M/s Mukherjee Enterprise, Kolkata V. I.T.O Wd - 33(3),kolkata, Kolkata

ITA 401/KOL/2013

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3375 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 10 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 27-02-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK VERMA JCITSRDR
• Assessee Lawyers: GOURI PRASAD SEN
• Keywords: Reasonable cause
• Section: 273B; 143(3); 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA NO. 401 / KOL / 2013 ASSESSMENT YEAR :2004-05 M/S MUKHERJEE ENTERPRISE, 63/4, HARISH CHATTERJEE STREET, KOLKTA-700 025 [ PAN NO.AAFFM 1374 C ] V/S . INCOME TAX OFFICER, WARD-33(3), 10B, MIDDLETON ROW, KOLKATA - 700071 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI GOURI PRASAD SEN, ADVOCATE /BY RESPONDENT SHRI VIVEK VERMA, JCIT, SR-DR /DATE OF HEARING 15-12-2015 /DATE OF PRONOUNCEMENT 20- 01-2016 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER:- THIS APPEAL BY THE ASSESSEE IS ARISING OUT OF ORDE R OF COMMISSIONER OF INCOME TAX (APPEALS)-XIX, KOLKATA IN APPEAL NO.28/C IT(A)-XIX/WD- 33(3)/KOL/12-13 DATED 14.01.2013. ASSESSMENT WAS FR AMED BY ITO WARD- 33(3), KOLKATA U/S 143(3)/145(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 29.1 2.2006 FOR ASSESSMENT YEAR 2004-05. PENALTY IMPOSED BY ASSESSING OFFICER U/S 2 71A OF THE ACT VIDE ORDER DATED 08.04.2010. 2. ISSUE RAISED BY ASSESSEE IN THIS APPEAL IS THAT LD. CIT(A) ERRED IN CONFIRMING THE PENALTY IMPOSED BY ASSESSING OFFICER U/S 271A OF THE ACT FOR FAILURE TO PRODUCE THE BOOKS OF ACCOUNT. THE RELEVA NT FACTS OF THE PRESENT CASE ARE THAT ASSESSEE IS A PARTNERSHIP FIRM AND IS ACTI NG AS GOVERNMENT CONTRACTOR ITA NO.401/KOL/2013 A.Y. 2004-05 M/S MUKHERJEE ENTERPRISE V. ITO, WD.33-(3) KOL. PAGE 2 AND ASSESSMENT FRAMED U/S 143(3) OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS ASSESSEE FAILED TO PRODUCE I TS BOOKS OF ACCOUNT AT THE TIME OF VERIFICATION AS DESIRED BY AO. DUE TO N ON-PRODUCTION OF ITS BOOKS OF ACCOUNT AO INITIATED PENALTY PROCEEDING U/S 271A OF THE ACT AND ISSUED NOTICE U/S. 274 OF THE ACT AS TO WHY LEVY OF PENALTY SHOUL D NOT BE IMPOSED FOR NON- PRODUCTION OF BOOKS OF ACCOUNT. DURING ASSESSMENT P ROCEEDINGS, AO ISSUED NOTICES UPON ASSESSEE BUT THE ASSESSEE DID NOT COMP LY. FINALLY, AO IMPOSED PENALTY U/S 271A OF THE ACT. 3. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE LD. CIT(A) WHO CONFIRMED THE ACTION OF AO BY OBSERVING AS UNDER:- 13. THE SUBMISSION OF THE AR IS GIVEN DUE CONSIDER ATION AND I AM UNABLE TO EXCEPT THE AR LINE OF SUBMISSION THAT THE BOOKS OF ACCOUNT LOST IN AY 95-96 MAY BE THE REASON FOR NON-PRODUCTION OF BOOKS OF AC COUNT FOR ASSESSMENT YEAR 2004-05 WHICH IS UNDER CONSIDERATION. ON THE C ONTRARY BEFORE AO THE AR HAS TAKEN PLEA THAT ACCOUNTANT WAS NOT WELL. HOWEVE R, THIS ALSO REMAINED UNSUBSTANTIATED. 14. ON PERUSAL OF THESE DETAILS I DO NOT FIND THAT THE APPELLANT WAS ABLE TO ESTABLISH THE EXISTENCE OF ANY REASONABLE CAUSE FOR NON-PRODUCTION OF BOOKS OF ACCOUNT. IN VIEW OF ABOVE SATED FACTS THE PENALT Y IMPOSED U/S. 271A OF RS.25,000/- IS UPHELD ON MERIT. THE AR ALL THE OTHE R GROUNDS ARE LINKED WITH IMPOSITION OF SUCH PENALTY WHICH IS INITIATED AS PE R LAW AND THEREFORE I DO NOT FIND ANY INFIRMITY IN THE PENALTY ORDER IMPOSED U/S . 271A. 4. BEING AGGRIEVED BY THIS ORDER OF LD. CIT(A) ASS ESSEE PREFERRED SECOND APPEAL BEFORE US ON THE FOLLOWING GROUND OF ITS APP EAL:- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-XIX, KOLKATA G ROSSLY ERRED IN LAW IN REJECTING ASSESSEE/APPELLANTS EXPLANATION IN THE M ATTER OF EXISTENCE OF REASONABLE CAUSE FOR INABILITY TO PRODUCE BOOKS OF ACCOUNTS. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE BOTH THE ASSESSING OFFICER AND THE CIT(APPEALS) GROSSLY ERRED IN NOT ACCEPTI NG ASSESSEES EXPLANATION REGARDING DISPUTE AMONG THE PARTNERS WHICH LED TO N ON-AVAILABILITY OF BOOKS OF ACCOUNT FOR PRODUCTION. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, WHILE ACCEPTING THE TAX AUDIT REPORT IN MATTER OF TURNOVER, TDS AND MAINTEN ANCE OF BOOKS OF ACCOUNT AS ACCOMPANYING THE RETURN (EXCEPTING ENHAN CING RATE OF NET PROFIT ON ESTIMATE; THE LEARNED CIT(A) WAS NOT JUSTIFIED I N LAW IN UPHOLDING THE ORDER ITA NO.401/KOL/2013 A.Y. 2004-05 M/S MUKHERJEE ENTERPRISE V. ITO, WD.33-(3) KOL. PAGE 3 U/S 271A REJECTING APPS EXPLANATION FOR FAILURE TO PRODUCE THE BOOKS OF ACCOUNT. 5. SHRI GAURI PRASAD SEN, LD. AUTHORIZED REPRESENT ATIVE APPEARING ON BEHALF OF ASSESSEE AND SHRI VIVEK VERMA, LD. DEPARTMENTAL REPRESENTATIVE APPEARING ON BEHALF OF REVENUE. 6. WE HAVE HEARD RIVAL CONTENTIONS OF BOTH THE PART IES AND PERUSED THE MATERIALS AVAILABLE ON RECORD. LD. AR SUBMITTED PAP ER BOOK WHICH IS RUNNING FROM PAGES 1 TO 7 AND DREW OUR ATTENTION AT PAGE 4 OF THE PAPER BOOK, WHEREIN THE COMPLAINT WAS FILED TO POLICE STATION FOR LOSS OF SUCH DOCUMENTS, SAME IS REPRODUCED BELOW:- MUKHERJEE ENGINEER CONSTRUCTOR CONSULTANT & DESIG NER ENTERPRISE, 63/4, HARISH CHATTERJEE STREET, CALCUTT A 700025 PHONE : [phone] REF. DATE 9.3.2004 TO THE OFFICER-IN-CHARGE RECEI VED AT 3,30 HRS. KALIGHAT POLICE STATION M.L.G HOSH, ON 09.03.04 KOLKATA 700 026 KALI GHAT POLICE STATION SIR, CALCUTTA-28 THIS IS TO INFORM YOU THAT IN THE MONTH OF JULY, 2 002 THERE WAS SOME DISPUTE IN THE CONSTITUTION OF OUR BUSINESS. AFTER THAT WE DISCOVERED THAT FEW DOCUMENTS ARE NOT AVAILABLE IN OUR OFFICE. THIS IS FOR YOUR INFORMATION AND RECORD PLEASE. THANKING YOU, YOURS FAITHFULLY, F OR MUKHERJEE ENTERPRISE SD/- RANJAN MUKHERJEE PARTNER 7. ON THE CONTRARY, LD. DR VEHEMENTLY RELIED ON TH E ORDERS OF AUTHORITIES BELOW. 8. FROM THE AFORESAID DISCUSSION, WE FIND THAT PEN ALTY IMPOSED BY AO ON ACCOUNT OF NON-PRODUCTION OF THE BOOKS OF ACCOUNT O F ASSESSEE AND IT WAS ALSO CONFIRMED BY THE LD. CIT(A). THE LD. AR SUBMITTED T HAT THE BOOKS OF ACCOUNTS WERE LOST THEREFORE THE SAME WERE NOT PRODUCED BEFO RE THE AO. WE FIND THAT ITA NO.401/KOL/2013 A.Y. 2004-05 M/S MUKHERJEE ENTERPRISE V. ITO, WD.33-(3) KOL. PAGE 4 THE REASON MENTIONED BY THE LD. AR FOR NOT PRODUCIN G THE BOOKS OF ACCOUNTS HOLDS MERIT. THEREFORE WE DEEM IT PROPER TO DELETE THE PENALTY IMPOSED BY THE AO IN TERMS OF THE PROVISIONS OF SECTION 273B OF TH E ACT WHICH READS AS UNDER: 273B . NOTWITHSTANDING ANYTHING CONTAINED IN THE PROVISI ONS OF [CLAUSE (B) OF SECTION 271B [SECTION 271BA], [SECTION 271BB ] SECTION 271C, [SECTION 271CA,] SECTION 271D, SECTION 271E, [SECTI ON 271F, [SECTION 271FA,] [SECTION 271FAB,] [SECTION 271FB,] [SECTION 271G]] [SECTION 271GA,] [SECTION 271H,] [SECTION 271-I,] CLAUSE (C) OR CLAUSE (D) OF SUB- SECTION (1) OR SUB-SECTION (2) OF SECTION 272 (A), SUB-SECTION (1) OF SECTION 372AA] OR [SECTION 272B OR] [SUB-SECTION (1 ) [OR SUB-SECTION (1A)] OF SECTION 272BB OR] [SUB-SECTION (1) OF SECT ION 272BBB OR] CLAUSE (B) OF SUB-SECTION (1) OR CLAUSE (B) OR CLAUSE (C) OF SUB-SECTION (2) OF SECTION 273, NO PENALTY SHALL BE IMPOSABLE ON THE P ERSON OR THE ASSESSEE, AS THE CASE MAY BE, FOR ANY FAILURE REFER RED TO IN THE SAID PROVISIONS IF HE PROVES THAT THERE WAS REASONABLE C AUSE FOR THE SAID FAILURE.] 9. ON PERUSAL OF ABOVE SECTION 273B OF THE ACT WE FIND THAT PENALTY SHALL NOT IMPOSED IF THERE WAS REASONABLE CAUSE FOR FAILURE O N THE PART OF ASSESSEE. IN THE CASE IN HAND THE PLEA OF THE ASSESSEE THAT THE BOOKS OF ACCOUNTS HAVE LOST WHICH IS DULY SUPPORTED WITH THE POLICE COMPLAINT A PPEARS A REASONABLE REASON. THEREFORE IN OUR CONSIDERED VIEW, WE DEEM I T FIT TO GRANT IMMUNITY FROM THE PENALTY IMPOSED BY ASSESSING OFFICER AND S UBSEQUENTLY CONFIRMED BY LD. CIT(A). HENCE, CONSIDERING THE FACTS AND TOT ALITY OF CASE, WE REVERSE THE ORDERS OF AUTHORITIES BELOW AND DELETE THE PENA LTY IMPOSED BY AO ACCORDINGLY. 10. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 20/ 01/2016 SD/- SD/- (N.V.VASUDEVAN) (WASEEM AHMED) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) KOLKATA, *DKP !- 20 / 0 1/201 6 ITA NO.401/KOL/2013 A.Y. 2004-05 M/S MUKHERJEE ENTERPRISE V. ITO, WD.33-(3) KOL. PAGE 5 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-M/S MUKHERJEE ENTERPRISE, 63/4 HARISH CH ATTERJEE ST, KOL-25 2. /RESPONDENT-ITO WARD-33(3), MIDDLETON ROW, KOLKATA- 71 3. ) *+ , , - / CONCERNED CIT KOLKATA 4. , , -- / CIT (A) KOLKATA 5. 012 33*+, , *+ , / DR, ITAT, KOLKATA 6. 267 89 / GUARD FILE. BY ORDER/ , , /TRUE COPY/ / , *+ ,