Appeal details
Counselvise Citation
[2023] 102 COUNSELVISE.COM (IT) 1055 (ITAT-JAIPUR)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
1 month(s) 19 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
26-09-2023
Appeal Filed By
Assessee
Order Result
Dismissed
Bench Allotted
SMC
Next Hearing Date
19-09-2023
Assessment Year
2015-2016
Appeal Filed On
06-08-2023
Judgement Text
vk;djvihyh; vf/kdj.k] t;iqjU;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR JhlaanhixkslkbZ]U;kf;dlnL; ,oaJhjkBksMdeys'kt;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: SHRI SANDEEP GOSAIN, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;djvihy la-@ITA No. 501, 494 & 499/JP/2023 fu/kZkj.ko"kZ@Assessment Year :2015-16 (u/s 271(1)(c) 271B & 271A of the Act,1961) Shri Rajesh Kumar Baid B-10, Tulsidasji Ki Bagichi Janta Colony, Jaipur 302 004 (Raj) cuke Vs. The ITO Ward 5(2) Jaipur LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: ABZPB 7205 M vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assessee by : None jktLo dh vksj ls@Revenue by: Mrs. Monisha Choudhary, Addl. CIT lquokbZ dh rkjh[k@Date of Hearing : 20/09/2023 mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 27/09/2023 vkns'k@ORDER PER: SANDEEP GOSAIN, JM These three appeals of the assessee are against three different orders of the ld. CIT(A) dated 9-06-2023, 07-06-2023 & 9-06-2023, National Faceless Appeal Centre, Delhi [ hereinafter referred to as (NFAC) ] for the assessment year 2015-16 in the matter of Section 271(1)(c), 271B & 271A of the Act,1961 respectively wherein the assessee has raised following grounds of appeal in the respective appeals. 2 ITA NO. 501/JP/2023 SHRI RAJESH KUMAR BAID VS ITO, WARD 5(2), JAIPUR ITA No.501/JP/2023 – A.Y. 2015-16 ‘’Whether in the facts and circumstances of the case and in law the ld. CIT(A) is justified in confirming the order of AO in imposing penalty of Rs.13,558/- u/s 271(1)(c) of the Act.’’ ITA No.494/JP/2023 – A.Y. 2015-16 ‘’That in the facts and circumstances of the case and in law the AO has grossly erred in imposing penalty u/s 271B of the Income Tax Act and the appellate authority has grossly erred in confirming the order of the AO.’’ ITA No.499/JP/2023 – A.Y. 2015-16 ‘’Whether in the facts and circumstances of the case and in law the ld. CIT(A) is justified in confirming the order of AO in imposing penalty of Rs.25000/- u/s 271A of the Act.’’ 2.1 During the course of hearing, the Bench noted that at the time of hearing of these appeals by the ld. CIT(A), NFAC vide his order dated 09-06-2023 and 07- 06-2023 and 9-06-2023 has dismissed the appeals in the matter of Section 271(1)(c) 271B and 271A of the Act,1961 respectively by holding as under:- Section 271(1)c) of the Act ‘’5.7 The Assessee has relied on various decisions mentioned above. The decisions relied upon by the appellant are distinguishable on facts. First of all, this is an addition based on facts. Issue involved is not a debatable. Therefore, the decision of Hon'ble Apex Court in the case of CIT vs. Reliance Petroproducts Pvt. Ltd. will not come to the rescue of the appellant. 3 ITA NO. 501/JP/2023 SHRI RAJESH KUMAR BAID VS ITO, WARD 5(2), JAIPUR 5.8 In the case of CIT vs. Zoom Communication (P) Ltd. 327 ITR 510 (Del) it has been held that if assessee makes a claim which is not only incorrect in law, but is also wholly without any basis and explanation furnished by him for making such a claim is not found to be bonafide, Explanation 1 to Section 271(1)(c) would come into play and assessee will be liable to penalty. The decision of Hon'ble Delhi High Court is squarely applicable to the facts of the present case. 5.9 Concealment should not be taken in its common literal meaning. The concealment can be made by claiming wrong deduction in the manner different from the one prescribed under law. Therefore, concealment does not only mean the non-reporting of any item of income. It also means claiming wrongful deduction and reducing its taxable income. The assessee has done exactly the same thing. It has been held that "falsehood in accounts can take either of the two forms: either an item of receipt may be suppressed fraudulently, or, an item of expenditure may be falsely (or in an exaggerated amount) clamed. Both types attempt to reduce the taxable income. Both types amount of concealment of the particulars of one's income as well as furnishing of inaccurate particulars of income. Penalty may be imposed for either or both such attempts. In this regard, reliance is placed on the case law in the case of CIT v. India Sea Foods (1976) 105 ITR 708 (Ker.), Nagin Chand Shiv Sahal v. CIT: (1938) 6 ITR 537 (Lah); CIT v. Gates Foam & Rubber Co. (1972) 91 ITR 467 (Ker)). 5.10 Under the Act, penalty u/s. 271(1)(c) is leviable not only for concealing the income but also for furnishing inaccurate particulars of such income. It has been held the word 'income' in section 271(1)(c) is not used in the popular sense of money received but connotes the assessable figures arrived at after accounting for all the legitimate and exemptions (Naginchand v. CIT 6 ITR 534). Further reliance is placed on the following case laws. 1. CIT v. Gates 91 ITR 467 2. Cement Distributors v.CIT 60 ITR 586 4 ITA NO. 501/JP/2023 SHRI RAJESH KUMAR BAID VS ITO, WARD 5(2), JAIPUR 3. CIT v. Premier Breweries 244 ITR 598 4 CIT v. Vilasben 192 ITR 214 5. CIT v. Abdulgafur 199 ITR 827 & 6. CIT v. Vidhyagauri 238 ITR 91. 5.11 In the light of the foregoing discussion and the judicial decisions, penalty levied by the AO u/s.271(1)(c) of the Act for concealing particulars of income amounting to Rs. 13,558/- is hereby confirmed.’’ Section 271B of the Act ‘’5.1 I have carefully gone through the penalty order and the submissions made by the appellant against the penalty levied u/s 271B of the Act. During the course of assessment proceedings, the AO found that the appellant was engaged in the business of jewelry trading with gross receipts of Rs 20,02,550/- and declared net profit u/s 44AD of Rs 2,20,280/-. Further, the AO found that the assessee has also made two business viz. trading of jewelry and shares and the total turnover of both the businesses was Rs 1,79,89,383/- Therefore, the AO has levied penalty u/s 271B of the Act as the assessee has failed to get his accounts audited. 5.2 In the submissions made during the appellate proceedings, the appellant stated that he suffered loss from share transactions, all the records regarding share transactions were kept and maintained by the share broker and he was not aware about volume of transactions conducted during the year. He furnished all the statements maintained by the share broker regarding share transactions and argued that he was prevented by sufficient cause from getting the accounts audited under Section 44AB of the Act. The appellant also relied on the various judicial pronouncements. Section 271B lays down that- "if any person fails to get his accounts audited in respect of any previous year or years relevant to an assessment year or furnish a 5 ITA NO. 501/JP/2023 SHRI RAJESH KUMAR BAID VS ITO, WARD 5(2), JAIPUR report of such audit as required under section 44AB, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum equal to one-half percent of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in profession, in such previous year or years or a sum of one hundred fifty thousand rupees, whichever is less." 5.3 The penalty proceedings u/s 271B are initiated for violation of statutory obligation to get the accounts audited as prescribed u/s 44AB of the Act within the prescribed time limits. Provisions of section 44AB of the IT Act relevant to the AY 2017-18 read as under: Audit of accounts of certain persons carrying on business or profession. 44AB. Every person,- (a) carrying on business shall, if his total sales, turnover or gross receipts, as the case may be, in business exceed or exceeds fifty lakhs rupees in any previous year or .... (ii) "specified date", in relation to the accounts of the assessee of the previous year relevant to an assessment year, means the due date for furnishing the return of income under sub-section (1) of section 139, 5.4 Section 271B lays down that if any person fails, without reasonable cause, to get his accounts audited in respect of any previous year or years relevant to an assessment year or obtain a report of such audit as required under section 44AB, the Income-tax Officer may direct that such person shall pay, by way of penalty, a sum equal to one-half per cent of the total sales, turnover or grass receipts, as the case may be, in business, or of the gross receipts in profession, in such previous year or years or a sum of one hundred fifty thousand rupees, whichever is less. Section 271B does not leave any discretion with the authority. Penalty u/s. 271B gets attracted unless it is proved that there was reasonable cause for the failure. I do not see any genuine reason in the explanation given by the appellant. It is not the case of the appellant that the turnover had not exceeded fifty lakhs for the year Reliance is placed on the decision in the case of Peroorkkada Service Co-operative Bank Ltd. Vs ITO [2020] 424 6 ITA NO. 501/JP/2023 SHRI RAJESH KUMAR BAID VS ITO, WARD 5(2), JAIPUR ITR 422 (Kerala) where in it is held that "Mere fact that audit of assessee was conducted under provisions of Co-operative Societies Act, would not be sufficient for such compliance under section 44AB, unless report of audit is furnished in prescribed form accompanied with a further report by an accountant in prescribed form. Therefore, I find no reason to interfere in the decision of the AO in levying the minimum penalty for failure to get the books audited as required u/s 44AB of the Act and not complying with the provisions of Section 139 of the Act. Penalty levied u/s 271B of the Act by the AO is confirmed. First ground of appeal is dismissed.’’ Section 271A of the Act ‘’4. The Only issue involved in appeal is penalty of Rs. 25,000/- levied by the AO u/s. 271A of the Act for not maintaining the books of accounts by the appellant. I I have carefully considered the facts of the case, grounds of appeal and submissions/SOF 4.1 I have carefully gone through the penalty order and the submissions made by the appellant against the penalty levied u/s 271A of the Act. During the course of assessment proceedings, the AO found that the appellant was engaged in the business of jewelry trading with gross receipts of Rs.20,02,550/- and also shares business and the total turnover of both the businesses was Rs.1,79,89,383/-. However, it was noticed that the assessee failed to maintain the books of accounts as required under section 44AA of the IT Act, therefore, the AO has levied penalty u/s.271A of the Act. 4.2 In the submissions made during the appellate proceedings, the appellant stated that he suffered loss from share transactions, all the records regarding share transactions were kept and maintained by the share broker and he was not aware about volume of transactions conducted during the year. He furnished all the statements maintained by the share broker regarding share transactions and argued that he was prevented by sufficient cause from maintaining the books of accounts. 7 ITA NO. 501/JP/2023 SHRI RAJESH KUMAR BAID VS ITO, WARD 5(2), JAIPUR 4.3 Penalty under Section 271A may be levied, if the assessee fails to keep and maintain any such books of account and other documents as required by Section 44A or under Rule 6F. The provisions of sub-section (2) of Section 44AA of the Act enjoin upon the assessee to keep and maintain such books of account and other documents as may enable the Assessing Authority to compute his total income in accordance with the provisions of this Act. Appellant was doing jewelry job work and share transactions and was aware of the law. After careful consideration of the submission, I am of the considered opinion that the AO has rightly levied penalty u/s.271A of Rs.25,000/- as there is failure on the part of the appellant to maintain the books of accounts and hence appeal is dismissed.’’ 2.3 In spite of the notice sent by the Tribunal, the case was not represented on behalf of the assessee when it was called for hearing. From this, it appears that the assessee is not interested to pursue his cases. So in the circumstances, following the decision of Delhi Bench of ITAT in the case of CIT Vs. Multiplan India (P) Ltd., [1991] 38 ITD 320 and also on the judgement of the Hon'ble M.P. High Court in the case of Estate of Late Tukhoji Rao Holkar Vs. CWT [1997] 223 ITR 480, the appeals of the assessee are not admitted and are dismissed in limine. 2.4 During the course of hearing, the ld. DR supported the orders of the ld. CIT(A). 2.5 The Bench further on merit heard the ld. DR and perused the materials available on record and it is found that no contrary material or written submissions concerning the above mentioned appeals had been advanced by the assessee. Hence, in such a situation, the Bench has no other alternative except to confirm the 8 ITA NO. 501/JP/2023 SHRI RAJESH KUMAR BAID VS ITO, WARD 5(2), JAIPUR orders of the ld. CIT(A). Thus the above mentioned appeals of the assessee are dismissed. 3.0 In the result, the appeals filed by the assessee are dismissed. Order pronounced in the open court on 27 /09/2023. Sd/- Sd/- ¼ jkBksM deys'k t;UrHkkbZ ½ ¼lanhi xkslkbZ½ (Rathod Kamlesh Jayantbhai) (Sandeep Gosain) ys[kk lnL;@Accountant Member U;kf;d lnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 27 /09/2023 *Mishra vkns'k dh izfrfyfi vxzsf’kr@Copy of the order forwarded to: 1. The Appellant- Shri Rajesh Kumar Baid, Jaipur 2. izR;FkhZ@ The Respondent- The ITO, Ward 5(2) Jaipur 3. vk;dj vk;qDr@ The ld CIT 4. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 5. xkMZ QkbZy@ Guard File (ITA No. 501, 494 & 494/JP/2023) vkns'kkuqlkj@ By order, Asstt. Registrar
AI Insights
The case involves three separate appeals by Shri Rajesh Kumar Baid concerning penalties imposed for the assessment year 2015-16 under various sections of the Income Tax Act. The penalties were related to the concealment of income and non-compliance with statutory requirements for auditing and maintaining books of accounts. The appeals were heard by the Income Tax Appellate Tribunal, Jaipur, which upheld the penalties after considering the submissions and the relevant legal provisions. The Tribunal found no merit in the appellant's arguments and confirmed the decisions made by the lower authorities.
