SNEHAL RAJENDRA PATHAK, MUMBAI V. ITO 26(1)(1), MUMBAI

ITA 3550/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7841 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 10 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 19-05-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 19-05-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Keywords: Business income; Bonafide belief

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH E, MUMBAI BEFORE SHRI G.S.PANNU, ACCOUNTANT MEMBER AND SHRI AMARJIT SINGH, JUDICIAL MEMBER ITA NO.3550/MUM/2014 (AY. 2009-10) SMT. SNEHAL RAJENDRA PATHAK, FLAT NO.16,APNA GHAR, CUFF PARADE, COLABA, MUMBAI 400 055. PAN: AFCPP 1593A ...... APPELLANT VS. THE INCOME TAX OFFICER 26(1)(1), CHARNI ROAD, MUMBAI. .... RESPONDENT APPELLANT BY : NONE RESPONDENT BY : SHRI A.K.NAYAK DATE OF HEARING : 29/03/2017 DATE OF PRONOUNCEMENT : 31/03/2017 ORDER PER G.S.PANNU,A.M: THE CAPTIONED APPEAL FILED BY THE ASSESSEE PERT AINING TO ASSESSMENT YEAR 2009-10 IS DIRECTED AGAINST AN ORDE R PASSED BY CIT(A)-28 MUMBAI DATED 18/03/2014, WHICH IN TURN, ARISES OUT OF AN ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 271B OF THE IN COME TAX ACT, 1961(IN SHORT THE ACT), DATED 28/06/2012. 2. IN THIS APPEAL, ASSESSEE HAS RAISED THE FOLLOWIN G GROUNDS OF APPEAL:- THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) HA S ERRED IN CONFIRMING PENALTY RS.44951/- AGAINST THE PRINCIPAL OF NATURE JUSTICE. 2 ITA NO.3550/MUM/2014 (AY. 2009-10) YOUR APPELLATE SUBMIT THAT IN STOCK MARKET NET EFFE CT OF SALES & PURCHASE OF SHARES SHOULD BE TAKEN FOR CALCULATING LIMIT U/S 44 AB OF FOR 40 LACS. YOUR APPELLATE THEREFORE PRAYS YOUR HONOUR TO DELET E THE PENALTY CO FIRM BY THE COMMISSIONER OF INCOME TAX APPEAL U/S 271B SHOULD B E DELETED. 3. AT THE TIME OF HEARING NONE APPEARED ON BEHALF O F THE ASSESSEE INSPITE OF ISSUANCE OF NOTICE OF HEARING BY RPAD, T HEREFORE, WE PROCEED TO DECIDE THE APPEAL EX-PARTE, QUA THE ASSESSEE AFTER HEARING LD. DEPARTMENTAL REPRESENTATIVE AS PER RULE 24 OF INCO ME- TAX (APPELLATE TRIBUNAL)RULES, 1963. THE ONLY ISSUE IN THIS APPEAL RELATES TO LEVY OF PENALTY OF RS.54,645/- UNDER SECTION 271B OF THE AC T. 4. IN BRIEF, THE RELEVANT FACTS ARE THAT THE ASSESS EE IS AN INDIVIDUAL, WHOSE SOURCE OF INCOME IS BY WAY OF SALARY AND FROM OTHER SOURCES NAMELY, INTEREST INCOME. THE ASSESSING OFFICER NOTED THAT DURING THE PERIOD UNDER CONSIDERATION ASSESSEE HAD UNDERTAKEN SALE AND PURC HASE OF SHARES. THE ASSESSING OFFICER NOTED THAT THE TOTAL SALES WERE T O THE TUNE OF RS.1,09,28,994/-, WHICH WAS IN EXCESS OF THE LIMIT PRESCRIBED UNDER SECTION 44AB OF THE ACT AND, THEREFORE, ASSESSEE WAS REQUIR ED TO GET HER ACCOUNTS AUDITED. ON THE FAILURE OF THE ASSESSEE TO GET HER ACCOUNTS AUDITED IN TERMS OF SECTION 44AB OF THE ACT, THE ASSESSING OFFICER L EVIED PENALTY OF RS.54,645/-. 5. THE CLAIM OF THE ASSESSEE BEFORE THE LOWER AUTHO RITIES HAS BEEN THAT SHE WAS UNDER A BONAFIDE BELIEF THAT ONLY THE NET OF SALES AND PURCHASES IS REQUIRED TO BE SEEN FOR THE PURPOSES OF SECTION 44A B OF THE ACT AND THAT SUCH AN AMOUNT WAS BELOW THE PRESCRIBED LIMIT OF RS .40,00,000/-. THE ASSESSING OFFICER AS WELL AS THE CIT(A) WERE NOT SA TISFIED WITH THE 3 ITA NO.3550/MUM/2014 (AY. 2009-10) EXPLANATION FURNISHED AND ACCORDINGLY LEVIED PENALT Y UNDER SECTION271B OF THE ACT. 6. AFTER HEARING LD. DEPARTMENTAL REPRESENTATIVE A ND ON PERUSAL OF THE ORDERS OF THE AUTHORITIES BELOW WE FIND THAT THE BO NAFIDE BELIEF OF THE ASSESSEE CAN BE A GOOD GROUND TO MITIGATE THE RIGOU RS OF SECTION 271B OF THE ACT. QUITE CLEARLY, THE INCOME TAX AUTHORITIES HAVE NOT DOUBTED THE BONAFIDES OF THE CLAIM MADE BY THE ASSESSEE BUT THE SAME HAS BEEN MERELY BRUSHED ASIDE. THEREFORE, IT IS DIRECTED THAT THE PENALTY OF RS.54,645/- LEVIED UNDER SECTION 271B OF THE ACT BE DELETED. 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED , AS ABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON 31/03/2017 SD/- SD/- (AMARJIT SINGH ) (G.S. PANNU) JUDICIAL MEMBER ACCOCUNTANT MEMBER MUMBAI, DATED 3103/2017 VM , SR. PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT , 2. THE RESPONDENT. 3. THE CIT(A)- 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI