Anand Silk & Sarees, Ambala City V. ITO, Ambala

ITA 703/CHANDI/2011

• Counselvise Citation: 70321514 RSA 2011
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 23-06-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAI SHREE SHARMA
• Assessee Lawyers: KULDEEP ANAND

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCHES SMC CHANDIGARH BEFORE MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO703/CHD/2011 ASSESSMENT YEAR: 2006-07 M/S ANAND SILK & SAREES V THE I.T.O. WARD 4 4-AB, NEW CLOTH MARKET AMBALA AMBALA CITY PAN: AALFA 8779R (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI KULDEEP ANAND RESPONDENT BY: SMT. JAISHREE SHARMA DATE OF HEARING : 16.08.2011 DATE OF PRONOUNCEMENT : 26.08.2011 ORDER THE APPEAL BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A), PANCHKULA DATED 6.5.2011 RELATING TO ASSESSMENT YEAR 2006-07 AGAINST THE PENALTY ORDER PASSED U/S 271(1)(D) OF THE INCOME TAX ACT. . 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL:- 1 THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE PENALTY RS. 11,782/- WITHOUT APPRECIATING THE WRITT EN SUBMISSIONS OF THE APPELLANT. 2 THAT THE COMPLETE DETAIL OF FBT WAS PROVIDED ON PLAIN PAPER AND WAS ANNEXED WITH THE RETURN OF INCO ME WHICH WAS FILED ON 25.4.2006, AS NO RETURN FORM FOR FBT WAS PRESCRIBED TILL THAT DATE. 3. THAT THERE IS NO DELIBERATE INACTION, LACK OF BONAFIDES OR GUILT OR LATCHES OR NEGLIGENCE ON THE PART OF 2 THE APPELLANT AND HE HAS NOT CONCEALED THE PARTICUL ARS OF FBT AMOUNTED TO RS. 35,000/- WAS PROVIDED WITH THE INCOME TAX RETURN, THE APPELLANT CANNOT BE HELD TO HAVE CONCEALED THE PARTICULARS OF FBT. 4 THAT THE APPELLANT HAS HANDED OVER THE RETURN OF INCOME AND RETURN OF FBT TO HIS COUNSEL SHRI K.K. GOYAL ON 25.4.2006 FOR FURTHER SUBMISSION IN INCOME TAX OFFICE AND THE RETURN OF INCOME WAS FILLED ON 25.4.2006 AND INADVERTENTLY THE COUNSEL SHRI K.K. G OYAL OMITTED TO FILE THE FBT RETURN WITH THE RETURN OF I NCOME AS AND WHEN THE FBT RETURN FORM WAS PRESCRIBED. 5 THAT THE APPELLANT MAY NOT BE PUNISHED DUE TO LAPSE ON THE PART OF COUNSEL. 6 THAT THE APPELLANT HAS LOST HIS BALANCE OF MIND DUE TO UNEXPECTED NATURAL CALAMITY CAUSING TOTAL DESTRUCTION OF STOCK, FURNITURE, BOOKS OF ACCOUNT E TC. DUE TO OUTBREAK OF FIRE ON THE NIGHT OF 22 ND DAY OF OCTOBER. 3. THOUGH SEVERAL GROUNDS OF APPEAL HAVE BEEN RAISE D BY THE ASSESSEE BUT THE ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST P ENALTY LEVIED U/S 271(1)D) OF THE INCOME TAX ACT FOR NON FURNISHING THE RETURN FO R FRINGE BENEFIT TAX (FBT). 4. THE ASSESSEE CLAIMED THAT IT HAD HANDED OVER THE RETURN OF INCOME TO HIS COUNSEL ON 25.4.2006 ALONGWITH DETAILS OF FBT PROVI DED ON PLAIN PAPER FOR SUBMISSION BEFORE THE INCOME TAX OFFICE. THE SAID RETURN WAS FILED ON 25.4.2006 BUT FBT RETURN IN CONNECTION WITH THE FRI NGE BENEFIT WAS NOT FILED AS THE SAID RETURN FORM WAS NOT PRESCRIBED AT THE R ELEVANT TIME. THE ASSESSEE CLAIMS TO HAVE FURNISHED COMPLETE DETAILS OF FBT AM OUNTING TO RS. 35,000/- WITH THEIR INCOME TAX RETURN. AS PER THE ASSESSING OFFICER, DURING THE COURSE 3 OF ASSESSMENT PROCEEDINGS, IT WAS NOTICED THAT THE ASSESSEE HAD NOT FILED THE RETURN OF FRINGE BENEFIT TAX. AFTER RECORDING REA SONS FOR ISSUE OF NOTICE U/S 115 WH OF THE ACT, A NOTICE WAS ISSUED TO THE ASSES SEE IN RESPONSE