DILIP SHAH, MUMBAI V. DCIT CEN CIR 11, MUMBAI

ITA 461/MUM/2014

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 7938 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-03-2017
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 20-03-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 20-01-2014
• Court: TRIBUNAL
• Department Lawyers: PURUSHOTTAM KUMARDR
• Section: 27

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI , . . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER ITA NOS.448 TO 454/MUM/2014 ASSESSMENT YEARS: 2001-02 TO 2007-08 SHRI DILIP SHAH, 401, SPENTA TOWERS, 55/57, FORGETT STREET, GOWALIA TANK, MUMBAI-400036 / VS. DCIT, CENTRAL CIRCLE-11, MUMBAI ( '# $ /ASSES SEE) ( ) / REVENUE) P.A. NO. ACWPS4146B ITA NOS.455 TO 461/MUM/2014 ASSESSMENT YEARS: 2001-02 TO 2007-08 SHRI DILIP SHAH, 401, SPENTA TOWERS, 55/57, FORGETT STREET, GOWALIA TANK, MUMBAI-400036 / VS. DCIT, CENTRAL CIRCLE-11, MUMBAI ( ' # $ /ASSESSEE) ( ) / REVENUE) P.A. NO. ACWPS4146B DILIP SITARAM BHAMARE ITA NO.448 TO461/MUM/2014 2 '# $ / ASSESSEE BY MS. VINITA SHAH ) / REVENUE BY SHRI PURUSHOTTAM KUMAR-DR * )+ , $ - / DATE OF HEARING : 23/03/2017 , $ - / DATE OF ORDER: 24/03/2017 / O R D E R PER BENCH THIS BUNCH OF FOURTEEN APPEALS IS BY THE ASSESSEE AGAINST THE IMPUGNED ORDERS ALL DATED 12/12/2013 OF THE LD. FIRST APPELLATE AUTHORITY, MUMBAI, CONFIRMING P ENALTY IMPOSED U/S 271B AND 271A OF THE INCOME TAX ACT, 19 61 (HEREINAFTER THE ACT) AS CONTAINED IN THE RESPECTIV E APPEAL. 2. DURING HEARING OF THESE APPEALS, THE LD. COUNSE L FOR THE ASSESSEE, MS. VINITA SHAH, CONTENDED THAT S IMILARLY PENALTY WAS LEVIED IN THE CASE OF ATUL SANGHAVI, PA RTNER OF THE ASSESSEE, WHO ALSO FILED BEFORE THE TRIBUNAL, W HEREIN, VIDE ORDER DATED 16/03/2017 (ITA NO.504 TO 517/MUM/2014) DISMISSED THE APPEAL IN ITA NO.504 TO 510/MUM/2014 AND ALLOWED THE APPEAL IN ITA NO.511 T O 517/MUM/2014, THEREFORE, SAME VIEW MAY BE TAKEN. TH IS FACTUAL MATRIX WAS NOT CONTROVERTED BY SHRI PURUSHO TTAM KUMAR, LD. DR, THOUGH HE DEFENDED THE PENALTY IMPOS ED BY THE ASSESSING OFFICER. DILIP SITARAM BHAMARE ITA NO.448 TO461/MUM/2014 3 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW O F THE ABOVE, WE ARE REPRODUCING HEREUNDER THE RELEVANT PO RTION FROM THE ORDER DATED 16/03/2017 IN THE CASE OF ATUL A. SANGHAVI FOR READY REFERENCE AND ANALYSIS:- ITA NO. 504/MUM/2014 TO ITA NO. 510/MUM/2014 ARE APPEALS BY THE ASSESSEE AGAINST COMMON ORDER OF CIT -A, FOR CONCERNED ASSESSMENT YEARS WHEREIN LD. CIT-A HAS CO NFIRMED THE LEVY OF PENALTY OF RS. 25,000/- EACH U/S. 271 A . 