The Income-tax Oficer, Bathinda V. The Bathinda Truck Operator Union, Bathinda

ITA 386/ASR/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 73179 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 2 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 01-01-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 04-10-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMRIK CHAND
• Assessee Lawyers: P N ARORA
• Keywords: Rule of consistency
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH; AMRITSAR. BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER AND SH. B.P. JAIN, ACCOUNTANT MEMBER I.T.A. NO. 386 (ASR)/2012 ASSESSMENT YEAR: 2008-09 PAN: AAAAT4315L INCOME TAX OFFICER, VS. BATHINDA TRUCK OPERATOR WARD-1(1), BATHINDA UNION, BATHINDA (APPELLANT) (RESPONDENT) APPELLANT BY: SH. AMRIK CHAND, DR RESPONDENT BY: SH. P.N. ARORA, ADVOCATE DATE OF HEARING: 01.01.2014 DATE OF PRONOUNCEMENT: 03.01.2014 ORDER PER BENCH 1. THE REVENUE HAS FILED THE PRESENT APPEAL AGAINST THE IMPUGNED ORDER DATED 25.07.2012 PASSED BY LEARNED CIT(A), BA THINDA, FOR THE ASSESSMENT YEAR 2008-09 ON THE FOLLOWING GROUNDS: I. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A) HAS ERRED IN DELETING THE PENALTY LEVIED BY THE A.O. U/S 271(1)(C) AT RS. 7,54,726/- WITHOUT APPRECIATING TH AT THE A.O. IN PARA-2 OF THE PENALTY ORDER HAD CLEARLY MENTIONED T HAT NO COMPLETE DETAILS OF PAYMENTS MADE TO PARTIES WERE MAINTAINED AND ONLY TRUCK NUMBERS WERE MENTIONED. 2 I.T.A. NO. 386 (ASR)/2012 ASSESSMENT YEAR: 2008-09 II. THAT THE LEARNED CIT(A) HAS ERRED IN APPRECIATING T HE FACT THAT THE ASSESSEE HAS FAILED TO DISCHARGE THE ONUS THAT THE FAILURE TO FILE THE CORRECT RETURN DID NOT ARISE FROM ANY FRAUD OR GROS S AND WILLFUL NEGLECT ON ITS PART. III. THAT IT IS PRAYED THAT THE ORDER OF LD. CIT(A) BE S ET-ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. IV. THAT THE APPELLANT CRAVES TO ADD OR AMEND ANY GROUN DS OF APPEAL BEFORE THE APPEAL IS HEARD OR DISPOSED OFF. 2. THE FACTS, IN A NUTSHELL, ARE THAT THE ASSESSEE (AOP) DERIVES INCOME FROM PLYING OF TRUCKS AND FILED RETURN OF IN COME ON 09.03.2009 AT RS. 4,28,280/-. THE ASSESSMENT U/S 143(3) WAS COMPL ETED ON 22.10.2009 AT AN INCOME OF RS. 26,25,237/-. THE ADDITION WAS M ADE BY APPLYING NET PROFIT @ 3% ON GROSS RECEIPTS OF RS. 8,65,42,890/- BY INVOKING PROVISIONS OF SECTION 145(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). THE PENALTY PROCEEDINGS UNDER SECTION 271(1) (C) OF THE ACT WERE INITIATED ON ACCOUNT OF FURNISHING OF INACCURATE PA RTICULARS OF INCOME TO THE EXTENT OF RS. 26,25,237/-. CONSEQUENTLY, ASSESS ING OFFICER PASSED ORDER UNDER SECTION 271(1)(C) OF THE ACT ON 23.04.2 010 BY IMPOSING MINIMUM 100% PENALTY AT RS. 7,54,726/- ON ACCOUNT O F FURNISHING OF INACCURATE PARTICULARS OF INCOME. 3. BEING AGGRIEVED WITH THE ORDER DATED 23.04.2010, THE ASSESSEE FILED AN APPEAL BEFORE LEARNED FIRST APPELLATE AUTH ORITY, WHO VIDE 3 I.T.A. NO. 386 (ASR)/2012 ASSESSMENT YEAR: 2008-09 IMPUGNED ORDER DATED 25.07.2012, ALLOWED THE APPEAL OF THE ASSESSEE BY DELETING THE PENALTY IMPOSED BY THE ASSESSING OFFIC ER AT RS. 7,54,726/-. 4. AT THE TIME OF HEARING, LEARNED DR FILED HIS WRI TTEN SUBMISSION AND STATED THAT THE ISSUE IN DISPUTE MAY BE DECIDED ON THE BASIS OF HIS WRITTEN SUBMISSION. FOR THE SAKE OF CONVENIENCE, TH E WRITTEN SUBMISSION IS REPRODUCED AS UNDER: BEFORE THE HON'BLE I.T.A.T. BENCH, AMRITSAR, APPEAL NO. ITA NO. 386/ASR/2012 M/S THE BATHINDA TRUCK OPERATOR UNION BATHINDA. DATE OF HEARING 01/01/2014 WRITTEN SUBMISSIONS 1. IT IS SUBMITTED THAT THE LEARNED CIT(A) HAS GR OSSLY ERRED IN DELETING THE PENALTY U/S 271(1)(C) RELYING UPON JUD GMENTS OF THE HON'BLE SUPREME COURT, HIGH COURT AND THE TRIBUNAL SUPPORTI NG THE PRINCIPLE OF CONSISTENCY. ON PERUSAL OF ASSESSMENT ORDER, IT IS OBSERVED THAT THE A.O. HAD EXPRESSED HIS CLEAR DISSATISFACTION WITH THE CO RRECTNESS AND COMPLETENESS OF THE BOOKS OF ACCOUNT. THOUGH PENALT IES FOR THE ASSESSMENT YEARS 2001-02, 2003-04, 2004-05 AND 2007 -08 WERE DELETED, HOLDING THAT THE ADDITION HAD BEEN MADE ON ESTIMATE BASIS BUT IN THIS CASE THE CARDINAL QUESTION WHICH EMERGES FOR THE CO NSIDERATION OF THE HON'BLE BENCH IS THAT: IF AN ASSESSEE DELIBERATELY MAINTAINS BOOKS OF A CCOUNT IN SUCH A MANNER THAT DOES NOT SATISFY THAT A.O. ABOUT THEIR CORRECTNESS AND COMPLETENESS AND PER FORCE THE A.O. HAS TO RESORT T O ESTIMATION AFTER REJECTING THE BOOKS OF ACCOUNT UNDER SECTION 145(3) , CAN IN SUCH A CASE PENALTY LEVIED UNDER SECTION 271(1)(C) FOR FURNISHI NG INACCURATE PARTICULARS OF INCOME BE DELETED ? 4 I.T.A. NO. 386 (ASR)/2012 ASSESSMENT YEAR: 2008-09 2. THE OBVIOUSLY, ANSWER TO SUCH A QUESTION IS N O AS ANY DECISION TO THE CONTRARY WOULD RESULT IN ENCOURAGIN G THE ASSESSEE TO NOT TO MAINTAIN BOOKS OF ACCOUNT IN A REGULAR MANNER AN D ALSO NOT MAINTAIN NECESSARY BILLS AND VOUCHERS. AN ASSESSEE IN THE IN ITIAL YEARS MAY NOT BE CHARGED OF HAVING FURNISHING INACCURATE PARTICULARS OF INCOME DELIBERATELY BUT IF THE ASSESSEE DELIBERATELY DOES NOT MAINTAIN BOOKS OF ACCOUNT CORRECTLY AND COMPLETELY YEAR AFTER YEAR, I T CLEARLY BETRAYS ITS CONTUMACIOUS CONDUCT AND IT RICHLY DESERVES TO BE P ENALIZED. SINCE THE ASSESSMENT IN THE CASE HAS BECOME FINAL AND THE ASS ESSEE HAS NOT MADE FURTHER APPEAL AGAINST THE ASSESSMENT ORDER, IT CLE ARLY ESTABLISHED THAT THE ASSESSMENT MADE AT RS. 26,25,237/- AGAINST THE RETURNED INCOME OF RS. 4,28,280/- WAS APPARENTLY DUE TO THE ASSESSEE, FURNISHING INACCURATE PARTICULARS OF INCOME WHICH ENFORCE THE A.O. TO EST IMATE AS HE WAS NOT SATISFIED WITH THE CORRECTNESS AND COMPLETENESS OF THE BOOKS OF ACCOUNT MAINTAINED. 3. THE ESTIMATE IN SUCH CIRCUMSTANCES IS LAWFUL A ND LOGICAL AND RIGHTLY LEAD THE A.O. TO LEVY PENALTY FOR DELIBERAT ELY FURNISHING INACCURATE PARTICULARS OF INCOME AND FOR LACK ANY E XPLANATION BY THE ASSESSEE AS TO WHY ITS BOOKS OF ACCOUNT DID NOT SAT ISFY THE A.O. ABOUT THEIR CORRECTNESS COMPLETENESS BUT ONLY RESTED ON T HE DECISION OF THE COURTS THAT CONSISTENCY BE MAINTAINED. IT IS PERTIN ENT TO MENTION THAT THE ASSESSEE IS CONSISTENTLY MAINTAINING BOOKS OF ACCOU NT IN A MANNER WHEREBY INACCURATE PARTICULARS WERE FURNISHING EVER Y YEAR SHOWS THAT IN THE EARLIER YEARS ALSO ITS CONDUCT WAS SO AND IT HA D ERRONEOUSLY BEEN ALLOWED RELIEF ON THE GROUND THAT INCOME HAS BEEN DETERMINED ON ESTIMATE BASIS. FURTHER, IT BECOMES CLEAR THAT THE ASSESSEE HAD MALA FIDE INTENTION IN FURNISHING INACCURATE PARTICULARS OF I NCOME PARTICULARLY IN THE LIGHT OF THE FACT IN THE EARLIER YEARS ALSO IT HAD BEEN ASSESSED AT NET PROFIT RATE OF 3% FOR ALMOST THE SAME REASONS AS OB TAINING IN THE YEAR UNDER CONSIDERATION. AT LEAST DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE OUGHT TO HAVE COME FORWARD WITH TRUE ACCOU NTS AND DECLARING CORRECT INCOME. BUT THE ASSESSEE DID NOT DO SO AND DESERVED TO BE PENALIZED. 4. IN ORDER TO KEEP BAR ON THE ASSESSEE TO MAINTA IN INCORRECT BOOKS OF ACCOUNTS RESULTANTLY SHOWING INACCURATE PA RTICULARS OF INCOME CONSEQUENTLY AVOIDANCE TAX, IT IS FIT CASE FOR THE HON'BLE TRIBUNAL TO 5 I.T.A. NO. 386 (ASR)/2012 ASSESSMENT YEAR: 2008-09 CONFIRM THE PENALTY LEVIED BY THE A.O. THUS, IT IS PRAYED THAT ORDER OF THE LEARNED CIT(A) MAY BE SET ASIDE AND THE A.O. LEVYIN G PENALTY BE UPHELD. YOURS FAITHFULLY, SD/./- (AMRIK CHAND), DCIT(DR), I.T.A.T., ASR 5. ON THE CONTRARY, LEARNED COUNSEL FOR THE ASSESSE E RELIED UPON THE IMPUGNED ORDER PASSED BY THE LEARNED FIRST APPE LLATE AUTHORITY. IN ADDITION TO THIS, HE HAS ALSO FILED A PAPER BOOK CO NTAINING PAGES FROM 1 TO 26, IN WHICH HE HAS ATTACHED THE STATEMENT OF FACTS ; COPY OF WRITTEN SUBMISSIONS FILED BEFORE LEARNED CIT(A), BATHINDA; COPY OF ORDER OF LEARNED CIT(A), BATHINDA, DATED 15.10.2007 IN THE C ASE OF THE ASSESSEE IN CONNECTION WITH A.Y. 2001-02; COPY OF THE ORDER OF LEARNED CIT(A), BATHINDA DATED 27.10.2009 IN THE CASE OF THE ASSESS EE IN CONNECTION WITH A.Y. 2007-08; COPY OF ORDER OF I.T.A.T., AMRITSAR B ENCH, AMRITSAR, IN THE CASE OF SH. ASHOK KUMAR S/O-LATE SHRI GANESH DA SS, JAMMU IN ITA NO. 571 & 572(ASR)/2011 [ASSESSMENT YEAR 2007-08, O RDER DATED 16.08.2012]; AND COPY OF ORDER OF I.T.A.T., AMRITSA R BENCH, AMRITSAR, IN THE CASE OF DCIT VS. PATHANKOT PRIMARY CO-OPERATIVE DEVELOPMENT BANK LTD., PATHANKOT IN I.T.A. NO. 372(ASR)/2010 ORDER D ATED 22.06.2011 RELATING TO ASSESSMENT YEAR 2006-07. 6 I.T.A. NO. 386 (ASR)/2012 ASSESSMENT YEAR: 2008-09 6. AFTER HEARING BOTH THE PARTIES AND PERUSING THE RECORDS AVAILABLE WITH US, ESPECIALLY THE WRITTEN SUBMISSION FILED BY LEARNED DR AND THE DOCUMENTARY EVIDENCE FILED BY LEARNED COUNSEL FOR T HE ASSESSEE, WE ARE OF THE CONSIDERED VIEW THAT LEARNED CIT(A) HAS PASSED ORDER ON THE BASIS OF DECISIONS/JUDGMENTS RENDERED BY THE HON'BLE SUPREME COURT, HON'BLE JURISDICTIONAL HIGH COURT AND TRIBUNAL. FOR THE SA KE OF CONVENIENCE, THE RELEVANT PORTION OF THE FINDINGS GIVEN BY LEARNED C IT(A), BATHINDA, ON THE ISSUE IN DISPUTE, IN THE IMPUGNED ORDER AT PAGE 3 & 4 ARE REPRODUCED AS UNDER: I HAVE GONE THROUGH THE PENALTY ORDER U/S 271(1)(C ) AND THE WRITTEN SUBMISSIONS OF THE A/R OF THE APPELLANT AND I FIND THAT THE ASSESSEE IS A UNION OF TRUCK OPERATORS AT BATHINDA AND THE A.O. W HILE FRAMING ASSESSMENT U/S 143(3) ESTIMATED THE INCOME BY APPLY ING NET PROFIT RATE OF THREE PERCENT ON THE GROSS RECEIPTS OF FREIGHT RECE IVED BY THE ASSESSEE TRANSPORTING THE GOODS OF GOVT. AS WELL AS NON-GOVT . ORGANIZATIONS. I FURTHER FIND THAT FOLLOWING ARE THE UNDISPUTED FACTS WITH REGARD TO THE PENALTY IMPOSED U/S 271(1)(C) IN THE CASE OF THE APPELLANT, BY THE DEPARTMENT FOR PREVIOUS YEARS:- I) THE ORDER IMPOSING PENALTY U/S 271(1)(C) FOR A. Y. 2001-02 WAS QUASHED THE CIT(A), BATHINDA, VIDE ORDER DATED 15.1 0.2007 IN APPEAL NO. 23-IT-CIT(A)/BTI/06-07 AND THE APPEAL OF THE DE PARTMENT WAS DISMISSED BY THE I.T.A.T. AMRITSAR BENCH, AMRITSAR VIDE ORDER DATED 14.03.2008 IN ITA NO. 20(ASR)/2008. THE HON'BLE I.T .A.T. RELIED UPON THE JUDGMENT OF HON'BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. METAL PRODUCTS OF INDIA 150 ITR 714 FOR DELETING THE PENALTY U/S 271(1)(C). THE DEPARTMENT HAS NOT FILED ANY APPEAL AGAINST 7 I.T.A. NO. 386 (ASR)/2012 ASSESSMENT YEAR: 2008-09 THE ABOVE SAID ORDER OF THE I.T.A.T. BEFORE THE PUN JAB & HARYANA HIGH COURT. II) THE ORDERS IMPOSING PENALTY U/S 271(1)(C) FOR A.Y. 2003-04, 04-05 AND 07-08 WERE ALSO QUASHED BY MY PREDECESSORS BUT NO APPEAL WAS FILED BY THE DEPARTMENT BEFORE THE I.T.A.T., AGAINS T THE ABOVE SAID ORDERS. III) THE A.O. WHILE FARMING THE ASSESSMENT FOR A.Y. 2009-10 U/S 143(3) HAS NOT INITIATED THE PENALTY PROCEEDINGS U/S 271(1 )(C). THE A/R OF THE APPELLANT HAS FURTHER RELIED ON TH E JUDGMENTS OF THE SUPREME COURT IN THE CASE OF BERGER PAINTS VS. CIT 266 ITR 99 AND PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. VIKAS CHEMI GUM INDIA 276 ITR 32 FOR HIS CONTENTION THAT PRINCIPLE OF CONSISTENCY AND UNIFORMITY IS REQUIRED TO BE FOLLOWED IN SUCH CASES . I FIND THAT THE ISSUE OF PENALTY U/S 271(1)(C) I N THE CASE OF THE APPELLANT IS COVERED BY THE JUDGMENTS OF HON'BLE SU PREME COURT, PUNJAB & HARYANA HIGH COURT, I.T.A.T., AMRITSAR BENCH, AMR ITSAR DISCUSSED (SUPRA) AND RESPECTFULLY FOLLOWING THE ABOVE SAID J UDGMENTS, THE A.O. IS DIRECTED TO DELETE THE PENALTY OF RS. 7,54,726/- IM POSED U/S 271(1)(C) AND THE APPEAL IS TREATED AS ALLOWED. 7. KEEPING IN VIEW THE AFORESAID FACTS AND CIRCUMST ANCES EXPLAINED ABOVE, WE ARE OF THE CONSIDERED OPINION T HAT THE LEARNED FIRST APPELLATE AUTHORITY HAS DELETED THE PENALTY IN DISP UTE ON THE BASIS OF JUDGMENTS/DECISIONS OF HON'BLE SUPREME COURT, HON'B LE JURISDICTIONAL HIGH COURT AND I.T.A.T. AMRITSAR BENCH, AS MENTIONE D ABOVE. AS SUCH, NO INTERFERENCE IS CALLED FOR IN THE WELL REASONED ORDER PASSED BY LEARNED CIT(A), BATHINDA. ACCORDINGLY, THE APPEAL FILED BY THE REVENUE IS 8 I.T.A. NO. 386 (ASR)/2012 ASSESSMENT YEAR: 2008-09 DISMISSED AND THE IMPUGNED ORDER DATED 25.07.2012 P ASSED BY LEARNED CIT(A), BATHINDA, IS UPHELD. 8. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD JANUARY, 2014 SD/./- SD/./- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 3 RD JANUARY, 2014 /RK/ COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: THE BATHINDA TRUCK OPERATOR UNION, B ATHINDA 2. INCOME TAX OFFICER, WARD-1(1), BATHINDA 3. THE CIT(A), 4. THE CIT, 5. THE SR DR, I.T.A.T., TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.