Sh. Irshad, Ghaziabad V. ITO, Ghaziabad

ITA 4221/DEL/2015

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 0698 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 2 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2009-2010
• Appeal Filed On: 29-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUBHASH VERMA SENIOR
• Assessee Lawyers: NAINA JAIN S
• Keywords: Opportunity of being heard; Bonafide belief

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH C : NEW DELHI) BEFORE SHRI N.K. SAINI, ACCOUNTANT MEMBER AND SHRI KULDIP SINGH, JUDICIAL MEMBER ITA NO.4221/DEL./2015 (ASSESSMENT YEAR : 2009-10) ITA NO.4222/DEL./2015 (ASSESSMENT YEAR : 2009-10) SHRI IRSHAD, VS. ITO, WARD 1 (3), H.NO.62, QASSABAN, GHAZIABAD. DASNA GATE, GHAZIABAD. (PAN : AANPI4503M) ITA NO.4223/DEL./2015 (ASSESSMENT YEAR : 2009-10) ITA NO.4224/DEL./2015 (ASSESSMENT YEAR : 2009-10) SHRI IMRAN, VS. ITO, WARD 1 (3), C/O M/S. N. BHUSHAN & CO., CAS GHAZIABAD. C-12/114, FIRST FLOOR, D.B. PLAZA, R.D.C., RAJ NAGAR, GHAZIABAD 201 002 (U.P.). (PAN : AASPI9611B) (APPELLANT) (RESPONDENT) ASSESSEE BY : MS. SAUBHAGYA AGARWAL, SHRI SAURABH GUPTA & MS. NAINA JAIN, ADVOCATES REVENUE BY : SHRI SUBHASH VERMA, SENIOR DR DATE OF HEARING : 13.09.2018 DATE OF ORDER : 17.09.2018 ITA NOS.4221 & 4222/DEL./2015 ITA NOS.4223 & 4224/DEL./2015 2 O R D E R PER BENCH : SINCE COMMON QUESTIONS OF FACTS AND LAW HAVE BEEN R AISED IN ALL THE AFORESAID APPEALS, THE SAME ARE BEING DI SPOSED OFF BY WAY OF CONSOLIDATED ORDER TO AVOID REPETITION OF DISCUS SION. 2. THE APPELLANT, SHRI IRSHAD (HEREINAFTER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESENT APPEALS, SOUGHT T O SET ASIDE THE IMPUGNED ORDER DATED 09.03.2015 PASSED BY LD. CIT (APPEALS), MUZAFFARNAGAR QUA THE ASSESSMENT YEAR 2009-10 ON TH E GROUNDS INTER ALIA THAT:- ITA NO.4221/DEL/2015 1. THAT THE LEARNED CIT (APPEALS) HAS ERRED THE LAW AND ON FACTS IN CONFIRMING THE ACTION OF THE LEARNE D AO FOR IMPOSING THE PENALTY. 2. THAT HAVING REGARDS TO THE FACT AND CIRCUMSTANCE S OF THE CASE, LEARNED CIT (APPEALS) HAS ERRED IN JUSTIF YING THE PENALTY OF RS.25000/- U/S 271A AS LAW DOES NOT PRES CRIBED THE SPECIFIC BOOKS OF ACCOUNTS WHICH WERE REQUIRED TO BE MAINTAINED. . 3. THAT THE APPELLANT HAS A BONAFIDE BELIEF, THAT T HERE IS NO REQUIREMENT FOR MAINTAINING THE BOOKS OF ACCOUNT S. THE LD. AO WAS IN POSITION TO CALCULATE THE PROFIT OF T HE ASSESSEE ON THE BASIS OF THE DOCUMENTS / OTHER PAPERS. 4. THE LD. CIT(A) HAVE WRONGLY SUPPORT THE VIEWS TA KEN BY THE LD. AO IN RESPECT OF FLAT RATE OF PROFIT ON SALE WITHOUT RAISING THE QUESTION OF BOOKS OF ACCOUNTS AND WITHO UT ANY RESERVATION ON HIS PART AS REGARD THE ACCOUNTS. ITA NO.4222/DEL/2015 ITA NOS.4221 & 4222/DEL./2015 ITA NOS.4223 & 4224/DEL./2015 3 1. THAT THE LEARNED CIT (APPEALS) HAS ERRED THE LAW AND ON FACTS IN CONFIRMING THE ACTION OF THE LEARNE D AO FOR IMPOSING THE PENALTY. 