M/S. NARMADA ROADLINES, V. THE INCOME TAX OFFICER,

ITA 4198/AHD/2003

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0399 (ITAT-AHMEDABAD)
• Duration Of Justice: 6 year(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 26-11-2009
• Assessment Year: 2000-2001
• Appeal Filed On: 25-11-2003
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: M C
• Keywords: Bonafide belief; TDS
• Section: 145; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH C BEFORE SHRI T.K.SHARMA, JUDICIAL MEMBER AND SHRI N.S. SAINI, ACCOUNTANT MEMBER DATE OF HEARING:26.11.09 DRAFTED ON: 30.11.09 ITA NO.4198/AHD/2003 ASSESSMENT YEAR : 2000-2001 M/S. NARMADA ROADLINES 301, ANAND MANGA, B/H. OMKAR HOUSE, C.G.ROAD, NAVRANGPURA, AHMEDABAD, 380009 VS. ITO, WARD-9(4), AHMEDABAD. PAN/GIR NO. : AACFN 5055E (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI SANJAY R. SHAH RESPONDENT BY: SHRI M.C.PANDIT SR. D.R. O R D E R PER N.S.SAINI , ACCOUNTANT MEMBER :- THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST T HE ORDER OF CIT(APPEALS)- XV, AHMEDABAD DATED 12.09.2003 IN APPEAL NO.CIT(A)- XV/WD.9(4)/2006/02- 03. 2. THE SOLE ISSUE INVOLVED IN THE GROUNDS OF APPEAL TAKEN BY THE ASSESSEE IS THAT THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS ) ERRED IN CONFIRMING THE LEVY OF PENALTY OF RS.46,293/- UNDER SECTION 271B O F THE ACT IN THE FACTS AND CIRCUMSTANCES OF THE CASE. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF THE LOWER AUTHORITIES AND THE MATERIALS AVAILABLE ON RECORD., IN THE INSTANT CASE, ACCORDING TO THE LEARNED ASSESSING OFFICER, THE ASSESSEE HAS DIS CLOSED RECEIPTS OF RS.16,10,526/- AND HAS NOT GOT ITS ACCOUNT AUDITED UNDER SECTION 44AB OF THE ACT AND HAS ALSO NOT OBTAINED THE REQUIRED REPORT UNDER THAT SECTION. THE LEARNED ASSESSING OFFICER THEREFORE, CONCLUDED THAT THE ASS ESSEE IS GUILTY OF NOT COMPLYING WITH THE PROVISIONS OF SECTION 44AB OF THE ACT AND IS LIABLE FOR PENALTY UNDER ITA NO .4198/AHD/2003 M/S.NARMADA ROADLINES ASST.YEAR -2000-01 - 2 - SECTION 271B OF THE ACT. THE LEARNED ASSESSING OFFI CER WHILE LEVYING PENALTY CONSIDERED, THE TURNOVER OF THE ASSESSEE AT RS.92,5 8,576/- AND ACCORDINGLY, LEVIED PENALTY OF RS.46,293/-. WE FIND THAT THERE IS NO WO RKING OF RS. 92,58,576/- AVAILABLE IN THE IMPUGNED PENALTY ORDER OR OTHER MA TERIALS AVAILABLE ON RECORD. ON APPEAL, LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CONFIRMED THE ABOVE LEVY OF PENALTY. BEFORE US, THE ASSESSEE FILED COPY OF I TS PROFIT & LOSS ACCOUNT WHICH IS PLACED AT PAGES 4 & 5 OF THE PAPER BOOK AND WHI CH SHOWS THAT THE ASSESSEES TURNOVER WAS RS.32,26,865.54 FROM TRANSPORTING BUSI NESS AND RS.21,184/- FROM LABOUR CHARGES. THUS, AS PER RETURN OF INCOME THE A SSESSEES TOTAL TURNOVER WAS RS.32,48,049.54 ONLY. THE LEARNED DEPARTMENTAL REPR ESENTATIVE HAVE BROUGHT NO MATERIAL ON RECORD TO CONTROVERT THE ABOVE SUBMISSI ON OF THE ASSESSEE. WE FIND THAT THE DISPUTE IS REGARDING TURNOVER OF RS.25,83, 862/- IN RESPECT OF WHICH TDS OF RS.56,805/- WAS DEDUCTED AND CREDIT FOR THE SAME WAS CLAIMED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION THE AND SAID CL AIM WAS ALSO ALLOWED BY THE LEARNED ASSESSING OFFICER. IN REPLY TO PENALTY NOT ICE ISSUED BY THE LEARNED ASSESSING OFFICER, THE ASSESSEE EXPLAINED TO THE LE ARNED ASSESSING OFFICER THAT THIS AMOUNT OF RS.25,83,862/- ON WHICH TDS OF RS.56 ,805/- WAS DEDUCTED BY INDO GULF CORPORATION LIMITED WAS AN ADVANCE AND IN RESP ECT OF WHICH NO WORK WAS DONE BY THE ASSESSEE DURING THE YEAR UNDER