006-07. THIS WOULD GO TO SHOW THAT THE ASSESSING OFFICER WAS WELL AWARE THAT THE ASSESSEE IS KEEPING BOOKS U NDER CASH SYSTEM OF ACCOUNTING AND THAT IS WHY DEDUCTION WAS GIVEN RELATING TO THE INTEREST OF THE EARLIER YEAR RECEIVED DURING THE ASSESSMENT YEAR 2006-07. FURTHER CONTE NTION OF THE LD. COUNSEL FOR THE ASSESSEE IS THAT THE ASSESS ING OFFICER HAS IMPOSED PENALTY AS A WHOLE. ONLY, ONE PERSON HAS BEEN SUMMONED AND EXAMINED AND THAT PERSON IS HAVING LIA BILITY ITA NO. 347/COCH/2009 & ITA NO.687/COCH/2010 SALLY THOMAS. 5 OF ERROR: UNDEFINED OFFENDING COMMAND: RUPEE STACK: / INDIAN