TO WHICH THE ASSESSEE FILED THE RETURN OF FRINGE BENEFIT O N 5.11.2099 BY DECLARING THE VALUE OF FRINGE BENEFIT AT RS. 35,003/-. THE RETUR N OF INCOME FILED BY THE ASSESSEE WAS ACCEPTED U/S 115 WE(3) OF THE ACT. HO WEVER, PENALTY PROCEEDINGS WERE INITIATED. THE REPLY OF THE ASSES SEE IS INCORPORATED AT PAGES 1 & 2 OF THE PENALTY ORDER. THE ASSESSING OFFICER HELD THE ASSESSEE TO BE IN DEFAULT AND LEVIED PENALTY U/S 271(1)(D) OF THE ACT AT RS. 11,780/-. THE CIT(A) CONFIRMED THE ORDER OF THE ASSESSING OFFICER . THE CLAIM OF THE ASSESSEE THAT IT WAS DISTURBED BECAUSE OF THE FIRE IN THE SHOP ON 22.10.2006 WAS REJECTED BY THE CIT(A) BY OBSERVING THAT THE LA ST DATE FOR FILING OF THE FBT RETURN WAS 30.10.2006 AND THE SAME WAS FILED ON 5.11.2009 AFTER THREE YEARS OF THE DUE DATE AND AFTER THE NOTICE WAS ISSU ED TO THE ASSESSEE. 5. ON PERUSING THE RECORD AND THE REPLY FILED BY TH E ASSESSEE BEFORE THE CIT(A), IT IS APPARENT THAT THE CBDT HAD PRESCRIBED ON 10.10.2006 FORM NO. 3 CB VIDE INTIMATION NO. 1163(E) EFFECTIVE FROM 24. 7.2006. THE CBDT HAS EXTENDED THE DATE OF SUBMISSION OF FBT RETURN TO 31 .10.2006 VIDE NOTIFICATION NUMBER 142/41/2005 TPL (PT) DATED 24.7.2006. TH E ASSESSEE HAD FURNISHED ITS RETURN OF INCOME ON 25.4.2006 ALONGWI TH COMPUTATION OF FBT ON PLAIN PAPER. THE DOCUMENTS WERE FURNISHED TO THE C OUNSEL OF THE ASSESSEE WHO IN TURN ASSURED THE ASSESSEE THAT THE SAID RETU RN WOULD BE FILED AFTER GETTING FBT DEPOSITED AS SOON AS THE RETURN FORM W AS PRESCRIBED AND PUBLISHED. THEREAFTER, FIRE BROKE OUT ON THE NIGHT OF 22.10.2006 IN THE PREMISES OF THE ASSESSEE IN WHICH AS PER THE ASSESS EE THERE WAS A TOTAL DESTRUCTION OF THE STOCK, FURNITURE, BOOKS OF ACCOU NT, ETC. BECAUSE OF THE 4 MENTAL STRESS AND DEPRESSION AND BEING PENNILESS A ND WITH THE BONAFILE BELIEF THAT THE COUNSEL HAD FURNISHED THE FBT RETURN, WHEN THE FORM WAS PRESCRIBED, NO ACTION WAS TAKEN BY ASSESSEE. IN THE TOTALITY O F ABOVE SAID FACTS AND CIRCUMSTANCES, WHERE THE NECESSARY DETAILS IN CONNE CTION WITH THE ABOVE COMPUTATION OF FBT WAS HANDED OVER BY THE ASSESSEE TO HIS COUNSEL FOR ONWARD SUBMISSION BEFORE THE TAX AUTHROTIES, THERE IS NO MERIT IN THE LEVY OF PENALTY IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE. THE ASSESSEE DISCHARGED ITS ONUS OF FURNISHING THE DETAILS TO TH E COUNSEL, WHO HAD ALSO BONAFIDELY FILED THE RETURN OF INCOME ON 25.4.2006 ALONGWITH DETAILS OF FRINGE BENEFIT BUT WAS UNABLE TO FILE THE FBT RETURN AS NO FORMS FOR THE PURPOSES WERE PRESCRIBED BY THE CBDT. THE SAID FORMS WERE P RESCRIBED ON 10.10.2006. THE CIRCUMSTANCES ON 22.10.2006 I.E. THE BREAK UP OF FIRE IN THE PREMISES OF THE ASSESSEE ALSO CONTRIBUTED TO THE AB OVE SAID DELAY. HOWEVER, THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE IN N OT FURNISHING THE RETURN OF INCOME OF FBT IN TIME AND HENCE THERE IS NO MERIT I N THE LEVY OF PENALTY U/S 271(1)(D) OF THE ACT. THE ASSESSING OFFICER IS DIR ECTED TO DELETE THE AFORESAID PENALTY LEVIED U/S 271(1)(D) OF THE ACT . 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED ORDER PRONOUNCED IN THE OPEN COURT ON THIS 26 TH DAY OF AUGUST, 2011 SD/- (SUSHMA CHOWLA) JUDICIAL MEMBER DATED : 26 TH AUGUST, 2011 RKK COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR 5 TRUE COPY BY ORDER ASSISTANT REGISTRAR, ITAT, CHANDIGARH