CONSIDER ATION AND ALSO NOT BILL WAS RAISED BY IT, AND THEREFORE, THE ASSESSEE BONAFIDEL Y BELIEVED THAT ITS TURNOVER BEING LESS THAN RS.40, LACS DURING THE YEAR AND THEREFORE , HE WAS NOT REQUIRED TO GET ITS ACCOUNTS AUDITED. THE ABOVE EXPLANATION OF THE ASSE SSEE WAS NOT ACCEPTED BY THE LOWER AUTHORITIES ON THE GROUND THAT TDS DEDUCTED O F RS.56,805/- IN RESPECT OF SAID AMOUNT OF RS.25,83,862/- WAS CLAIMED BY THE AS SESSEE IN THE RETURN FILED FOR THE YEAR AND THE SAID CLAIM WAS ALSO ALLOWED BY THE LEARNED ASSESSING OFFICER. IN VIEW OF PROVISIONS OF SECTION 199, CREDIT OF TDS IS ALLOWABLE IN THE YEAR IN WHICH RELEVANT INCOME IS ASSESSABLE AND AS THE CREDIT HAS BEEN ALLOWED IN THE YEAR UNDER CONSIDERATION, THE SAME IS TO BE CONSIDERED AS TURN OVER OF THE YEAR. IN OUR CONSIDERED OPINION, THE ABOVE VIEW OF THE LOWER AUT HORITIES IS CLEARLY IN- DEFENDABLE OR UNSUSTAINABLE IN VIEW OF THE PROVISIO NS OF SECTION 145OF THE ACT. AS PER THE PROVISIONS OF SECTION 145 OF THE ACT THE TU RNOVER IS TO BE DETERMINED AS PER ITA NO .4198/AHD/2003 M/S.NARMADA ROADLINES ASST.YEAR -2000-01 - 3 - THE SYSTEM OF ACCOUNTING REGULARLY FOLLOWED BY THE ASSESSEE EITHER MERCANTILE OR CASH. NOWHERE EITHER SECTION 145 OR ANY OTHER SECTI ON PROVIDES THAT THE RECEIPTS RELATING TO WHICH TDS HAS BEEN CLAIMED BY THE ASSES SEE AND ALLOWED BY THE DEPARTMENT IN A PARTICULAR YEAR WILL BE DEEMED AS T URNOVER OF THAT YEAR. SECTION 199 PROVIDES THAT CREDIT FOR THE TDS IS TO BE ALLOW ED IN THE YEAR IN WHICH RELEVANT INCOME IS ASSESSABLE BUT IT DOES NOT PROVIDE THAT W HEN A CREDIT OF TDS IS ALLOWED IN A PARTICULAR YEAR THEN THE CORRESPONDING AMOUNT OF TURNOVER RELATING TO THAT TDS SHALL BE DEEMED AS TURNOVER OR INCOME ASSESSABL E IN THAT YEAR. FURTHER, NO MATERIAL WAS BROUGHT ON RECORD BY THE REVENUE TO SH OW THAT RS.25,83,862/- IN QUESTION WAS TREATED AS TURNOVER OF THE ASSESSEE OF THE YEAR UNDER CONSIDERATION IN HIS ASSESSMENT AND INCOME RELATING TO THIS TURNOVER WAS ASSESSED IN THE YEAR UNDER APPEAL. NO MATERIAL COULD BE BROUGHT ON RECORD BY T HE REVENUE TO SHOW THAT THE SERVICES OR WORK IN RESPECT OF THE AFORESAID AMOUNT OF RS.25,83,862/- WAS RENDERED OR DONE BY THE ASSESSEE DURING THE YEAR UN DER CONSIDERATION. IN THE ABOVE CIRCUMSTANCES, IN OUR CONSIDERED OPINION, THE ASSES SEE WAS UNDER A BONAFIDE BELIEF THAT ITS TURNOVER OF THE YEAR BEING LESS THAN RS.40 LACS, HE WAS NOT LEGALLY REQUIRED TO GET ITS ACCOUNTS AUDITED UNDER THE PROVISIONS OF SECTION 44AB OF THE ACT. NO MATERIAL COULD BE BROUGHT ON RECORD BY THE REVENUE TO SHOW THAT THE ABOVE BELIEF OF THE ASSESSEE WAS DUE TO ANY MALAFIDE INTENTION O R ANY DISHONEST CONDUCT ON THE PART OF THE ASSESSEE. IN THE CIRCUMSTANCES, IN OUR CONSIDERED VIEW, THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) WAS NOT JUSTIFI ED IN CONFIRMING PENALTY OF RS.46,293/- LEVIED BY THE LEARNED ASSESSING OFFICER UNDER SECTION 271B OF THE ACT. WE ACCORDINGLY, CANCEL THE IMPUGNED PENALTY OR DER AND ALLOW THE APPEAL OF THE ASSESSEE. 4. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER SIGNED, DATED AND PRONOUNCED IN THE COURT ON 30/11/2009. SD/- SD/- ( T.K. SHARMA ) ( N.S. SAINI ) JUDICIAL MEMBER A CCOUNTANT MEMBER AHMEDABAD; DATED 30.11.2009 PREPARED AND COMPARED BY : PARAS # ITA NO .4198/AHD/2003 M/S.NARMADA ROADLINES ASST.YEAR -2000-01 - 4 - COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT(APPEALS)-XV, AHMEDABAD. 5. THE DR, AHMEDABAD BENCH 6. THE GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT.REGISTRAR), ITAT, AHMEDABAD