2. THAT HAVING REGARDS TO THE FACT AND CIRCUMSTANCE S OF THE CASE, LEARNED CIT (APPEALS) HAS ERRED IN ESTABL ISHING THE NATURE OF WORK OF THE ASSESSEE I.E. THE ASSESSE E IS WORKED AS KACCHHA ARHITYA DURING THE YEAR, AND CONFIRM THE ACTION OF LD. AO OF IMPOSING THE PENALTY OF RS.68,940/- (W RONGLY MENTIONED RS.1,00,000/- IN THE GROUNDS OF APPEAL) U /S 271B OF THE INCOME TAX ACT, 1961. 3. THAT LEARNED CIT(A) HAS WRONGLY CONFIRMED THE ACTION OF THE LD. AO, THAT APPELLANT TURNOVER EXCEE DS THE MONETARY LIMIT AS PRESCRIBED UNDER SECTION 44AB OF THE ACT AND NO AUDIT HAS BEEN CONDUCTED OF HIS ACCOUNTS, TH EREFORE, THE PENALTY WAS ATTRACTED. 4. THAT THE LEARNED CIT(A) DID NOT CONSIDERED THE VERSION OF THE ASSESSEE THAT THE APPELLANT WAS A KA CCHHA ARHTIA. 5. THAT LD. CIT(A) WRONGLY MENTIONED IN HIS ORDER T HAT ASSESSEE COULD NOT ESTABLISHED THAT THE ASSESSEE IS KACCHHA ARHTIA AND THE TURNOVER MADE BY HIM WAS ON BEHALF O F THE AGRICULTURISTS. THE ASSESSEE HAS FILED COMPLETE DET AILS AND EVIDENCE REGARDING KACHHA ARHTIA BECAUSE APPELLANT HAS CONTENDED THAT HE WAS A RETAIL TRADER OF TOMATO AND HIS TURNOVER FROM AGRICULTURE PRODUCE WAS RS. 35,29,210 1- AND INCOME U/S 44AF @ 5%. 6. THAT LD. CIT(A) DID CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE, THAT PENALTY U/S 271B FO R FAILURE TO GET BOOKS OF ACCOUNTS AUDITED WHERE THERE IS FAI LURE OF TO MAINTAIN THE BOOKS OF ACCOUNTS AND PENALTY U/S 271A WAS LEVIED FOR THIS FAILURE. 3. THE APPELLANT, SHRI IMRAN (HEREINAFTER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESENT APPEALS, SOUGHT T O SET ASIDE THE IMPUGNED ORDER DATED 09.03.2015 PASSED BY LD. CIT (APPEALS), ITA NOS.4221 & 4222/DEL./2015 ITA NOS.4223 & 4224/DEL./2015 4 MUZAFFARNAGAR QUA THE ASSESSMENT YEAR 2009-10 ON TH E GROUNDS INTER ALIA THAT:- ITA NO.4223/DEL/2015 1. THAT THE LEARNED CIT (APPEALS) HAS ERRED THE LAW AND ON FACTS IN CONFIRMING THE ACTION OF THE LEARNE D AO FOR IMPOSING THE PENALTY. 2. THAT HAVING REGARDS TO THE FACT AND CIRCUMSTANCE S OF THE CASE, LEARNED CIT (APPEALS) HAS ERRED IN JUSTIF YING THE PENALTY OF RS.25000/- U/S 271A AS LAW DOES NOT PRES CRIBED THE SPECIFIC BOOKS OF ACCOUNTS WHICH WERE REQUIRED TO BE MAINTAINED. . 3. THAT THE APPELLANT HAS A BONAFIDE BELIEF, THAT T HERE IS NO REQUIREMENT FOR MAINTAINING THE BOOKS OF ACCOUNT S. THE LD. AO WAS IN POSITION TO CALCULATE THE PROFIT OF T HE ASSESSEE ON THE BASIS OF THE DOCUMENTS / OTHER PAPERS. 4. THE LD. CIT(A) HAVE WRONGLY SUPPORT THE VIEWS TA KEN BY THE LD. AO IN RESPECT OF FLAT RATE OF PROFIT ON SALE WITHOUT RAISING THE QUESTION OF BOOKS OF ACCOUNTS AND WITHO UT ANY RESERVATION ON HIS PART AS REGARD THE ACCOUNTS. ITA NO.4224/DEL/2015 1. THAT THE LEARNED CIT (APPEALS) HAS ERRED THE LAW AND ON FACTS IN CONFIRMING THE ACTION OF THE LEARNE D AO FOR IMPOSING THE PENALTY. 