M/s. Agni Engineers, Indore V. The ITO, Indore

ITA 535/IND/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 3081 (ITAT-INDORE)
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-04-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 23-03-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 24-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARAN
• Section: 143(3)

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL, SMC BENCH, INDORE BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER ITA NO. 535/IND/2009 A.YS. 2001-02 M/S AGNI ENGINEERS INDORE PAN AACFA-2840E APPELLANT VS INCOME TAX OFFICER 3(2) INDORE RESPONDENT APPELLANT BY : NONE RESPONDENT BY : SMT. APARNA KARAN, SR. DR O R D E R THIS APPEAL IS BY THE ASSESSEES AGAINST THE ORDER O F THE LEARNED CIT(A) DATED 27.8.2009. THOUGH THE ASSESSEE HAS PR EFERRED AS MANY AS NINE GROUNDS OF APPEAL BUT, IF SUMMED UP, THE ON LY GROUND RAISED IS THAT THE LD. FIRST APPELLATE AUTHORITY ERRED IN CON FIRMING THE PENALTY OF RS.1,05,110/- U/S 271(1)(C) OF THE ACT WHICH IS ON ESTIMATE BASIS. 2. DURING HEARING OF THIS APPEAL, NONE WAS PRESENT FOR THE ASSESSEE AND SMT. APARNA KARAN, SR. DR, WAS PRESENT FOR THE REVENUE. IF THE GROUNDS ARE ANALYSED, THE CLAIM OF THE ASSESSEE IS THAT CERTAIN EXPENSES ON ESTIMATE BASIS WERE DISALLOWED BY THE A SSESSING OFFICER BY 2 PRESUMING THAT THE EXPENSES MAY HAVE ELEMENT OF PER SONAL NATURE. HOWEVER, AS PER THE ASSESSEE, NEITHER THERE IS ANY CONCEALMENT OF INCOME, NOR FURNISHING OF INACCURATE PARTICULARS. MRS. APARNA KARAN, LEARNED SR. DR, THOUGH DEFENDED THE IMPUGNED ORDER, BUT ON A QUERY FROM THE BENCH, FAIRLY AGREED THAT ONE MORE OPPORTU NITY BE PROVIDED TO THE ASSESSEE TO EXPLAIN THE TRUE FACTS. 3. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERU SED THE MATERIAL AVAILABLE ON THE FILE. IT IS SEEN THAT THE ASSESSME NT WAS COMPLETED ON 21.1.2004 U/S 143(3) OF THE ACT, DETERMINING THE TO TAL INCOME AT RS.4,70,000/-. IT WAS FOUND BY THE ASSESSING OFFIC ER THAT A SUM OF RS.6,82,970/- HAS BEEN DEBITED BY THE ASSESSEE UNDE R THE HEAD TRAVELLING EXPENSES OUT OF WHICH RS.5,00,518/- WA S ON ACCOUNT OF TRAVELLING EXPENSES INCURRED BY THE PARTNERS OF THE ASSESSEE FIRM. AS PER THE ASSESSING OFFICER, THE ASSESSEE DID NOT FURNISH ANY DETAIL TO ESTABLISH THE GENUINENESS AND ADMISSIBILITY OF THE IMPUGNED EXPENSES, CONSEQUENTLY, THE AMOUNT OF RS.3,00,310/- WAS DISAL LOWED BY INVOKING THE PROVISIONS OF SECTION 40A(2)(A) OF THE ACT AND INITIATED PENALTY PROCEEDINGS. THE QUANTUM PROCEEDINGS WERE TRAVELLED TO THE TRIBUNAL WHEREIN THE APPEAL OF THE ASSESSEE WAS DISMISSED. A FTER GETTING THE ORDER FROM THE TRIBUNAL, A NOTICE WAS ISSUED ON 18. 3.2008 BY THE ASSESSING OFFICER FOR IMPOSING PENALTY TO WHICH THE ASSESSEE PREFERRED WRITTEN SUBMISSIONS. THE CRUX OF WRITTEN SUBMISSI ONS IS THAT THE 3 DISALLOWANCES ARE ON ESTIMATE BASIS AND IT IS NOT A CASE OF CONCEALMENT OR FURNISHING OF INACCURATE PARTICULARS. HOWEVER, THE PENALTY ORDER WAS AFFIRMED BY THE LEARNED CIT(A). EVEN IN THE IMPUGN ED ORDER, THE PENALTY WAS UPHELD MERELY ON THE GROUND THAT NO ATTEMPT WAS MADE BY THE ASSESSEE TO ESTABLISH THE GENUINENESS OF EXPENSES C LAIMED ON ACCOUNT OF TRAVELLING. WITHOUT COMMENTING UPON THE FINDING, I AM OF THE CONSIDERED OPINION THAT WHEN THE DISALLOWANCE IS BA SED ON ESTIMATION, NO PENALTY SHOULD BE LEVIED AS WAS HELD BY THE PUNJ AB & HARYANA HIGH COURT IN THE CASE OF HARIGOPAL SINGH V. CIT; 258 IT R 85/125 TAXMAN 252 (P&H). HOWEVER, SINCE NOBODY WAS PRESENT FOR TH E ASSESSEE, THEREFORE, WITHOUT COMMENTING ON THE MERITS OF THE CASE, I AM OF THE VIEW THAT ONE MORE OPPORTUNITY NEEDS TO BE GIVEN TO THE ASSESSEE TO SUBSTANTIATE ITS CLAIM ESPECIALLY WHEN THERE IS A F INDING IN THE IMPUGNED ORDER THAT NO ATTEMPT WAS MADE BY THE ASSESSEE TO E STABLISH THE GENUINENESS OF EXPENSES AND ALSO THERE IS NO FINDIN G THAT EITHER THE ASSESSEE CONCEALED ITS INCOME OR FURNISHED INACCURA TE PARTICULARS OF INCOME WHICH IS THE MAIN REQUIREMENT FOR IMPOSING P ENALTY U/S 271(1)(C). EVEN OTHERWISE, QUANTUM PROCEEDINGS AND PENALTY PROCEEDINGS ARE ALTOGETHER DIFFERENT AND THE POWERS OF IMPOSING PENALTY HAVE TO BE USED JUDICIOUSLY BY THE ASSESSING OFFICE R. IN VIEW OF THESE FACTS, THIS APPEAL OF THE ASSESSEE IS REMANDED BACK TO THE FILE OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FOR FR ESH ADJUDICATION IN 4 ACCORDANCE WITH LAW. NEEDLESS TO MENTION HERE THAT DUE OPPORTUNITY OF HEARING BE PROVIDED TO THE ASSESSEE TO EXPLAIN THE TRUE FACTS. THE ASSESSEE IS ALSO AT LIBERTY TO FURNISH EVIDENCE, IF ANY, TO SUBSTANTIATE ITS CLAIM. CONSEQUENTLY, THIS APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF L EARNED SENIOR DEPARTMENTAL REPRESENTATIVE AT THE CONCLUSION OF TH E HEARING ON IST APRIL, 2010. (JOGINDER SINGH) JUDICIAL MEMBER IST APRIL, 2010 COPY TO: APPELLANT, RESPONDENT, CIT, CIT(A), DR, G UARD FILE *DBN/