OM PRAKASH AGARWAL, Jaipur V. ACIT, Jaipur

ITA 65/JPR/2017

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 5987 (ITAT-JAIPUR)
• Duration Of Justice: 2 year(s) 8 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 18-01-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEENA JEPH JCIT DHK
• Keywords: Principle of natural justice; Bonafide mistake; TDS
• Section: 271(1)(c); 273B

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCH SMC, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; DS LE{K BEFORE: SHRI SHRI VIJAY PAL RAO, JUDICIAL MEMBER VK;DJ VIHY LA-@ ITA NO. 65/JP/2017 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2006-07. SHRI OM PRAKASH AGARWAL, C/O SHRI O.P. AGRAWA, FCA II & III FLOOR, H-8, CHITRANJAN MARG, C-SCHEME, JAIPUR. CUKE VS. THE ACIT, CIRCLE-3, JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO.ABHPA 3739 J VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI MANISH AGARWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SMT. NEENA JEPH (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 16.09.2019. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 30/09/2019. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER DATED 13.10.2016 OF LD. CIT (APPEALS) ARISING FROM PENALTY ORDER PASSED UNDER SECTION 271(1)(C) OF THE I.T. ACT FOR THE ASSESSMENT YEAR 2006-07. THE ASSE SSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL :- 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE C ASE THE LD. CIT (A) HAS GROSSLY ERRED IN CONFIRMING THE PENALTY LEVIED U/S 271(1)(C) OF THE IT ACT, 1961, EX-PARTE, WITHOUT ADDUCING ENO UGH OPPORTUNITIES TO THE APPELLANT. THUS, THE ORDER PAS SED IS AGAINST NATURAL JUSTICE, BAD IN LAW AND DESERVES TO BE QUAS HED. 2. THAT, THE LD. CIT (A) HAS FURTHER ERRED IN SUMMA RILY IGNORING THE EXPLANATIONS GIVEN BEFORE THE LD. AO AND THEREBY CO NFIRMING THE PENALTY OF RS. 2,24,438/-. THUS, THE ACTION OF LD. CIT (A) DESERVES TO BE HELD BAD IN LAW AND THE PENALTY U/S 271(1)(C) DESERVES TO BE DELETED. 2 ITA NO. 65/JP/2017 SHRI OM PRAKASH AGARWAL, JAIPUR. 3. THAT THE APPELLANT CRAVES THE RIGHT TO ADD, DELE TE, AMEND OR ABANDON ANY OF THE GROUNDS OF THIS APPEAL AT THE TI ME OR BEFORE THE ACTUAL HEARING OF THE CASE. 2. AT THE TIME OF HEARING, THE LD. A/R OF THE ASSES SEE HAS STATED AT BAR THAT THE ASSESSEE DOES NOT PRESS GROUND NO. 1 OF THE APPEAL AND THE SAME MAY BE DISMISSED AS NOT PRESSED. THE LD. D/R HAS RAISED NO OBJECTIO N IF THE GROUND NO. 1 OF THE ASSESSEES APPEAL IS DISMISSED AS NOT PRESSED. ACC ORDINGLY, THE GROUND NO. 1 OF THE ASSESSEES APPEAL IS DISMISSED BEING NOT PRESSED. GROUND NO. 2 IS REGARDING LEVY OF PENALTY UNDER SEC TION 271(1)(C) OF THE IT ACT WHICH WAS CONFIRMED BY THE LD. CIT (A). 3. THE ASSESSEE IS AN INDIVIDUAL AND PROPRIETOR OF M/S. OM CONSTRUCTION COMPANY WHICH IS ENGAGED IN THE BUSINESS OF CONTRAC T ACTIVITY FOR BSNL SUCH AS MANUAL DIGGING AND HORIZONTAL DIRECTION DRILLING AN D LYING OF TELEPHONE CABLE. IN THE SCRUTINY ASSESSMENT, THE AO MADE VARIOUS ADDITIONS/ DISALLOWANCES AMOUNTING TO RS. 22,60,831/-. THE LD. CIT (A) DELETED MOST OF THE A DDITIONS MADE BY THE AO EXCEPT AN AMOUNT OF RS. 6,66,781/- WHICH WAS NOT PRESSED B Y THE ASSESSEE IN RESPECT OF THE CONTRACT RECEIPTS INADVERTENTLY NOT INCLUDED IN THE GROSS RECEIPTS DECLARED FOR THE YEAR. THE AO INITIATED THE PENALTY PROCEEDINGS UND ER SECTION 271(1)(C) AND LEVIED A PENALTY OF RS. 2,24,438/- AGAINST THE SAID ADDITION OF RS. 6,66,781/- WHICH WAS CONCEDED BY THE ASSESSEE IN THE QUANTUM PROCEEDINGS . THE ASSESSEE CHALLENGED THE ACTION OF THE AO BEFORE THE LD. CIT (A) BUT COU LD NOT SUCCEED. 4. BEFORE THE TRIBUNAL, THE LD. A/R OF THE ASSESSEE HAS SUBMITTED THAT EVEN IN THE QUANTUM PROCEEDINGS THE ASSESSEE HAS EXPLAINED THE REASONS FOR NOT INCLUDING 3 ITA NO. 65/JP/2017 SHRI OM PRAKASH AGARWAL, JAIPUR. THE SAID AMOUNT IN THE GROSS CONTRACT RECEIPTS DUE TO BONAFIDE AND INADVERTENT MISTAKE. THE LD. A/R HAS SUBMITTED THAT THE ENTIRE CONTRACT RECEIPTS WAS RECEIVED FROM THE BSNL AND SUBJECTED TO THE TDS. THEREFORE, THERE WAS NO QUESTION OF CONCEALMENT OF THE SAID AMOUNT. EVEN OTHERWISE, TH E DETAILS OF THE SAID RECEIPTS WERE AVAILABLE WITH THE DEPARTMENT AS IT WAS SUBJEC TED TO TDS. WHEN THE ASSESSEE REALIZED HIS MISTAKE OF NOT INCLUDING THE SAID AMOU NT IN THE GROSS RECEIPTS IN THE PROFIT & LOSS ACCOUNT, IT WAS CONCEDED BEFORE THE L D. CIT (A). THERE WAS NO WILLFUL SUPPRESSION OF FACT BY THE ASSESSEE BUT IT IS A GEN UINE MISTAKE AND OMISSION ON THE PART OF THE ASSESSEE. THE LD. A/R HAS POINTED OUT THAT THE AO HAS NOTICED THIS AMOUNT ONLY FROM THE TDS CERTIFICATES FILED BY THE ASSESSEE WITH THE RETURN OF INCOME WHICH SHOW THE TOTAL CONTRACT RECEIPTS FOR T HE YEAR UNDER CONSIDERATION. HENCE THE LD. A/R HAS PLEADED THAT A BONAFIDE MISTA KE WHICH WAS CORRECTED BY THE ASSESSEE BY ACCEPTING THE SAME IN THE ASSESSMENT PR OCEEDINGS CANNOT BE CONSTRUED AS FURNISHING OF INACCURATE PARTICULARS OF INCOME O R CONCEALMENT OF INCOME. IN SUPPORT OF HIS CONTENTION HE HAS RELIED UPON THE DE CISION OF DELHI BENCHES OF THE TRIBUNAL DATED 03.03.2016 IN CASE OF B.L. INTERNATI ONAL VS. ACIT IN ITA NO. 1590/DEL/2014. 5. ON THE OTHER HAND, THE LD. D/R HAS SUBMITTED THA T THE CONDUCT OF THE ASSESSEE IS NOT COOPERATIVE AS THE ASSESSEE HAS NOT APPEARED BEFORE THE LD. CIT (A) DESPITE 11 OPPORTUNITIES WERE GIVEN. IT IS A CLEAR CASE OF CONCEALMENT OF INCOME AS THE ASSESSEE HAS NOT SHOWN THE CONTRACT RECEIPTS EI THER IN THE BOOKS OF ACCOUNT OR IN THE RETURN OF INCOME. SHE HAS RELIED UPON THE ORDER S OF THE AUTHORITIES BELOW. 4 ITA NO. 65/JP/2017 SHRI OM PRAKASH AGARWAL, JAIPUR. 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THE AO HAS MADE THE ADDITION OF RS. 6,66,7 81/- BY GIVING THE DETAILS OF CONTRACT RECEIPTS AND TDS IN THE ASSESSMENT ORDER A S UNDER :- A. DURING THE ASSESSMENT PROCEEDING IT WAS NOTED THAT THE ASSESSEE HAS SHOWN GROSS RECEIPTS OF CONTRACT RS. 5 ,69,87,392/-. DURING GOING THROUGH THE CONTRACT RECEIPT ACCOUNT I N LEDGER, THE TOTAL OF RECEIPTS IS ALSO OF THE SAME AS UNDER :- PARTICULARS CONTRACT RECEIPTS TDS BSNL JAIPUR 