Sh. Dinesh Kumar, Faridabad V. ITO, Faridabad

ITA 5586/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 97640 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 11 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 12-10-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 17-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: MRS TRIPTI GOEL
• Keywords: Reasonable cause; Non compliance
• Section: 273B; 142(1); 27

Judgement Text

PAGE 1 OF 4 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SH. A.T.VARKY, JM AND SH. PRASHANT MAHARIS HI, AM ITA NO. 5586/DEL/2013 ASSESSMENT YEAR: 2005-06 DINESH KUMAR S/O SH. RANJEET SINGH PROP. M/S DINESH & CO., HOUSE NO. 670, SECTOR-28, FARIDABAD VS ITO WARD 1(2), FARIDABAD (APPELLANT) (RESPONDENT) PAN : AKXPK6603N ASSESSEE BY MRS. TRIPTI GOEL, CA REVENUE BY SHRI HEMANT GUPTA, SR. DR DATE OF HEARING : 12.10.2015 DATE OF PRONOUNCEMENT : 14 .10.2015 ORDER PER PRASHANT MAHARISHI, AM: 01. THIS APPEAL IS FILED BY ASSESSEE AGAINST THE ORDER OF CIT (A), FARIDABAD DATED 22.06.2013 CONFIRMING PENALTY U/S 271(1) (B) OF THE INCOME TAX ACT ( THE ACT) OF RS 10.000/-. 02. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE IS AN IND IVIDUAL CARRYING ON BUSINESS OF RUNNING OF TRUCKS. HE FILED HIS RETURN OF INCOME ON 25.10.2005 SHOWING INCOME OF RS 153560/-. HIS CASE WAS SELECTED FOR SC RUTINY AND IN ASSESSMENT PROCEEDINGS HE WAS ASKED TO PRODUCE BOOKS OF ACC OUNTS FOR WHICH HE REPLIED THAT THERE IS CHANGE IN ACCOUNTANT AND OLD ACCOUNTANT HAS RAN AWAY WITH THE BOOKS OF ACCOUNTS, THEREFORE HE IS UNABLE TO PRODUCE THE SAME. HENCE, AO PASSED ASSESSMENT ORDER U/S 143 (3) OF THE ACT DETERMINING TOTAL INCOME OF RS 875100/- MAKING ADDITION TO THE TOTAL INCOME. HE FURTHER INITIATED PENALTY PROCEEDINGS U/S 271(1) (B) OF THE ACT FOR NOT MAINTAINING BOOKS OF ACCOUNTS AND NON COMPLIANCE WITH NOTICE U/ S 142(1) OF THE ACT PAGE 2 OF 4 ISSUED ON 10.12.2007. IN RESPONSE TO THAT NOTICE AS SESSEE DID NOT SUBMIT ANY REASONABLE CAUSE BUT PLEADED THAT APPEAL BEFORE CIT (A) IS PENDING. HENCE AO LEVIED PENALTY OF RS 10,000/- U/S 271(1) (B) OF THE ACT. AGAINST THIS ORDER ASSESSEE PREFERRED AN APPEAL BEFORE CIT (A) WHO IN TURN CONFIRMED THE PENALTY AND THEREFORE ASSESSEE HAS FILED THIS APPEA L. 03. LD AR OF THE ASSESSEE SUBMITTED THAT THERE WAS A CHANGE IN THE ACCOUNTANT AND OLD ACCOUNTANT RAN AWAY WITH THE BOOKS OF ACC OUNTS AND THEREFORE ASSESSEE COULD NOT PRODUCE SAME BEFORE AO. SHE FURT HER SUBMITTED THAT TAX AUDIT REPORT WAS FURNISHED BY THE ASSESSEE WHICH AR E AUDITED THEREFORE THE BOOKS OF ACCOUNTS WERE IN EXISTENCE BUT AS THE SAME WERE IN POSSESSION OF THE ACCOUNTANT, ASSESSEE COULD NOT PRODUCE THE SAME . SHE THEREFORE PLEADED THAT THERE WAS A REASONABLE CAUSE FOR NON COMPLIA NCE AND PENALTY IS ERRONEOUSLY LEVIED BY AO AND CONFIRMED BY CIT (A). 04. LD DR RELIED ON THE ORDER OF LOWER AUTHORITIES. 05. WE HAVE CAREFULLY CONSIDERED THE RIVAL CONTENTION A ND ORDERS OF LOWER AUTHORITIES. IN THIS CASE AO HAS TREATED THE NON PRODUCTION OF BOOKS OF ACCOUNTS BY THE ASSESSEE AS NON COMPLIANCE OF NOTIC E U/S 142(1) AND THEREFORE HAS HELD THAT THERE IS A FAILURE U/S 27 1(1) (B) OF THE ACT AND NO EXPLANATION WAS FURNISHED BY ASSESSEE THE PENALTY WAS LEVIED OF RS 10,000/. CIT (A) ALSO CONFIRMED THE PENALTY HOLDING THAT T HERE WAS A FAILURE ON THE PART OF ASSESSEE IN NON PRODUCTION OF BOOKS OF ACCO UNTS DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THUS ASSESSEE HAS FAILED TO COMPLY WITH THE NOTICES U/S 142(1) OF THE ACT. WE ALSO CONCUR WITH THE OP INION OF LOWER AUTHORITIES THAT THERE IS A FAILURE ON PART OF THE ASSESSEE IN NOT PRODUCING THE BOOKS OF ACCOUNTS WHICH IS ASKED FOR BY AO BY ISSUING VARIOU S NOTICES. HOWEVER BOTH THE LOWER AUTHORITIES LOST SIGHT OF THE PROVISIONS OF SECTION 273B OF THE ACT WHICH PROVIDES THAT CERTAIN SPECIFIED PENALTY DEFAU LTS CANNOT BE IMPOSED ON ASSESSEE IF THE ASSESSEE SHOWS THAT THERE WAS A REA SONABLE CAUSE FOR THE SAID FAILURE. IN THIS CASE THE ASSESSEE HAS REPEATEDLY S TATED THAT THERE WAS A CHANGE IN THE ACCOUNTANT AND OLD ACCOUNTANT HAS RAN AWAY WITH THE BOOKS OF ACCOUNTS AND THEREFORE THE ASSESSEE WAS NOT IN A PO SITION TO SUBMIT THE BOOKS OF ACCOUNTS OF THE BUSINESS BEFORE AO. THIS FACT WA S SUBMITTED BEFORE AO IN RESPONSE TO THE NOTICE ASKING FOR THE BOOKS OF ACCO UNTS. THEREFORE IT IS ALSO NOT THE CASE THAT ASSESSEE HAS NOT EXPLAINED THE RE ASON THAT WHY IT IS NOT IN A POSITION TO SUBMIT / PRODUCE THE BOOKS OF ACCOUNTS. IN FACT THE BOOKS OF PAGE 3 OF 4 ACCOUNTS WERE MAINTAINED BY THE ASSESSEE IS AN UNCO NTROVERTED FACT AND ASSESSEE SUBMITS THAT IT FAILED TO SUBMIT/ PRODUCE THE BOOKS OF ACCOUNTS BEFORE AO BECAUSE IT WAS NOT IN POSSESSION OF ASSES SEE BUT WITH THE OLD ACCOUNTANT. FURTHER DURING ASSESSMENT PROCEEDINGS A SSESSEE HAS ATTENDED AND SUBMITTED THE EXPLANATION FOR THE SAME. THEREFO RE WE ARE OF THE VIEW THAT THERE WAS A REASONABLE CAUSE FOR THE ALLEGED D EFAULT FOR WHICH NO PENALTY CAN BE LEVIED ON THE ASSESSEE. IN THE RESULT WE ARE OF THE VIEW THAT AO AND CIT (A) ERRED IN LEVYING AND CONFIRMING THE PENALTY RESPECTIVELY AND HENCE WE CANCEL THE PENALTY LEVIED OF RS 10,000/- ON ASSE SSEE U/S 271(1) (B) OF THE ACT. 06. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 14/10/2015.) SD/- SD/- (A.T.VARKEY) (PRASHANT MAHARISHI) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 14 /10/2015 *B. RUKHAIYAR* COPY FORWARDED TO: 1. APPELLANT A 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR.ITAT AR, ITAT PAGE 4 OF 4 DATE INITIAL 1. DRAFT DICTATED ON 12/10/2015 2. DRAFT PLACED BEFORE AUTHOR 12/10/2015 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON 7. FILE SENT TO THE BENCH CLERK 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.