Sh. Mohd.Akhtar, Saharanpur V. ITO, Saharanpur

ITA 4066/DEL/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 58902 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-03-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 22-03-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 07-09-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R S NEGI
• Section: 144

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : E : NEW DELHI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI K.G. BANSAL, ACCOUNTANT MEMBER ITA NO.4066/DEL/2011 ASSESSMENT YEAR : 2007-08 MOHD. AKHTAR, S/O SHRI ABDUL MAJID, VILLAGE DHABAD, P.O. RAJPUR, TEHSIL BEHAT, SAHARANPUR. PAN : AGGPA8709C VS. ITO, WARD-1, SAHARANPUR. (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI R.S. NEGI, SR.DR ORDER PER I.P. BANSAL, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE. IT IS DIRECTED AGAINST THE ORDER DATED 29 TH JUNE, 2011 PASSED BY THE CIT(A) FOR ASSESSMENT YEAR 2007-08. THE GROUNDS OF APPEAL READ AS UNDER:- 1. THAT THE NOTICE ISSUED U/S 271 (1)(C) AND ORDER IM POSING PENALTY OF RS.55,500/- UNDER SAID SECTION ARE ILLEGAL , BAD IN LAW AND WITHOUT JURISDICTION. 2. THAT IN VIEW OF THE FACTS AND CIRCUMSTANCES OF THE CA SE, THE CIT (A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDIN G THE PENALTY OF RS.55,500/- IMPOSED U/S 271(1)(C). 3. THAT THE PENALTY HAS BEEN LEVIED WITHOUT ANY SPECIFIC CHARGE HENCE THE SAME IS ILLEGAL, BAD IN LAW & SAME IS LIABLE TO BE SET ASIDE. 4. THAT THE CIT (A) HAS FAILED TO APPRECIATE THAT THE ASSESSMENT WAS COMPLETED U/S 144/143(3) BY THE A.O. ITA NO.4066/DEL/2011 2 AFTER COMPUTING THE PROFIT ON THE ESTIMATED BASIS @ 8%, ON ESTIMATE BASIS AND NO PENALTY CAN BE LEVIED U/S 271(1)(C) WHERE THE INCOME IS ASSESSED ON ESTIMATE BASIS. 5. THE CIT (A)HAS ERRED ON FACTS AND IN LAW IN UPHOL DING THE PENALTY U/S 271(1)(C) WHERE THE INCOME IS BEING COMPUTED ON THE ESTIMATED BASIS. 6. THE CIT (A) ERRED IN UPHOLDING THE PENALTY ON THE TH AT THE ASSESSEE HAS NOT BEEN MAINTAINING PROPER BOOKS/AUDIT BOOKS OF ACCOUNT WHEN THE PENALTY U/S 271B ALREADY BEING LEVIED. 7. THAT IN ANY CASE THE PENALTY IMPOSED IS UNJUST, ARBITRAR Y AND HIGHLY EXCESSIVE. 2. THE ASSESSEE IS A CIVIL CONTRACTOR AND HAD DECLARED H IS INCOME AT ` 3,45,810/- IN THE RETURN OF INCOME FILED ON 30 TH SEPTEMBER, 2007. IT WAS FOUND BY THE ASSESSING OFFICER THAT TURNOVER OF THE ASSESSEE WAS ` 65,86,835/- AND THE ASSESSEE DID NOT ENCLOSE BALANCE SHEE T, CAPITAL ACCOUNT, ETC. WITH THE RETURN OF INCOME. THE ASSESSING OFFICER IMPOSED PENALTY U/S 271B OF THE ACT AND ALSO ISSUED VARIOUS STATU TORY NOTICES. HOWEVER, NO COMPLIANCE WAS MADE AT THE STAGE OF ASSESSING OFFICER. THE ASSESSING OFFICER ISSUED NOTICE U/S 144 AND IN THE ABSE NCE OF REQUISITE DETAILS AND EVIDENCES AND ALSO NON-AUDIT OF B OOKS OF ACCOUNT, THE NET PROFIT WAS COMPUTED AT 8% OF THE TURNOVER AN D, IN THIS MANNER, THE INCOME OF THE ASSESSEE WAS WORKED OUT AT ` 5,26,947/ - AGAINST THE RETURNED INCOME OF ` 3,45,808/-. THE DIFFERENCE IN THE RETURNED INCOME AND ASSESSED INCOME WAS CONSIDERED TO BE CONCEALED INCOME ON WHICH THE IMPUGNED PENALTY OF ` 55,500/- HAS BEEN IMPOSED. DURING THE COURSE OF PENALTY PROCEEDINGS, IT WAS SUBMITTED BY THE ASSESSEE THAT THE ASSESSEE IS AN UNEDUCATED MAN AND COULD NOT PROPERLY FOLLOW UP THE ASSESSMENT PROCEEDINGS. DUE TO HIS IGNORANCE AND NON - COOPERATIVE ATTITUDE OF HIS CHARTERED ACCOUNTANT HE WAS FINALLY ASSESSED @ 8% OF THE GROSS RECEIPTS. IT WAS SUBMITTED THAT THE TURNOVER OF THE ASSESSEE WAS SPLIT INTO THREE FOLLOWING I TEMS:- ITA NO.4066/DEL/2011 3 SR. NO. TYPE OF WORK AMOUNT 1. LABOUR PAYMENTS 46,56,315.00 2. MATERIAL (BOULDERS) AS GIVEN BY DEPARTMENT 11,84,399.00 3. BOULDERS SUPPLIES 7,26,121.00 4. TOTAL GROSS RECEIPTS 65,86,835.00 3. ALL THE COPIES SUPPORTING THE AFOREMENTIONED CONTE NTION WERE ALSO FILED AND IT WAS SUBMITTED THAT APPLICATION OF 8% WAS COMPREHENSIVE AND MAXIMUM RATE AS PRESCRIBED BY CBDT. THE RETURN WAS FILED VOLUNTARILY DISCLOSING ALL THE MATERIAL FACT S I.E., THE TURNOVER AS WELL AS TDS DEDUCTED AND EXPENSES MADE, THEREFORE, T HERE IS NO CONCEALMENT ON THE PART OF THE ASSESSEE. THE ASSESSING OFF ICER DID NOT ACCEPT SUCH SUBMISSIONS OF THE ASSESSEE AND HAS LEVIED TH E PENALTY. LEARNED CIT (A) HAS ALSO CONFIRMED THE PENA LTY LEVIED BY THE ASSESSING OFFICER. THE ASSESSEE HAS FILED FURTHER APPEAL. 4. THE NOTICE OF HEARING WAS SENT TO THE ASSESSEE, HOWEVE R, NONE WAS PRESENT ON BEHALF OF THE ASSESSEE ON THE DATE OF HEAR ING. AS THE PRESENT APPEAL IS A SMALL APPEAL, WE DISPOSE IT OF AFTER HEARING THE LEARNED DR. 5. THE LEARNED DR, RELYING UPON THE ASSESSMENT ORDER AS WELL AS THE ORDER PASSED BY THE CIT (A), SUBMITTED THAT THE PE NALTY HAS RIGHTLY BEEN CONFIRMED BY THE CIT (A) AND HIS ORDER SHOULD BE UPHELD. 6. WE HAVE CAREFULLY CONSIDERED THE SUBMISSIONS OF THE L EARNED DR. WE HAVE ALSO CAREFULLY GONE THROUGH THE ASSESSMENT ORDER , PENALTY ORDER AND THE ORDER OF THE CIT (A). WE FIND THAT I T IS NOT A CASE WHERE LEVY OF PENALTY CAN BE HELD JUSTIFIED. THE ASSESSEE IS A SMALL CONTRACTOR AND HIS RECEIPTS MAINLY ARE FROM LABOUR PA YMENTS ON WHICH THE NET PROFIT IS LOW. THEREFORE, IT CANNOT BE CONC LUSIVELY SAID THAT THE ASSESSEE ACTUALLY HAD EARNED 8% NET PROFIT OUT OF HIS RE CEIPTS. ITA NO.4066/DEL/2011 4 KEEPING IN VIEW THE ENTIRETY OF THESE FACTS AND ALSO T HE FACT THAT THE ASSESSEES INCOME HAS BEEN ESTIMATED @ 8%, WHICH IS THE HIG HEST NET PROFIT RATE IN THE CASES OF SMALL CONTRACTORS, WE CONSID ER IT JUST AND PROPER THAT NO PENALTY SHOULD BE LEVIED UPON THE ASSESSE E. THEREFORE, THE PENALTY LEVIED UPON THE ASSESSEE IS DELETED THE AND THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALL OWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 22.03.20 12. SD/- SD/- [K.G. BANSAL] [I.P. BANSAL] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 22.03.2012. DK COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT DEPUTY REGISTRAR, ITAT, DELHI BENCHES