2. ITA NO. 511/MUM/2014 TO ITA NO. 517/MUM/2014 ARE APPEALS BY THE ASSESSEE AGAINST COMMON ORDER OF LD. CIT-A WHEREIN HE HAS CONFIRMED THE LEVY OF PENALTY OF RS. 1 LAC EACH U/S. 271 B FOR THE CONCERNED ASSESSMENT YEAR. 3. SINCE THE APPEALS WERE HEARD TOGETHER THESE ARE BEING CONSOLIDATED AND DISPOSED OF TOGETHER BY THIS COMMO N ORDER. 4. APPEAL AGAINST PENALTY U/S. 271 A. 5. AT THE OUTSET LD. COUNSEL SUBMITTED THAT PENALTY HAS BEEN LEVIED FOR NON-MAINTENANCE OF BOOKS OF ACCOUNTS. HE SUBMITTED THAT ASSESSEE HAS NOT BEEN DOING ANY BUSINESS HE WA S ONLY RECEIVING COMMISSION. LD. COUNSEL FAIRLY AGREED THA T FOR THE EARNING OF COMMISSION INCOME TOO ASSESSEE SHOULD HA VE MAINTAINED BOOKS OF ACCOUNTS. IN VIEW OF THE AFORES AID ADMISSION BY THE LD. COUNSEL OF THE ASSESSEE THAT A SSESSEE HAS NOT MAINTAINED REQUIRED BOOKS OF ACCOUNTS WE DO NOT FIND ANY INFIRMITY OF THE ORDER OF LD. CIT-A. ACCORDINGLY WE UPHOLD THE SAME. 6. APPEALS AGAINST LEVY OF PENALTY U/S. 271 B. 7. ON THIS ISSUE WE NOTE THAT PENALTY HAS BEEN LEVI ED FOR NOT GETTING THE ACCOUNTS AUDITED U/S. 44AB. ON THIS ISS UE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT WHEN THE ASS ESSEE HAS BEEN FOUND TO BE NOT MAINTAINING BOOKS OF ACCOUNTS, THERE IS NO QUESTION OF LEVY OF PENALTY U/S. 271 B FOR FAILU RE TO GET THE DILIP SITARAM BHAMARE ITA NO.448 TO461/MUM/2014 4 ACCOUNTS AUDITED. IN THISREGARD LD. COUNSEL PLACED RELIANCE UPON FOLLOWING HONBLE ALLAHABAD HIGH COURT DECISIO N WHEREIN IT WAS HELD THAT WHERE NO BOOKS OF ACCOUNTS ARE MAINTAINED BY THE ASSESSEE PENALTY U/S. 271 B IS NO T ATTRACTED. I) CIT VS. S. K GUPTA & COMPANY (322 ITR 0086). II) CIT VS. BISAULI TRACTORS (299 ITR 0219) 8. NO JURISDICTIONAL HIGH COURT DECISION CONTRARY T O THE ABOVE PROPOSITION WAS BROUGHT BEFORE US. 9. ACCORDINGLY RESPECTFULLY FOLLOWING THE PRECEDENT S FROM THE HONBLE HIGH COURT DECISION AS ABOVE WE SET ASIDE T HE ABOVE ORDERS OF AUTHORITIES BELOW AND DELETE THE LEVY OF PENALTY U/S. 271 B. IN THE RESULT ASSESSEES APPEALS IN ITA NO. 504 TO 510 ARE DISMISSED AND ASSESSEES APPEAL IN ITA NO. 511 TO 5 17 ARE ALLOWED. 2.2. WE FIND THAT IN THE AFORESAID CASE, PENALTY WAS LEVIED FOR NON-MAINTENANCE OF BOOKS OF ACCOUNTS AS THE ASSESSEE WAS NOT DOING ANY BUSINESS AND WAS MERELY RECEIVING COMMISSION. IT WAS FAIRLY AGREED THAT FOR EARNING COMMISSION INCOME ALSO THE ASSESSEE WAS TO MAINTAIN BOOKS OF ACCOUNTS, THEREFORE, ON THAT COUNT, THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEAL) WAS UPHELD. SO FAR AS, LEVY OF PENALTY U/S 271B IS CONCERNED, IT WAS LEVIE D FOR NOT GETTING THE ACCOUNTS AUDITED U/S 44AB OF THE ACT. I N THAT SITUATION, WHEN THE ASSESSEE WAS NOT MAINTAINING BO OKS OF ACCOUNT, THERE WAS NO QUESTION OF GETTING THE ACCOU NTS AUDITED, THEREFORE, THERE