M/s Agriculture Produce Market Committee, Solan V. DCIT, Parwanoo

ITA 60/CHANDI/2015

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 90234 (ITAT-CHANDIGARH)
• Duration Of Justice: 6 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 14-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 12-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PASS ROAD SOLAN PAN AAALMD
• Keywords: Bonafide belief; Reasonable cause
• Section: 148; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI T.R.SOOD, ACCOUNTANT MEMBER ITA NOS. 60 & 61/CHD/2015 A.Y: 2007-08 & 2008-09 THE AGRICULTURE PRODUCE V THE DCIT, MARKET COMMITTEE, CIRCLE, (THROUGH ITS SECRETARY), PARWANOO. BY PASS ROAD, SOLAN. PAN: AAALM0643D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI KULWANT CHAUHA N RESPONDENT BY : DR. AMAR VEER SINGH DATE OF HEARING : 14.07.2015 DATE OF PRONOUNCEMENT : 15.07.2015 O R D E R PER BHAVNESH SAINI,JM BOTH THE APPEALS BY ASSESSEE ARE DIRECTED AGAINST COMMON ORDER OF LD. CIT(APPEALS) SHIMLA DATED 05.11.2014 FOR ASSESSMENT YEAR 2007-08 AND 2008-09, CHALLENGING THE LEVY OF PENALTY UNDER SECTION 271B OF THE INCOME TAX ACT. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT ASSESSEE IS AGRICULTURE PRODUCE MARKET COMMITTEE SITUATED AT SO LAN, HIMACHAL PRADESH AND DERIVES INCOME FROM RENT, MARK ET FEES AND ALLIED ACTIVITIES. IN THIS CASE, NO RETUR N WAS FILED FOR ASSESSMENT YEARS UNDER APPEAL. THEREFORE, NOTI CE 2 UNDER SECTION 148 OF THE ACT WAS ISSUED WITH DIRECT ION TO FILE THE RETURN OF INCOME. THE ASSESSEE FILED RETU RN OF INCOME FOR TWO ASSESSMENT YEARS ON 05.10.2009. THE GROSS RECEIPTS FOR BOTH ASSESSMENT YEARS WERE RS. 2 .30 CR AND RS. 2.27 CR RESPECTIVELY. SINCE THE GROSS RECE IPTS WERE MORE THAN PRESCRIBED LIMITS OF TURNOVER UNDER SECTION 44AB OF THE ACT, THEREFORE, PENALTY NOTICE WAS ISSUED UNDER SECTION 271B OF THE ACT FOR FAILURE TO GET THE ACCOUNTS AUDITED. THE ASSESSEE PLEADED BEFORE THE ASSESSING OFFICER THAT ASSESSEE HAD NOT BEEN CARRYI NG OUT ANY BUSINESS OR PROFESSION AND ITS INCOME IS EXEMPT UNDER SECTION 10(20) OF THE ACT. IT IS NOT OBLIGATORY TO THE ASSESSEE TO GET ACCOUNTS AUDITED AND WAS TO SUBMIT TAX AUDIT REPORT. THUS, ASSESSEE WAS UNDER BONAFIDE BE LIEF THAT SINCE ITS INCOME IS EXEMPT UNDER SECTION 10(20 ) OF THE ACT, NO PENALTY WAS LEVIABLE. THE ASSESSING OFF ICER, HOWEVER, WAS NOT SATISFIED WITH THE CONTENTION OF T HE ASSESSEE AND LEVIED THE PENALTY UNDER THE ABOVE PRO VISION. 3. THE ASSESSEE REITERATED THE SAME SUBMISSIONS BE FORE LD. CIT(APPEALS) AND IT WAS ALSO SUBMITTED THAT ASS ESSEE WAS UNDER BONAFIDE BELIEF THAT STATUS OF LOCAL AUTH ORITY IS DEFINED UNDER SECTION 10(20) OF THE ACT AND ITS INC OME IS EXEMPT, THEREFORE, ASSESSEE COULD NOT FILE AUDIT RE PORT ALONGWITH THE RETURN OF INCOME. IT WAS SUBMITTED T HAT ASSESSEE HAS REASONABLE CAUSE FOR FAILURE TO COMPLY WITH PROVISIONS OF LAW. THEREFORE, WHEN ASSESSEE PROVES REASONABLE CAUSE, PENALTY NEED NOT TO BE IMPOSED. IT WAS ALSO SUBMITTED THAT ITAT CHANDIGARH BENCH HAS ALREA DY 3 ACCEPTED THE APPEAL OF THE ASSESSEE AND SIMILAR PEN ALTY WAS DELETED. COPY OF THE ORDER WAS ALSO PLACED ON R ECORD. HOWEVER, LD. CIT(APPEALS) WAS NOT SATISFIED WITH TH E EXPLANATION OF THE ASSESSEE AND DISMISSED THE APPEA L OF THE ASSESSEE. 3. THE LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE AUTHORITIES BELOW AND SUBMI TTED THAT IN ASSESSMENT YEAR 2003-04, ITAT SIMILARLY CAN CELLED THE PENALTY IN THE CASE OF SAME ASSESSEE IN ITA 909 /2010 VIDE ORDER DATED 08.06.2012. COPY OF THE ORDER IS PLACED ON RECORD. THE LD. DR RELIED UPON ORDERS OF AUTHORI TIES BELOW. 4. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT O F ORDER IN THE CASE OF ASSESSEE DATED 08.06.2012 IN WHICH O N IDENTICAL FACTS, PENALTY HAS BEEN CANCELLED BY THE TRIBUNAL UNDER SECTION 271B OF THE ACT, WE ARE OF THE VIEW T HE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE AND AS S UCH PENALTY IS NOT LEVIABLE. THE ASSESSEE PLEADED THAT IT WAS UNDER BONAFIDE BELIEF THAT SINCE ITS INCOME WAS EXE MPT BEING LOCAL AUTHORITY, THEREFORE, ACCOUNTS COULD NO T BE AUDITED. WHEN THE TRIBUNAL HAS TAKEN A VIEW IN FAV OUR OF THE ASSESSEE ACCEPTING THE REASONABLE CAUSE OF THE ASSESSEE IN EARLIER YEAR, WE DO NOT PROPOSE TO TAKE A CONTRARY VIEW. THEREFORE, FOLLOWING THE ORDER DATE D 08.06.2012, WE SET ASIDE THE ORDERS OF AUTHORITIES BELOW AND CANCEL THE PENALTY. HOWEVER, WE MAY REMIND THA T ASSESSEE HAS BEEN PLEADING THIS REASON FOR MANY YEA RS. 4 THEREFORE, ASSESSEE SHOULD TAKE STEPS IN FUTURE FOR GETTING THE ACCOUNTS AUDITED AS PER LAW BECAUSE THIS REASON ABLE BELIEF MAY NOT CONTINUE FOR INDEFINITE PERIOD. WIT H THESE OBSERVATIONS, BOTH APPEALS OF THE ASSESSEE ARE ALLO WED. 5. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH JULY,2015. SD/- SD/- (T.R.SOOD) (BHAVNESH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 15 TH JULY,2015. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT CHANDIGARH