Shri Dinesh L.Mali, Baroda V. The ACIT.,Circle-2(1), Baroda

ITA 574/AHD/2012

• Counselvise Citation: 57420514 RSA 2012
• Duration Of Justice: 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-07-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 08-05-2012
• Assessment Year: 2007-2008
• Appeal Filed On: 06-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B L YADAV SRDR
• Assessee Lawyers: MRS URVASHI SHODHAN
• Keywords: Revised return
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH D AHMEDABAD BEFORE SHRI, A.K.GARODIA, ACCOUNTANT MEMBER AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA NO.574/AHD/2012 ASSESSMENT YEAR:2007-08 SHRI DINESH L MALI PROP. GANESH ENGINEERING, 297/B, GIDC, MAKARPURA, BARODA 390 010 PAN NO.AGDPM4851G V/S . ACIT, CIRCLE-2(1), BARODA (APPELLANT) .. (RESPONDENT) /BY APPELLANT MRS. URVASHI SHODHAN, AR /BY RESPONDENT SHRI B.L. YADAV, SR-DR /DATE OF HEARING 08-05-2012 /DATE OF PRONOUNCEMENT 13-07-2012 O R D E R PER KUL BHARAT, JUDICIAL MEMBER:- THIS PRESENT APPEAL OF THE ASSESSEE IS DIRECTED AG AINST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS)-II, BAROAD DAT ED 06-01-2012 FOR THE ASSESSMENT YEAR 2007-08. THE PENALTY UNDER DISPUTE WAS LEVIED BY THE ACIT, CIRCLE-2(1) BARODA U/S. 271(1)(C) OF THE INCOME-TAX ACT, (HEREINAFTER REFERRED TO AS THE ACT) VIDE HIS ORDER DATED 30-06-2010. THE ASSESSEE HAS RAISED ONLY GROUND WHICH IS REPRODUCED AS UNDER:- 1. THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING PENALTY LEVIED U/S 271(1)(C) OF THE ACT OF RS.11,10,460/- O N ADDITIONAL INCOME SUO MOTTO OFFERED BY THE APPELLANT ON RECASTING OF THE PROFIT & LOSS ACCOUNTS DUE TO POOR ACCOUNTING. BOTH THE LOWER AUT HORITIES IS IGNORED THE FACT THAT THE ADDITIONAL INCOME INCLUDING DISCL OSURE MADE DURING ITA NO.574/AHD/2012 A.Y. 2007-08 SH DINESH L MALI V. ACIT, CIR-2(1) BRD PAGE 2 SURVEY PROCEEDINGS WAS ACCEPTED BY AO IN TOTO IN AB SENCE OF ANY INCRIMINATING MATERIAL FOUND FOR THE YEAR UNDER CON SIDERATION. THE PENALTY LEVIED BEING WITHOUT ANY MERITS AND JUSTIFI CATION DESERVES TO BE QUASHED. 2. THE FACTS IN BRIEF ARE THAT THE ASSESSEE IS ENGA GED IN THE BUSINESS OF MANUFACTURING OF AIR VENTILATOR WITH FRP BASE IN TH E NAME AND STYLE M/S GANESH ENGINEERING. THE ASSESSEE FILED ITS RETURN OF INCOME ON -7-11-2007 DECLARING TOTAL INCOME OF RS.6,25,530/- TOGETHER WI TH PROFIT AND LOSS ACCOUNT, BALANCE-SHEET AND AUDIT REPORT IN FORM NO. 3CB. THE RETURN WAS PROCESSED U/S 143(1) OF THE ACT. SUBSEQUENTLY, A SURVEY ACTIO N U/S 133A OF THE ACT WAS CARRIED OUT AT THE BUSINESS PREMISES OF THE ASSESSE E ON 18-06-2009. DURING THE COURSE OF SURVEY ACTION CERTAIN DISCREPANCIES W ERE NOTICED. THEREAFTER THE ASSESSEE FILED REVISED INCOME OFFERING TOTAL INCOME OF RS.74,63,607/-DURING THE YEAR UNDER CONSIDERATION. THE ASSESSMENT U/S 14 3(3) OF THE ACT WAS FINALIZED ON 29-12-2009 DETERMINING TOTAL INCOME OF RS.74,63,607/- BY MAKING ADDITION ON ACCOUNT OF DIFFERENCE IN RATE OF VALUAT ION OF STOCK OF RS.31,262/- PENALTY U/S 271(1)(C) OF THE ACT WAS INITIATED AND LEVIED BY AO ON 30-06-2010. THE ASSESSEE FEELING AGGRIEVED BY THE ORDER OF ASSE SSING OFFICER DATED 30- 12-2009 CARRIED THE MATTER BEFORE LD. CIT(A) WHO AL SO CONFIRMED THE LEVY OF PENALTY. 3. NOW, ASSESSEE FEELING AGGRIEVED BY THE ORDER OF LD. CIT(A) FIELD SECOND APPEAL BEFORE US. 4. THE LD. AUTHORIZED REPRESENTATIVE OF THE ASSESSE E BEFORE US SUBMITTED THAT IT IS THE CASE OF POOR-ACCOUNTING AND THE ASSE SSEE HAD DULY REVISED THE STATEMENT OF ACCOUNT AND DURING THE COURSE OF ASSES SMENT PROCEEDINGS AND ON THE BASIS OF REVISED FINANCIAL STATEMENT FOR THE YEAR UNDER CONSIDERATION OFFERED DIFFERENCE AMOUNT FOR TAXATION. THE ASSESSE E HAS SHOWN INCREASE NET PROFIT OF RS.40,23,114/- AS AGAINST NET PROFIT OF R S.7,18,116/-. LD. AR OF THE ASSESSEE RELIED UPON THE FOLLOWING JUDGMENTS:- ITA NO.574/AHD/2012 A.Y. 2007-08 SH DINESH L MALI V. ACIT, CIR-2(1) BRD PAGE 3 I) SUDARSHAN SILKS & SARES V. CIT 216 CTR 12 & 300 ITR 205 II) CIT V. SURESH CHANDRA MITTAL 170 CTR 182 (SC) III) AMIR CHAND V. ITO 48 TTJ 308 (DEL) IV) MAYAUR ROADWAYS V. ITO SHE FURTHER SUBMITTED THAT PENALTY PROCEEDINGS ARE DISTINGUISHED FROM THE ASSESSMENT PROCEEDINGS AND ASSESSEE HAS SHOWN HIS B ONA FIDE BY OFFERING THE DIFFERENCE AMOUNT FOR TAXATION AND ALSO HAS NOT FILED ANY APPEAL AGAINST THE ASSESSMENT ORDER. SHE SUBMITTED THAT THE FACTS OF THE PRESENT CASE, WARRANTS A LIBERAL VIEW, AS FOR THE FAULT OF THE AC COUNTANT, THE ASSESSEE CAN NOT BE SUBJECTED TO PENALTY. 5. ON THE CONTRARY, LD SR-DEPARTMENTAL REPRESENTATI VE FOR THE REVENUE CONTENDED THAT THE ACCOUNTS ARE REVISED ONLY AFTER THE SURVEY ACTION AND ASSESSEE IN FACT, HAS NOT FILED ANY REVISED RETURN BEFORE THE TIME-LIMIT FOR FILING OF REVISED RETURN. ON REJOINDER LD. AR OF THE ASSES SEE SUBMITTED THAT THIS IS NOT THE CASE WHERE A DELIBERATE ATTEMPT WAS MADE FO R THE PURPOSE OF EVASION OF TAX BUT IN FACT, IT WAS DUE TO THE MISTAKE OF TH E ACCOUNTANT AND THE ENTIRE ACCOUNTS WERE SUBSEQUENTLY RE-CASTED AND DIFFERENCE AMOUNT WAS OFFERED FOR TAX. 6. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL ON RECORD AND THE JUDGMENTS CITED BY THE LEARNED AUTHORIZED R EPRESENTATIVE. WE FIND THAT LD. CIT(A) HAS UPHELD AND CONFIRMED PENALTY IM POSED BY ASSESSING OFFICER ON THE BASIS THAT DURING SURVEY PROCEEDINGS THE EXCESS STOCK RELATING TO A.Y. 2010-11 AND UNEXPLAINED LIABILITY RELATING TO A.Y. 2008-09 WERE FOUND AND FACTUM OF THE POOR-ACCOUNTING WAS ADMITTED BY T HE ASSESSEE WHICH IS MATERIAL FACT FOR OFFERING OF DIFFERENTIAL ADDITION AL INCOME. IT IS NOT CONTROVERTED BY THE LD. DR OF THE REVENUE THAT THE DIFFERENTIAL ADDITIONAL INCOME WAS OFFERED TO TAX AND FACTUM OF POOR-ACCOUNTING IS ALS O NOT DISPUTED. IN VIEW OF THE PECULIAR FACTS OF CIRCUMSTANCES OF THE PRESENT CASE, IN OUR CONSIDERED OPINION, THE ASSESSEE HAS DEMONSTRATED THAT IT WAS A MISTAKE OF THE ITA NO.574/AHD/2012 A.Y. 2007-08 SH DINESH L MALI V. ACIT, CIR-2(1) BRD PAGE 4 ACCOUNTANT WHICH LED TO POOR-ACCOUNTING, THEREBY TH E ACCOUNTING RESULTS WERE BADLY AFFECTED. UNDER SUCH CIRCUMSTANCES, LEVY OF P ENALTY WOULD BE VERY HARSH. THEREFORE, WE HEREBY DIRECT THE ASSESSING OF FICER TO DELETE THE PENALTY. THIS GROUND OF ASSESSEES APPEAL IS ALLOWED. 7. IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE AT CAPTION PAGE. SD/- SD/- (A.K.GARODIA) (KUL BHARAT) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) AHMEDABAD, *DKP - 13/07/2012 ()* + ,- ,- ,- ,- ../ ../ ../ ../ 0/ 0/ 0/ 0/ / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. *.2 , ,3 / CONCERNED CIT 4. , ,3- / CIT (A) 5. /67 ...2, , .2 , ()* / DR, ITAT, AHMEDABAD 6. 7:; <= / GUARD FILE. BY ORDER/ ,- , /TRUE COPY/ >/ ( ? , .2 , ()* + STRENGTHEN PREPARATION & DELIVERY O F ORDERS IN THE ITAT 1) DATE OF TAKING DICTATION 06/07 2) DIRECT DICTATION BY MEMBER STRAIGHT ON COMPUTER/LAPTOP/DRAGON DICTATE NO 3) DATE OF TYPING & DRAFT ORDER PLACE BEFORE MEMBER 06/07 4) DATE OF CORRECTION 11/07 5) DATE OF FURTHER CORRECTION 12/07, 12/07 6) DATE OF INITIAL SIGN BY MEMBERS 12/07 7) ORDER UPLOADED ON 13/07 8) ORIGINAL DICTATION PAD-PART HAS BEEN ENCLOSED IN THE FILE YES 9) FINAL ORDER AND 2 ND COPY SEND TO BENCH CLERK ON 13/07