JITENDRA H SHAH, MUMBAI V. ITO 14(1)(1), MUMBAI

ITA 3930/MUM/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8643 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: I
• Next Hearing Date: 04-10-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 14-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K MEHTA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH I, MUMBAI BEFORE SHRI P.M.JAGTAP, ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA, JUDICIAL MEMBER.. I.T.A. NO.3930/MUM/2010. ASSESSMENT YEAR : 2006-07. SHRI JITENDRA H. SHAH, THE INCOME-TAX OFFICER, 24, SHAM SETH STREET, VS. 14(1)(1), CHIPPI CHAWL, MUMBAI. MUMBAI 400002., PAN AAJP8626H APPELLANT. RESPONDENT . APPELLA NT BY : NONE.. RESPONDE NT BY : SMT. N.K.MEHTA. DATE OF HEARING : 04-10-2012 DATE OF PRONOUNCEMENT : 10-10-2012. O R D E R PER P.M. JAGTAP, A.M. : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE ORDER OF LEARNED CIT(APPEALS)-25, MUMBAI DATED 26-02-2010 WHEREIN HE CONFIRMED THE PENALTY OF RS.40,900/- IMPOSED BY THE AO U/S 271B. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L WHO IS ENGAGED IN THE BUSINESS OF SHARE TRADING AND DEALING IN ANTIQUES THE RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION WAS FILED BY IT ON 12-03-2 007 DECLARING A TOTAL INCOME OF RS.66,970/-. VIDE AN ORDER DATED 30-12-2008, ASSESS MENT WAS MADE BY THE AO U/S 143(3) ON THE SAME INCOME AS DECLARED BY THE ASSESS EE. DURING THE COURSE OF 2 ITA NO.3930/MUM/2010 ASSESSMENT PROCEEDINGS, HE, HOWEVER, FOUND THAT THE TOTAL TURNOVER OF THE ASSESSEE COMPANY WAS IN EXCESS OF RS.40 LAKHS AND THE AUDIT REPORT AS REQUIRED U/S 44AB OF THE ACT FILED BY THE ASSESSEE ALONG WITH THE RETURN OF INCOME WAS DATED 11-03- 2007. AS THE ASSESSEE WAS REQUIRED TO GET HIS ACCOU NTS AUDITED AND FILE THE REPORT OF SUCH AUDIT AS PER SECTION 44AB ON OR BEFORE 31-10- 2006, THE AO ISSUED A NOTICE REQUIRING THE ASSESSEE TO SHOW CAUSE AS TO WHY PENA LTY U/S 271B SHOULD NOT BE IMPOSED FOR HIS FAILURE TO COMPLY WITH THE REQUIREM ENTS OF SECTION 44AB. SINCE THERE WAS NO RESPONSE FROM THE ASSESSEE TO THE SAID NOTICE AS WELL AS SUBSEQUENT NOTICES ISSUED BY THE AO, THE LATTER PROCEEDED TO I MPOSE PENALTY OF RS.40,900/- U/S 271B BEING % OF THE TOTAL TURNOVER AMOUNTING TO R S.81,80,102/-. 3. THE PENALTY IMPOSED BY THE AO U/S 271B WAS CHALL ENGED BY THE ASSESSEE IN AN APPEAL FILED BEFORE THE LEARNED CIT(APPEALS). DU RING THE COURSE OF APPELLATE PROCEEDINGS BEFORE THE LEARNED CIT(APPEALS), WRITTE N SUBMISSION WAS FILED BY THE ASSESSEE POINTING OUT THAT THE YEAR UNDER CONSIDERA TION WAS THE FIRST YEAR WHEN HIS TURNOVER EXCEEDED RS.40 LAKHS AND HE BECAME LIABLE TO TAX AUDIT FOR THE FIRST TIME. IT WAS SUBMITTED THAT THE ASSESSEE INITIALLY WAS NO T AWARE OF THIS REQUIREMENT AND IMMEDIATELY AFTER BECOMING AWARE OF THE SAME, HE AP PROACHED THE CHARTERED ACCOUNTANT, GOT HIS ACCOUNTS AUDITED, OBTAINED THE REPORT DATED 11-03-2007 AND FILED THE SAME ALONG WITH THE RETURN OF INCOME ON 1 2-03-2007. IT WAS SUBMITTED THAT THE SAID AUDIT REPORT FILED BY THE ASSESSEE WA S AVAILABLE TO THE AO WELL IN ADVANCE BEFORE THE ASSESSMENT U/S 143(3) WAS COMPLE TED ON 30-12-2008 AND, THEREFORE, THE PURPOSE ENVISAGED IN INTRODUCING SEC TION 44AB WAS DULY SERVED IN THE CASE OF THE ASSESSEE. IT WAS CONTENDED THAT THE ASSESSEES CASE THUS IS NOT A FIT CASE TO IMPOSE PENALTY U/S 271B AND THE PENALTY SO IMPOSED BY THE AO BE CANCELLED. THE LEARNED CIT(APPEALS) DID NOT FIND ME RIT IN THIS CONTENTION OF THE ASSESSEE AND HOLDING THAT THERE WAS NO SUFFICIENT C AUSE PLEADED BY THE ASSESSEE FOR 3 ITA NO.3930/MUM/2010 HIS FAILURE TO COMPLY WITH THE REQUIREMENTS OF SECT ION 44AB, HE PROCEEDED TO CONFIRM THE PENALTY IMPOSED BY THE AO U/S 271B. AGG RIEVED BY THE ORDER OF THE LEARNED CIT(APPEALS), THE ASSESSEE HAS PREFERRED TH IS APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING BEFORE US, NOBODY HAS APP EARED ON BEHALF OF THE ASSESSEE. THIS APPEAL OF THE ASSESSEE IS, THEREFORE , BEING DISPOSED OF EXPARTE AFTER CONSIDERING THE ARGUMENTS OF THE LEARNED DR AND PER USING THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT THE YEAR UNDER CONSID ERATION IS THE FIRST YEAR IN WHICH THE TURNOVER OF THE ASSESSEE EXCEEDED RS.40 LAKHS A ND HE BECAME LIABLE TO GET HIS ACCOUNTS AUDITED AS PER THE PROVISIONS OF SECTION 4 4AB. AS SUBMITTED BY THE ASSESSEE BEFORE THE LEARNED CIT(APPEALS), HE INITIA LLY WAS NOT AWARE OF THE SAID REQUIREMENT AND IMMEDIATELY AFTER BECOMING AWARE OF THE SAME, HE NOT ONLY GOT HIS ACCOUNTS AUDITED BUT ALSO FILED THE REPORT OF S UCH AUDIT ALONG WITH THE RETURN OF INCOME ON 12-03-2007. IT IS WORTHWHILE TO NOTE HERE THAT THE ASSESSMENT U/S 143(3) FOR THE YEAR UNDER CONSIDERATION WAS COMPLETED BY T HE AO ON 30-12-2008 AND THUS THE AUDIT REPORT FILED BY THE ASSESSEE ON 12-03-200 7 WAS AVAILABLE TO THE AO WELL IN ADVANCE FOR THE PURPOSE OF MAKING THE SAID ASSES SMENT. AS RIGHTLY CONTENDED ON BEHALF OF THE ASSESSEE BEFORE THE LEARNED CIT(APPEA LS), THERE WAS THUS SUBSTANTIAL COMPLIANCE OF THE REQUIREMENTS OF SECTION 44AB BY T HE ASSESSEE AND THIS BEING SO, IMPOSITION OF PENALTY U/S 271B, IN OUR OPINION, WAS NOT JUSTIFIED. AS SUCH, KEEPING IN VIEW ALL THE FACTS OF THE CASE, WE ARE OF THE VI EW THAT IT IS NOT A FIT CASE TO IMPOSE PENALTY U/S 271B AND CANCELLING THE PENALTY IMPOSED BY THE AO AND CONFIRMED BY THE LEARNED CIT(APPEALS), WE ALLOW THIS APPEAL OF T HE ASSESSEE. 4 ITA NO.3930/MUM/2010 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED ON THIS 10 TH DAY OF OCT. , 2012. SD/- SD/- (AMIT SHUKLA) (P.M. JAGTAP) JUDICIAL MEMBER ACCO UNTANT MEMBER MUMBAI, DATED: 10 TH OCT., 2012. COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, I-BENCH. (TRUE COPY) BY ORD ER ASSTT. REGI STRAR, ITAT, MUMBAI BENCHES, MUMBAI. WAKODE.