WAS NO QUESTION OF LEVY P ENALTY U/S 271B OF THE ACT FOR SUCH FAILURE. THE TRIBUNAL WHIL E COMING TO A PARTICULAR CONCLUSION, RELIED UPON THE DECISIO N IN THE CASE OF CIT VS S.K. GUPTA & CO. 322 ITR 86 (ALL.) A ND CIT DILIP SITARAM BHAMARE ITA NO.448 TO461/MUM/2014 5 VS BSAULI TRACTORS 299 ITR 219 (ALL.). NO CONTRARY DECISION WAS CITED FROM EITHER SIDE. IN THE PRESENT APPEALS ALSO SIMILAR FACTS WERE ARGUED TO EXIST, WHICH WAS NOT CONTROVERTED BY THE REVENUE. THE HON'BLE GAUHATI HI GH COURT IN SURAJAMAL PARSURAM TODI VS CIT (222 ITR 691)(GAU.) HELD AS UNDER:- MAINTENANCE OF ACCOUNTS IS ENVISAGED UNDER S. 44AA AND ON FAILURE TO DO SO THE ASSESSEE SHALL BE GUILTY AN D LIABLE TO BE PENALISED UNDER S. 271A. EVEN AFTER MAINTENANCE OF BOOKS OF ACCOUNT THE OBLIGATION OF THE ASSESSEE DOE S NOT COME TO AN END. HE IS REQUIRED TO DO SOMETHING MORE , I.E., BY GETTING THE BOOKS OF ACCOUNT AUDITED BY AN ACCOU NTANT. BUT WHEN A PERSON COMMITS AN OFFENCE BY NOT MAINTAI NING THE BOOKS OF ACCOUNT AS CONTEMPLATED BY S. 44AA THE OFFENCE IS COMPLETE. AFTER THAT THERE CAN BE NO POS SIBILITY OF ANY OFFENCE AS CONTEMPLATED BY S. 44AB AND, THEREFO RE, THE IMPOSITION OF PENALTY UNDER S. 271B IS ERRONEOUS. T HE TRIBUNAL HAS OVERLOOKED THIS ASPECT OF THE MATTER. OF COURSE, IT IS APPARENT FROM THE RECORDS THAT THE AS SESSEE FAILED TO MAINTAIN THE BOOKS OF ACCOUNT AS REQUIRED UNDER S. 44AA AND FOR THAT PENALTY IS PRESCRIBED UNDER S. 27 1A. FOLLOWING THE ORDER OF THE COORDINATE BENCH AND THE DECISIONS FROM HON'BLE ALLAHABAD HIGH COURT ALONG W ITH THE DECISION IN SURAJMAL PARSURAM TODI VS CIT (SUPRA), WE DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY IMPOSED U/S 271B OF THE ACT AND AFFIRM THE PENALTY IMPOSED U/S 271A OF THE ACT FOR THE VIOLATION. THUS, THE APPEAL S U/S 271B OF THE ACT IN ITA NO.448 TO 454/MUM/2014 ARE ALLOWED AND THE REMAINING APPEAL FOR IMPOSING PENAL TY U/S 271A OF THE ACT IN ITA NO.455 TO 461/MUM/2014 IS DISMISSED. DILIP SITARAM BHAMARE ITA NO.448 TO461/MUM/2014 6 FINALLY, THE APPEALS ARE DISPOSED OFF IN TERMS INDI CATED HEREINABOVE. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENT OF LD. REPRESENTATIVES FROM BOTH SIDES AT T HE CONCLUSION OF HEARING ON 23/03/2017. SD/- SD/- ( N.K. PRADHAN ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER * + MUMBAI; / DATED : 24/03/2017 F{X~{T? P.S / 0) %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. 1234 / THE APPELLANT 2. 534 / THE RESPONDENT. 3. 6 6 * 7$ ( 12 ) / THE CIT, MUMBAI. 4. 6 6 * 7$ / CIT(A)- , MUMBAI 5. 8)9 $ , 6 12- 1 : , * + / DR, ITAT, MUMBAI 6. ' ;+ / GUARD FILE. / BY ORDER, 582$ $ //TRUE COPY// / (DY./ASSTT. REGISTRAR) , * + / ITAT, MUMBAI,