Adrian mellia Fernandez, Pune V. ITO, Wd.-4(5), Pune

ITA 469/PUN/2010

• Counselvise Citation: 46924514 RSA 2010
• Duration Of Justice: 1 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2006-2007
• Appeal Filed On: 29-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K AMBASTHA
• Keywords: Business income; Reasonable cause
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A, PUNE BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER AND SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO 469/PN/10 (ASSTT. YEAR: 2006-07) ADRIAN MELLIA FERNANDEZ, .. APPELLANT 1751 CLOVER HIGH LANDS, NIBM ROAD, KONDHWA, PUNE PAN AAEPF4090M VS. INCOME-TAX OFFICER, RESPONDENT WD. 4(5), PUNE APPELLANT BY: SHRI SUNIL GANOO RESPONDENT BY: SHRI S.K. AMBASTHA ORDER PER G.S. PANNU, AM THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, PUNE D ATED 28.01.2010 WHICH, IN TURN, HAS ARISEN FROM PENALTY ORDER PASSED BY THE ASSESSING OFFICER UNDER SECTION 271A OF THE INC OME-TAX ACT, 1961 (IN SHORT THE ACT), PERTAINING TO THE ASSESS MENT YEAR 2006-07. 2. THE ASSESSEE IS AN INDIVIDUAL CARRYING ON THE BUSINESS OF MARKETING MACHINE TOOLS AND OTHER ALLIED ITEMS MANUFACTURED BY FO REIGN COMPANIES. THE 2 ASSESSEE IS ALSO A DIRECTOR IN A COMPANY AND DERIVES SALARY I NCOME AS WELL AS DIVIDEND INCOME. AS IN THE PAST YEARS, THE ASSESSEE FILED A RETURN FOR THE YEAR UNDER CONSIDERATION DECLARING HIS COMMISSION INCOME ON A PR ESUMPTIVE BASIS IN TERMS OF SECTION 44AF OF THE ACT AT THE RATE OF 5%. THE ASSESSEE DID NOT MAINTAIN REGULAR BOOKS OF ACCOUNT AS THE INCOME WAS BEING OFFERED IN TERMS OF SECTION 44AF OF THE ACT. HOWEVER, IN THE COURSE OF SCRUTINY ASSESSME NT PROCEEDINGS FOR THE IMPUGNED ASSESSMENT YEAR, IT WAS BROUGHT TO THE NOT ICE OF THE ASSESSEE THAT THE PROVISIONS OF SECTION 44AF WERE APPLICABLE ONLY TO R ETAIL BUSINESS AND NOT TO SUCH LIKE BUSINESS CARRIED OUT BY THE ASSESSEE. IT TRANSPIRES THAT THE ASSESSEE GAVE REVISED CALCULATIONS OF HIS INCOME BASED ON THE ROUGH RECORDS MAINTAINED BY HIM AS WELL AS THE ENTRIES APPEARING IN THE BANK PASSB OOK AND ACCORDINGLY, THE ASSESSING OFFICER DETERMINED THE NET INCOME FROM BUS INESS AT RS 37,25,096/- AND A NET TAXABLE INCOME OF RS 39,24,68 0/-, AS AGAINST BUSINESS INCOME OF RS 1,94,861/- AND NET TAXABLE INCOME OF RS 3,94,441/- DECLARED IN THE RETURN. SUBSEQUENTLY, THE ASSESSEE HAS BEEN LEVIED WITH PENALTY FOR NON- MAINTENANCE OF BOOKS OF ACCOUNT AS REQUIRED BY THE PROV ISIONS OF SECTION 44A(2)(I) OF THE ACT AMOUNTING TO RS 25,000/-. THE CO MMISSIONER OF INCOME-TAX (APPEALS) HAS SUSTAINED THE PENALTY. 3. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSEE POIN TED OUT THAT IT WAS BONA FIDE BELIEF ON THE PART OF THE ASSESSEE THAT HE W AS NOT REQUIRED TO MAINTAIN BOOKS OF ACCOUNT AND FURTHER THE ASSESSEE CO-OPERATED WITH THE DEPARTMENT IN RECOMPUTING HIS INCOME AS AND WHEN IT WAS BROUGHT TO HI S NOTICE THAT PROVISIONS OF SECTION 44AF WERE NOT APPLICABLE. IT WAS, THEREFORE, CONTENDED THAT THERE WAS REASONABLE CAUSE FOR ASSESSEES FAILURE TO MAINTAIN REGULA R BOOKS OF ACCOUNT AND ACCORDINGLY PENALTY BE DELETED. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS CAREFULLY. HAVI NG NOTICED THE FACTUAL POSITION, WE FIND NO REASONS TO UPHOLD THE PEN ALTY, INASMUCH AS THE BONA FIDES OF REASONS CANVASSED BY THE ASSESSEE HAVE NOT BEEN DI SPUTED. WE, 3 THEREFORE, CONSIDERING THE PROVISIONS OF SECTION 273B RE AD WITH SECTION 271A OF THE ACT, SET ASIDE THE ORDER OF THE COMMISSIONER OF IN COME-TAX (APPEALS) AND DIRECT THE ASSESSING OFFICER TO DELETE THE IMPUGNED PEN ALTY OF RS 25,000/-. 5. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. DECISION PRONOUNCED IN THE OPEN COURT ON THIS 5 TH DAY OF AUGUST, 2011. SD/- SD/- (SHAILENDRA KUMAR YADAV) (G. S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEM BER PUNE, DATED: 5 TH AUGUST, 2011 B COPY TO:- 1) ASSESSEE 2) DEPARTMENT 3) THE CIT (A)-II PUNE 4) CIT-II PUNE 5) DR, A BENCH, ITAT, PUNE. 6) GUARD FILE BY ORDER TRUE COPY ASST. REGISTRAR, I.T.A.T., PUNE