The Market Committee, Rohtak V. ACIT, Rohtak circle, Rohtak

ITA 5545/DEL/2018

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 7485 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 6 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-03-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2014-2015
• Appeal Filed On: 26-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 273B; 12AA; 271B; 44AB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI BENCH: ‘G’, NEW DELHI BEFORE SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND DR. BRR KUMAR, ACCOUNTANT MEMBERR ITA Nos. 5545 & 5546/Del/2018 Assessment Year: 2014-15 The Market Committee, New Grain Market, Rohtak (Haryana) PIN: 124001 Vs. ACIT, Rohtak PAN :AADFT7875R (Appellant) (Respondent) ORDER PER SAKTIJIT DEY: JUDICIAL MEMBER: Captioned appeals by the assessee arise out of two separate orders, both dated 20.06.2018, of learned Commissioner of Income- Tax(Appeals), Rohtak, confirming the penalty imposed under Section 271B of the Income-Tax Act, 1961 for assessment year 2014-15. Appellant by N o n e Respondent by Shri Umesh Takyar, Sr. DR Date of hearing 07.03.2022 Date of pronouncement 16.03.2022 ITA Nos.5545 & 5546/Del.2016 2. Briefly the facts are, assessee is a local authority and is registered under Section 12AA of the Act. Basically, the assessee is engaged in regulating the marketing of agricultural produce and profit on food grains, visiting market for collection of fees from vegetable commission agents, food grains agents and others. For the assessment years under appeal, the assessee filed its return of income, declaring nil income. In course of assessment proceedings, Assessing Officer noticed that though the assessee was required to get its accounts audited under Section 44AB of the Act and file the audit report along with its return of income, however, the assessee failed to do so. Thus, he issued show-cause-notice to the assessee requiring to explain why proceedings for imposition of penalty under Section 271B of the Act, should not be initiated. After initiating proceedings under Section 271B of the Act, the Assessing Officer ultimately passed orders imposing penalty of Rs.1,50,000 under Section 271B of the Act in both the cases. Though, the assessee challenging imposition of penalty before first appellate authority, however, it was unsuccessful. 3. When the appeals were called for hearing, none appeared on behalf of the assessee. Therefore, we proceed to dispose of these appeals ex parte qua the assessee after hearing the learned senior ITA Nos.5545 & 5546/Del.2016 departmental representative and based on material available on record. 4. We have considered the submissions of the learned departmental representative and perused the material on record. Undisputedly, assessee is a market committee and has been granted registration under Section 12AA of the Act. It is also not disputed that assessee’s income is exempt under Section 10(26AAB) of the Income-Tax Act, 1961. It is observed, before the departmental authorities, while responding to the show-cause-notice issued for imposition of penalty under Section 271B of the Act, the assessee had submitted that since there was no income to be computed under the head “profit of business and profession”, there was no requirement for the assessee to get its accounts audited under Section 44AB of the Act. 5. Apparently, the aforesaid contention of the assessee has not found favour with the departmental authorities. However, non- acceptance of assessee’s explanation, ipso facto, cannot lead to imposition of penalty under Section 271B of the Act. This is so because, section 271B of the Act is subject to the provisions of Section 273B of the Act. Therefore, if the assessee can satisfactorily explain that the default committed was not due to any deliberate ITA Nos.5545 & 5546/Del.2016 laches or defiance of statutory provisions but due to bona fide belief, no penalty can be imposed. In the facts of the present case, considering that entire income of the assessee is exempt under Section 10(26AAB) of the Act and there is no income to be computed under the head “profit of business and profession”, in our view, assessee’s contention that the accounts were not required to be audited under Section 44AB of the Act is a bona fide claim. In any case of the matter, in the peculiar facts of the case, whether the accounts required to be audited, at least, is a debatable issue. That being the case, in our considered opinion, imposition of penalty under Section 271B of the Act is not justified. Accordingly, we delete the penalty imposed in both the appeals. Grounds are allowed. 6. In the result, both the appeals are allowed. Order pronounced in the open court on 16 th March, 2022 Sd/- Sd/- (DR. BRR KUMAR) (SAKTIJIT DEY) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 16 th March, 2022. Mohan Lal Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR ITA Nos.5545 & 5546/Del.2016 Asst. Registrar, ITAT, New Delhi Sl. No. Particulars Date 1. Date of dictation (Order drafted through Dragon software): 07.03.2022 2. Date on which the draft of order is placed before the Dictating Member: 3. Date on which the draft of order is placed before the other Member: 07.03.2022 4. Date on which the approved draft of order comes to the Sr. PS/PS: 07.03.2022 5. Date of which the fair order is placed before the Dictating Member for pronouncement: 6. Date on which the final order received after having been singed/pronounced by the Members: 16.03.2022 7. Date on which the final order is uploaded on the website of ITAT: 8. Date on which the file goes to the Bench Clerk 07.03.2022 9. Date on which files goes to the Head Clerk: 10. Date on which file goes to the Assistant Registrar for signature on the order: 11. Date of dispatch of order: