Jhantu Ghosh, Burdwan V. I.T.O.,Ward-1(4), Burdwan

ITA 581/KOL/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8260 (ITAT-KOLKATA)
• Duration Of Justice: 9 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 25-03-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: DEBI PRASAD JANA
• Section: 44AD; 274; 139(1); 44AB; 147; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL C, BENCH KO LKATA BEFORE SHRI A. T. VARKEY, JM & DR. A.L. SAINI, AM ITA NO.581/KOL/2019 (ASSESSMENT YEAR: 2012-13) JHANTU GHOSH C/O. SN GHOSH & ASSOCIATES, ADVOCATES, SEBEN BROTHERS LODGE, P.O. BUROSHIBTALA, P.S CHINSURAH, DIST- HOOGHLY. VS. ITO, WARD-1(4), BWN ./ ./PAN/GIR NO. : AQUPG3689B ( /APPELLANT ) .. ( / RESPONDENT ) APPELLANT BY : SHRI SOMNATH GHOSH & DEBI PRASAD JANA, ADVOCATE RESPONDENT BY : SHRI SUPRIYO PAL, JCIT, SR. DR / DATE OF HEARING : 17/12/2019 /DATE OF PRONOUNCEMENT : 23/01/2020 / O R D E R PER DR. A. L. SAINI, AM: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERTAIN ING TO ASSESSMENT YEAR 2012-13, IS DIRECTED AGAINST THE ORDER PASSED BY TH E LD. COMMISSIONER OF INCOME TAX(APPEALS), BURDWAN, DATED 25.02.2019, WHICH IN T URN ARISES OUT OF A PENALTY ORDER PASSED BY ASSESSING OFFICER U/S 271A OF THE I NCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT), DATED 05.02 .2018. 2. THE SOLITARY GRIEVANCE OF THE ASSESSEE IN THIS A PPEAL IS THAT THE LD COMMISSIONER OF INCOME TAX (APPEALS)-BURDWAN FAILED TO APPRECIATE THAT NONE OF THE CONDITIONS PRECEDENT REQUIRED TO BE SATISFIE D FOR THE ASSUMPTION OF JURISDICTION U/S. 274 READ WITH S. 271A OF THE INCO ME TAX ACT, 1961 EXISTED AND/OR HAVE BEEN COMPLIED WITH AND/OR FULFILLED IN THE INSTANT CASE BY THE LD. INCOME TAX OFFICER, WARD 1(4). BURDWAN AND HIS SPEC IOUS ACTION IN UPHOLDING THE IMPUGNED ORDER DATED 05-02-2018 IMPOSING PENALT Y IN THE SUM OF RS. 25,000/- IN PURSUANCE TO THE IMPUGNED NOTICE DATED 30-08-2017 IS AB INITIO VOID AND EX-FACIE NULL IN LAW. ITA NO.581/KOL/2019 JHANTU GHOSH 2 3. BRIEF FACTS QUA THE ISSUE ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND IS ENGAGED IN THE TRADING BUSINESS OF BABY FOOD PRODUCTS IN THE NAME AND STYLE OF 'GHOSH VARIETY STORES'. THE ASSESSEE HAD NOT FILED ANY RETURN OF INCOME U/S 139(1) OF THE INCOME TAX ACT, 1961 SINCE HIS INCOME DID NOT EXCEED THE BASIC LIMIT. SU BSEQUENTLY, THE LD. INCOME TAX OFFICER, WARD 1(4), BURDWAN GOT INFORMATION FROM TH E LD. INCOME TAX OFFICER (INTELLIGENCE & CRIMINAL INVESTIGATION), DURGAPUR T HAT THE CASH DEPOSITS OF RS. 1,17,11,217/- IN ASSESSEE`S BANK ACCOUNT WERE HIS S ALE PROCEEDS WHICH HAS ESCAPED ASSESSMENT WITHIN THE MEANING OF SECTION 147 OF THE ACT AND ACCORDINGLY, A NOTICE DATED 28.03.2017 WAS ISSUED U/S 148 OF THE INCOME TAX ACT , 1961 TO THE ASSESSEE. IN COMPLIANCE THEREOF, THE ASSESSEE HAD DULY FILED A R ETURN U/S 148 OF THE ACT ON 28-04- 2017 DISCLOSING THE INCOME AT RS. 1,73,990/- FOR TH E ASSESSMENT YEAR UNDER CONSIDERATION. IN THE COURSE OF THE ASSESSMENT PROC EEDINGS, THE LD. ASSESSING OFFICER WAS OF THE VIEW THAT SINCE THE ASSESSEE HAD NEITHER PRODUCED ANY BILLS AND VOUCHERS OR BOOKS OF ACCOUNTS IN SUPPORT OF THE RETURN, HE RESO RTED TO ESTIMATE A SUM OF RS. 9,36,897/- BEING 8% OF THE TOTAL SALE PROCEEDS OF R S. 1,17,11,217/- AS THE TOTAL UNDISCLOSED INCOME OF THE ASSESSEE FOR THE ASSESSME NT YEAR UNDER CONSIDERATION IN THE ASSESSMENT ORDER FRAMED U/S. 147/143(3) OF THE ACT ON 30-08-2017. THEREAFTER, LD. ASSESSING OFFICER ISSUED PENALTY NO TICE U/S. 271A OF ACT ON 30-08-2017 AND SUBSEQUENTLY, AN ORDER DATED 05-02-2018 WAS PAS SED BY HIM U/S 271A OF THE INCOME TAX ACT, 1961 IMPOSING PENALTY OF RS. 25,000/-. THE BRIEF FINDING OF THE AO WHILE IMPOSING PENALTY U/S 271A IS GIVEN BELOW: THE ASSESSEE HAS, IT MAY THEREFORE BE CONCLUDED, FAILED TO OFFER ANY ACCEPTABLE EXPLANATION WITH REGARD TO HIS FAILURE OF NON-MAINT ENANCE OF BOOKS OF ACCOUNTS AS PER PROVISIONS OF SECTION 44AA OF THE I.T. ACT, 61... THUS, ASSESSING OFFICER IMPOSED PENALTY U/S 271A OF RS. 25,000/- ON ACCOUNT OF NON- MAINTENANCE OF BOOKS OF ACCOUNTS. 4. AGGRIEVED BY THE ORDER OF ASSESSING OFFICER, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS CONFIRMED THE PENALTY IMPOSED BY THE ASSESSING OFFICER. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE US. ITA NO.581/KOL/2019 JHANTU GHOSH 3 5. THE LD. COUNSEL REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW WHEREAS THE LD. DR HAS PRIMARILY REITERATED THE STAND TAKEN BY THE ASSESSING OFFICER WHICH WE HAVE ALREADY NOTED IN OUR EARLIER PARA AND THE SAME IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 6. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIALS AVAILABLE ON RECORD. WE NOTE THAT IT IS AN ACCEPTED POSITION THAT THE STATU TORY PRESCRIPTION CONTAINED IN THE PROVISION OF SECTION 44AA OF THE INCOME TAX ACT 1961, MANDATES THAT AN ASSES SEE IS REQUIRED TO MAINTAIN REGULAR BOOKS OF ACCOUNTS AS U NDERSTOOD IN COMMERCIAL PARLANCE SO AS TO ENABLE THE ASSESSING AUTHORITY TO COMPUTE THE TOTAL INCOME FOR THE CONCERNED ASSESSMENT YEAR. IT IS ALSO AN ADMITTED POSITION TH AT THE MANDATE OF SECTION 271A OF THE INCOME TAX ACT, 1961 IS THAT IN CASE OF FAILURE TO KEEP AND MAINTAIN ANY SUCH BOOKS OF ACCOUNTS AND OTHER DOCUMENTS BY AN ASSESSEE AS REQU IRED U/S. 44AA OF THE ACT AND THE RULES FRAMED THEREUNDER, PENALTY IN THE SUM OF RS. 25,000/- WILL BE IMPOSED UPON HIM. WE NOTE THAT IN THE ASSESSEE`S CASE UNDER CONSIDER ATION, THE ASSESSEE HAD KEPT AND MAINTAINED REGULAR BOOKS OF ACCOUNTS WHICH WERE CON SIDERED BY THE LD. ASSESSING OFFICER IN THE ASSESSMENT ORDER FRAMED BY HIM. IN F ACT, THE AUDITOR ACTING U/S. 44AB OF THE ACT HAS ALSO CATEGORICALLY AFFIRMED THE MAINTEN ANCE OF BOOKS OF ACCOUNTS BY THE ASSESSEE. THE AUDITOR ACTING AS AN INDEPENDENT STAT UTORY AUTHORITY HAS REPORTED IN HIS AUDIT REPORT DATED 10.06.2012, IN FORM NO. 3CB AS F OLLOWS: 'I/WE CERTIFY THAT THE BALANCE SHEET AND THE PROFI T AND LOSS ACCOUNT ARE IN AGREEMENT WITH THE BOOKS OF ACCOUNT MAINTAINED AT THE HEAD OF FICE AT....; IT IS ABUNDANTLY CLEAR THAT WITHOUT BOOKS OF ACCOUN TS, BALANCE SHEET AND THE PROFIT AND LOSS ACCOUNT CANNOT BE PREPARED AND AUDIT U/S 44AB IS NOT POSSIBLE BY THE CHARTERED ACCOUNTANT. THIS PROVES THAT ASSESSEE WAS MAINTAINI NG BOOKS OF ACCOUNTS. 7. WE NOTE THAT IN FORM NO. 3CD DATED 10-06-2012 (A UDIT REPORT OF CA), THE AUDITOR HAD STATED THAT HE HAD EXAMINED THE CASH BOOK AND L EDGER BOOK (COMPUTER SYSTEM) OF THE ASSESSEE. THE SOLE BONE OF CONTENTION OF THE LD . ASSESSING OFFICER IS THAT THE SUPPORTING DOCUMENTS IN RELATION TO THE BOOKS OF AC COUNTS AS WELL AS THE BILLS AND ITA NO.581/KOL/2019 JHANTU GHOSH 4 VOUCHERS WERE NOT PRODUCED BY THE ASSESSEE FOR WHIC H HE PROCEEDED TO APPLY THE PROVISIONS OF SECTION 44AD (PRESUMPTIVE BASIS ) OF THE ACT IN THE CIRCUMSTANCES OF THE INSTANT CASE. IN OTHER WORDS, THE KEEPING AND MAINT ENANCE OF THE BOOKS OF ACCOUNTS AND/OR RETAINING THEREOF IS NOT DISPUTED BY THE LD. ASSESSING OFFICER. HIS ONLY PLIGHT IS THAT THE HE IS UNABLE TO COMPUTE THE INCOME OF THE ASSESSEE FOR THE ALLEGED FAILURE TO PRODUCE BILLS AND VOUCHERS AND/OR THE BOOKS OF ACCO UNTS IN THE TEETH OF THE CATEGORICAL FINDING THAT 'NECESSARY DETAILS HAVE BEEN CALLED FOR AND THE EVI DENCES, EXPLANATIONS, REPORTS AND CROSS-REFERENCES AS ON RECORD HAVE BEEN CONSIDERED AND ASSESSMENT IS BEING MADE ACCORDINGLY.' AS PER THE FACTS NARRATED IN THE ASSESSMENT ORDER, IT IS QUITE CLEAR THAT ASSESSEE WAS MAINTAINING BOOKS OF ACCOUNTS THE REFORE PENALTY U/S 271A SHOULD NOT BE IMPOSED. THUS, THE WHOLE IDEA TO INVOKE THE MISC HIEF OF SECTION 44AA OF THE ACT IN THE INSTANT CASE IS DEVOID OF ANY LEGALITY. THEREF ORE, BASED ON THIS FACTUAL POSITION WE DELETE THE PENALTY OF RS.25,000/- IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 23/01/20 20. SD/- (A. T. VARKEY) SD/- (A. L. SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; DATED: 23 /01/2020 RS, SR.PS / COPY OF THE ORDER FORWARDED TO : 1. / THE ASSESSEE- JHANTU GHOSH 2. / THE RESPONDENT.- ITO, WARD-1(4), BWN 3. ( ) / THE CIT(A), 4. / CIT 5. ! $$% , % , / DR, ITAT, KOLKATA 6. ( / GUARD FILE. //TRUE COPY// BY ORDER ASSISTANT REGISTRAR, I.T.A.T, KOLKATA BENCHES, KOLKATA . ITA NO.581/KOL/2019 JHANTU GHOSH 5