M/S SHIV KUMAR BAIGARA AND COMPANY , UDHAMPUR V. INCOME TAX OFFICER UDHAMPUR, UDHAMPUR

ITA 358/ASR/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 0040 (ITAT-AMRITSAR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 11-03-2019
• Assessment Year: 2001-2002
• Appeal Filed On: 05-06-2017
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (SMC) BEFORE SH. SANJAY ARORA, ACCOUNTANT MEMBER I.T.A. NO.358/ASR/2017 AS SESSMENT YEAR: 2001-02 M/S. SHIV KUMAR BAIGRA & CO., WINE SHOP, BUS STAND, UDHAMPUR, J&K. [PAN:ABAFS 2011E] VS. INCOME TAX OFFICER, UDHAMPUR (APPELLANT) (RESPONDENT) APPELLANT BY : SH. P.N.ARORA (AD V.) RESPONDENT BY: SH. CHARAN DASS (D.R.) DATE OF HEARING: 11.03.2019 DATE OF PRONOUNCEMENT: 29.03.2019 ORDER PER SANJAY ARORA, AM: THIS IS AN APPEAL BY THE ASSESSEE DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-JAMMU ('CIT(A) ' FOR SHORT) DATED 10.01.2017, CONFIRMING THE LEVY OF PENALTY U/S. 271 A OF THE INCOME TAX ACT, 1961 ('THE ACT' HEREINAFTER) BY THE ASSESSING OFFICER VI DE ORDER DATED 26.03.2015 FOR ASSESSMENT YEAR (AY) 2001-02. 2. THE ASSESSMENT FOR THE RELEVANT YEAR WAS COMPLET ED U/S. 143(3) ON 26.03.2004 BY REJECTING THE ASSESSEE-FIRMS ACCOUNT S AND ESTIMATING ITS INCOME BY APPLYING A GROSS PROFIT (GP) RATE OF 16%, I.E., AS AGAINST THE DISCLOSED RATE OF 12.78%. THE SAME STOOD CONFIRMED IN APPEAL, WHEREUP ON PENALTY PROCEEDINGS U/S. 271A, I.E., FOR NON-MAINTENANCE OF ACCOUNTS, INITIA TED ALONG WITH, WERE PROCEEDED WITH. THE SAME BEING CONFIRMED IN APPEAL, THE ASSES SEE IS IN SECOND APPEAL. ITA NO. 358/ASR/2017 (AY 2001-02) SHIV K UMAR BAIGRA & CO. V. ITO 2 3. I HAVE HEARD THE PARTIES, AND PERUSED THE MATERIAL ON RECORD. THE IMPUGNED PENALTY STANDS BOTH LEVIED AS WEL L AS CONFIRMED ON THE BASIS THAT THE ASSESSEE HAS NOT MAINTAINED PROPER A CCOUNTS. SECTION 271A PRESCRIBES A PENALTY, IN THE SUM OF RS.25,000, FOR A FAILURE TO KEEP AND MAINTAIN SUCH BOOKS OF ACCOUNTS AND DOCUMENTS AS REQUIRED U/ S. 44AA, OR RULES MADE THERE- UNDER FOR ANY PREVIOUS YEAR. RULE 6F, I.E., THE REL EVANT RULE, TO WHICH REFERENCE WAS ALSO MADE DURING HEARING, SPECIFIES CASH BOOK; JOUR NAL; LEDGER, BESIDES BILLS FOR EXPENSES AND SALES, I.E., AS RECEIVED AND ISSUED BY THE ASSESSEE, AND ON THE BASIS OF WHICH THE ACCOUNTS HAVE BEEN MAINTAINED. THERE IS N O FINDING EITHER BY THE ASSESSING OFFICER (AO) OR EVEN BY THE LD. CIT(A) QUA ANY OF THESE BOOKS OR DOCUMENTS BEING NOT MAINTAINED BY THE ASSESSEE. HOW, THEN, ONE WONDERS SECTION 271A GETS ATTRACTED ? AS AFORE-NOTED, BOTH THE AUTHORITIES HAVE STATED OF THE ASSESSEE NOT MAINTAINING PROPER ACCOUNTS. WHILE T HAT MAY WELL BE TRUE, EVEN AS THE ASSESSEE CLAIMS OTHERWISE, WHERE THE ACCOUNTS A RE NOT CORRECT AND COMPLETE, I.E., TO THE SATISFACTION OF THE AO, IT IS SECTION 145(3) THAT WOULD GET ATTRACTED, ENTITLING THE ASSESSING AUTHORITY TO, REJECTING THE BOOKS RESULTS, MAKE AN ESTIMATE OF THE ASSESSEES INCOME RELYING ON THE RELEVANT MATER IAL. AS IT APPEARS, THERE HAS OCCURRED A CONFUSION BETWEEN THE BOOKS OF ACCOUNT , REFERRED TO IN SECTION 44AA AND SECTION 271A, AND THE ACCOUNTS REFERRED TO IN SECTION 145(3). THE REJECTION OF ACCOUNTS PER SE WOULD NOT, EVEN AS EXPLAINED IN ASST. CIT VS. AGGARWAL CONSTRUCTION CO . [2007] 106 ITD 129 (CHD)(TM), ATTRACT SECTION 271 A. IN MY CONSIDERED OPINION, THEREFORE, NO CASE FOR PE NALTY U/S. 271A IS MADE OUT. I, ACCORDINGLY, HAVE NO HESITATION IN DIRECTIN G DELETION OF THE IMPUGNED PENALTY. I DECIDE ACCORDINGLY. ITA NO. 358/ASR/2017 (AY 2001-02) SHIV K UMAR BAIGRA & CO. V. ITO 3 4. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN CO URT ON MARCH 29, 2019 SD/- (SANJAY ARORA) ACCOUNTANT MEMBER DATE: 29.03.2019 /PK/ PS. COPY OF THE ORDER FORWARDED TO: (1) THE APPELLANT: M/S. SHIV KUMAR BAIGRA & CO. , WINE SHOP, BUS STAND, UDHAMPUR, J&K. (2) THE RESPONDENT: INCOME TAX OFFICER, UDHAMPU R (3) THE CIT(APPEALS)-JAMMU, J&K (4) THE CIT CONCERNED (5) THE SR. DR, I.T.A.T TRUE COPY BY ORDER