2. THAT HAVING REGARDS TO THE FACT AND CIRCUMSTANCE S OF THE CASE, LEARNED CIT (APPEALS) HAS ERRED IN ESTABL ISHING THE NATURE OF WORK OF THE ASSESSEE I.E. THE ASSESSE E IS WORKED AS KACCHHA ARHITYA DURING THE YEAR, AND CONFIRM THE ACTION OF LD. AO OF IMPOSING THE PENALTY OF RS.1,00,000/- U/S 271B OF THE INCOME TAX ACT, 1961. 3. THAT LEARNED CIT(A) HAS WRONGLY CONFIRMED THE ACTION OF THE LD. AO, THAT APPELLANT TURNOVER EXCEE DS THE MONETARY LIMIT AS PRESCRIBED UNDER SECTION 44AB OF THE ACT AND NO AUDIT HAS BEEN CONDUCTED OF HIS ACCOUNTS, TH EREFORE, THE PENALTY WAS ATTRACTED. ITA NOS.4221 & 4222/DEL./2015 ITA NOS.4223 & 4224/DEL./2015 5 4. THAT THE LEARNED CIT(A) DID NOT CONSIDERED THE VERSION OF THE ASSESSEE THAT THE APPELLANT WAS A KA CCHHA ARHTIA. 5. THAT LD. CIT(A) WRONGLY MENTIONED IN HIS ORDER T HAT ASSESSEE COULD NOT ESTABLISHED THAT THE ASSESSEE IS KACCHHA ARHTIA AND THE TURNOVER MADE BY HIM WAS ON BEHALF O F THE AGRICULTURISTS. THE ASSESSEE HAS FILED COMPLETE DET AILS AND EVIDENCE REGARDING KACHHA ARHTIA BECAUSE APPELLANT HAS CONTENDED THAT HE WAS A RETAIL TRADER OF TOMATO AND HIS TURNOVER FROM AGRICULTURE PRODUCE WAS RS.32,83,100/ - AND INCOME U/S 44AF @ 5%. 6. THAT LD. CIT(A) DID CONSIDERED THE FACTS AND CIRCUMSTANCES OF THE CASE, THAT PENALTY U/S 271B FO R FAILURE TO GET BOOKS OF ACCOUNTS AUDITED WHERE THERE IS FAI LURE OF TO MAINTAIN THE BOOKS OF ACCOUNTS AND PENALTY U/S 271A WAS LEVIED FOR THIS FAILURE. BRIEF FACTS OF ITA NO.4221/DEL/2015 & ITA NO.4222/DEL/2015 4. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICA TION OF THE CONTROVERSY AT HAND IN THE AFORESAID TWO APPEALS AR E : DURING THE ASSESSMENT PROCEEDINGS, NOTICES UNDER SECTION 142(1 ) DATED 22.07.2011 IN CASE OF IRSHAD FOR AY 2009-10 WERE IS SUED TO PRODUCE THE BOOKS OF ACCOUNT ALONG WITH BILLS AND V OUCHERS BUT THE ASSESSEE HAS FAILED TO PRODUCE THE SAME AND CONSEQU ENTLY ADDITION OF RS.12,18,290/- WAS MADE TO THE ASSESSEE ON ACCOU NT OF EXPENSES CLAIMED BUT NOT VERIFIABLE. CONSEQUENTLY, PENALTY PROCEEDINGS WERE INITIATED VIDE NOTICE ISSUED U/S 274 READ WITH SECTION 271A AND 271B FOR NON-MAINTENANCE OF BOOKS OF ACCOUNT IN VIEW OF THE PROVISIONS CONTAINED U/S 44AA AND FOR NOT GETTING T HE SAME ITA NOS.4221 & 4222/DEL./2015 ITA NOS.4223 & 4224/DEL./2015 6 AUDITED. DECLINING THE CONTENTIONS RAISED BY THE A SSESSEE THAT HE HAS BEEN FILING RETURN SHOWING INCOME ON PRESUMPTIV E BASIS U/S 44AF, PENALTY TO THE TUNE OF RS.25,000/- AND RS.68, 940/- IN ITA NOS.4221/DEL/2015 & 4222/DEL/2015 U/S 271A & 271B RESPECTIVELY HAS BEEN LEVIED. BRIEF FACTS OF ITA NO.4223/DEL/2015 & ITA NO.4224/DEL/2015 5. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICA TION OF THE CONTROVERSY AT HAND IN THE AFORESAID TWO APPEALS AR E : DURING THE ASSESSMENT PROCEEDINGS, NOTICES UNDER SECTION 142(1 ) DATED 22.07.2011 IN CASE OF IMRAN FOR AY 2009-10 WERE ISS UED TO PRODUCE THE BOOKS OF ACCOUNT ALONG WITH BILLS AND V OUCHERS BUT THE ASSESSEE HAS FAILED TO PRODUCE THE SAME AND CONSEQU ENTLY ADDITION OF RS.18,98,680/- WAS MADE TO THE ASSESSEE ON ACCOU NT OF EXPENSES CLAIMED BUT NOT VERIFIABLE. CONSEQUENTLY, PENALTY PROCEEDINGS WERE INITIATED VIDE NOTICE ISSUED U/S 274 READ WITH SECTION 271A AND 271B FOR NON-MAINTENANCE OF BOOKS OF ACCOUNT IN VIEW OF THE PROVISIONS CONTAINED U/S 44AA AND FOR NOT GETTING T HE SAME AUDITED. DECLINING THE CONTENTIONS RAISED BY THE A SSESSEE THAT HE HAS BEEN FILING RETURN SHOWING INCOME ON PRESUMPTIV E BASIS U/S 44AF, PENALTY TO THE TUNE OF RS.25,000/- AND RS.1,0 0,000/- IN ITA ITA NOS.4221 & 4222/DEL./2015 ITA NOS.4223 & 4224/DEL./2015 7 NOS.4223/DEL/2015 & 4224/DEL/2015 U/S 271A & 271B RESPECTIVELY HAS BEEN LEVIED. 6. ASSESSEES CARRIED THE MATTER BY WAY OF APPEALS B EFORE THE LD. CIT (A) WHO HAS CONFIRMED THE PENALTIES LEVIED BY A O BY DISMISSING THE APPEALS. FEELING AGGRIEVED, THE ASSE SSEES HAVE COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEALS. 7. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS R ELIED UPON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN T HE LIGHT OF THE FACTS AND CIRCUMSTANCES OF THE CASE. 8. AT THE VERY OUTSET, IT IS BROUGHT TO OUR NOTICE BY THE LD. AR FOR THE ASSESSEES THAT THE QUANTUM ORDER PASSED BY THE AO / LD. CIT (A) ON THE BASIS OF WHICH PENALTY PROCEEDINGS WERE INITIATED, HAVE BEEN SET ASIDE BY THE COORDINATE BENCH OF THE TRIBU NAL TO THE FILE OF THE LD. CIT (A) WITH DIRECTION TO PASS A SPEAKING O RDER AS THE ASSESSEES HAVE RAISED THE QUESTION BEFORE LD. CIT ( A) THAT HE BEING A KACHHA ARHATIYA AND AS SUCH, HE IS NOT MAINTAINING BOOKS OF ACCOUNT AND THIS ISSUE REMAINED UNDECIDED IN THE QU ANTUM PROCEEDINGS. IN THE FACE OF THESE UNDISPUTED FACTS , WE ARE OF THE CONSIDERED VIEW THAT SINCE THE QUANTUM PROCEEDINGS HAVE NOT YET ATTAINED FINALITY HAVING BEEN PENDING BEFORE THE LD . CIT (A), THE PENALTY PROCEEDINGS ARE NOT SUSTAINABLE. SO, IMPUG NED ORDERS ITA NOS.4221 & 4222/DEL./2015 ITA NOS.4223 & 4224/DEL./2015 8 PASSED BY THE LD. CIT (A) IN ALL THE AFORESAID APPE ALS ARE HEREBY SET ASIDE AND FILES ARE RESTORED BACK TO AO TO DECIDE A FRESH AFTER PROVIDING AN OPPORTUNITY OF BEING HEARD TO THE ASSE SSEE WHEN THE QUESTION RAISED BY THE ASSESSEE THAT HE IS A KACHHA ARHATIYA IS DECIDED BY THE LD. CIT (A). CONSEQUENTLY, ALL THE AFORESAID APPEALS FILED BY THE ASSESSEES ARE ALLOWED FOR STAT ISTICAL PURPOSES. ORDER PRONOUNCED IN OPEN COURT ON THIS 17 TH DAY OF SEPTEMBER, 2018. SD/- SD/- (N.K. SAINI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 17 TH DAY OF SEPTEMBER, 2018 TS COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A), MUZAFFARNAGAR. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.