2,84,99,630 6,45,854 BSNL JALLANDHAR 2,35,56,026 5,04,570 BSNL DELHI 26,87,977 61,415 BSNL LUCKNOW 22,43,759 50,349 TOTAL : 5,69,87,392 12,62,188 WHILE WITH THE RETURN OF INCOME THE ASSESSEE HAS EN CLOSED FIVE TDS CERTIFICATES WHICH INCLUDE CERTIFICATES FROM ABOVE FOUR PARTIES AND FROM GMTD JODHPUR SHOWING PAYMENT OF RS. 6,66,781/- AND TDS THERE UPON OF RS. 15,003/-. THE ASSESSEE HAS SHOWN THESE RECEI PTS NEITHER IN THE RETURN OF INCOME NOR IN THE BOOK OF ACCOUNTS. IT IS NOTED THAT THE AMOUNT OF TDS OF RS. 15,003/- HAS BEEN CLAIMED BY T HE ASSESSEE. THUS IT IS CLEAR THAT THE ASSESSEE HAS REPORTED THE TOTAL CONTRACT RECEIPTS OF RS. 5,69,87,392/- AND ALL WERE SUBJECTED TO TDS. IT IS ALSO NOT IN DISPUTE THAT THE ENTIRE CONTRACT RECEIPTS WERE RECEIVED FROM BSNL OFFICE. THE AMOUNT OF RS. 6,66,781/- AS RECEIVED FROM GMTD JODHPUR WAS DETECTED BY THE AO F ROM THE TDS CERTIFICATE FILED BY THE ASSESSEE. THUS IT IS CLEAR THAT ONLY FROM T HE RECORD PRODUCED BY THE ASSESSEE, THE AO NOTICED THIS DISCREPANCY OF RS. 6, 66,781/- NOT PART OF THE CONTRACT 5 ITA NO. 65/JP/2017 SHRI OM PRAKASH AGARWAL, JAIPUR. RECEIPTS REPORTED BY THE ASSESSEE. THE ACCOUNTS OF THE ASSESSEE ARE LIABLE FOR AUDIT AS IT IS CLEAR FROM THE ASSESSMENT ORDER THAT AUDIT REPORT UNDER SECTION 44AB WAS FILED BY THE ASSESSEE. THEREFORE, IT IS APPARENT T HAT EVEN THE AUDITOR COULD NOT DETECT THIS MISTAKE OF NOT INCLUDING THE CONTRACT R ECEIPT OF RS. 6,66,781/- WHEREAS THE TDS ON THE SAID RECEIPT WAS DULY REPORTED BY TH E ASSESSEE. THUS IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WHEN THE ASSESSEE RE PORTED THE CONTRACT RECEIPTS OF RS. 5,69,87,392/- AND ONLY ONE RECEIPT OF RS. 6,66, 781/- WAS REMAINED UNRECORDED, THEN THE EXPLANATION OF THE ASSESSEE THAT THIS HAPP ENED ONLY BECAUSE OF INADVERTENT AND BONAFIDE MISTAKE CANNOT BE DISBELIEVED. THEREF ORE, THE ASSESSEE EXPLAINED THAT IT IS NOT A WILLFUL SUPPRESSION BUT DUE TO GENUINE MISTAKE AND OMISSION THIS AMOUNT WAS NOT INCLUDED IN THE TOTAL CONTRACT RECEIPTS. T HIS IS OTHERWISE ONLY ABOUT 1% OF THE TOTAL CONTRACT RECEIPTS AND, THEREFORE, HAVING REGARD TO THE PECULIAR FACTS AND CIRCUMSTANCES WHEN THE ENTIRE RECEIPT IS SUBJECTED TO TDS AND RECEIVED FROM THE BSNL, IT CANNOT BE HELD TO BE A CASE OF CONCEALMENT OR SUPPRESSION OF THE CONTRACT RECEIPTS. ACCORDINGLY, THE EXPLANATION OF THE ASSE SSEE FALLS IN THE AMBIT OF REASONABLE AND BONAFIDE EXPLANATION AS PER THE PROV ISIONS OF SECTION 273B OF THE ACT AND CONSEQUENTLY THE PENALTY LEVIED UNDER SECTION 2 71(1)(C) IS DELETED. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER IS PRONOUNCED IN THE OPEN COURT ON 30/09/20 19. SD/- ( FOT; IKY JKWO (VIJAY PAL RAO) U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 30/09/2019. DAS/ 6 ITA NO. 65/JP/2017 SHRI OM PRAKASH AGARWAL, JAIPUR. VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- SHRI OM PRAKASH AGARWAL, JAIPUR. 2. THE RESPONDENT THE ACIT CIRCLE-3, JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 65/JP/2017) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR