Seraj Yusha, Bhubaneswar V. DCIT, Circle-1(2), Bhubaneswar

ITA 72/CTK/2017

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1971 (ITAT-CUTTACK)
• Duration Of Justice: 2 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-09-2019
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 18-07-2018
• Assessment Year: 2010-2011
• Appeal Filed On: 27-02-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Bonafide belief; Reasonable cause
• Section: 44AD; 201; 44BB; 11

Judgement Text

P A G E 1 | 5 IN THE INCOME TAX APPELLATE TRIBUNAL, CUTTACK BENCH, CUTTACK BEFORE SHRI CHANDRA MOHAN GARG , JUDICIAL MEMBER AND LAXMI PRASAD SAHU, ACCOUNTANT MEMBER ITA NO S . 72 & 73 /CTK/201 7 ASSESSMENT YEAR S : 2010 11 & 2011 - 12 SERAJ YUSHA , N - 4/135, IRC VILLAGE, NAYAPALI, BHUBANESWAR. VS. ACIT, CIRCLE 1(2), AAYAKAR BHAVAN, RAJASWA VIHAR, BHUBANESWAR PAN/GIR NO. ABFPY 5082 N (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI SUNIL MISHRA , AR REVENUE BY : SHRI S.M.KESHKAMAT, CIT , DR DATE OF HEARING : 05 / 0 9 / 201 9 DATE OF PRONOUNCEMENT : 05 / 0 9 / 201 9 O R D E R PER C.M.GARG,JM TH ESE ARE APPEAL S FILED BY THE ASSESSEE AGAINST THE SEPARATE ORDER S OF THE CIT(A), - 2 , BHUBANESWAR DATED 1 3 .12.2016 FOR THE ASSESSMENT YEAR S 2010 - 2011 & 2011 - 2012. 2. THE SOLE GRIEVANCE RAISED BY THE ASSESSEE IS THAT THE CIT(A) IS NOT JUSTIFIED IN CONFIRMING THE PENALTY OF RS. 32,083 / - AND RS.33,759/ - LEVIED U/S.271B OF THE ACT FOR THE ASSESSMENT YEARS 2010 - 2011 & 2011 - 12. 3. THE BRIEF AND RELEVANT FACTS ARE THAT THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAS RECEIVED COMMISSION OF RS.64,16,667/ - AND RS.67,51,712/ - , FOR WHICH HAS NEITHER GOT HIS BOOKS OF ACCOUNT AUDITED NOR FURNISHED REPORT ON SUCH AUDIT AS REQUIRED U/S.44AB OF THE ACT. THEREFORE, ITA NO S . 7 2 & 73 /CTK/2017 ASSESSMENT YEAR : 2010 - 11 & 2011 - 12 P A G E 2 | 5 HE INITIATED PENALTY PROCEEDINGS U/S.271B OF THE ACT. IN REPLY TO SHOW CAUSE, THE ASSESSEE SUBMITTED THAT SINCE THE AS SESSEE HAS NOT CLAIMED ANY EXPENDITURE AGAINST THE INCOME EARNED UNDER DIFFERENT HEADS OF INCOME, THE PROVISION OF SECTION 44AB IS NOT APPLICABLE. THE ASSESSING OFFICER OBSERVED THAT AS PER THE PROVISION OF SECTION 44AB OF THE ACT, A PERSON CARRYING ON BU SINESS IS REQUIRED TO GET THE ACCOUNTS COMPULSORY AUDITED IF THE TOTAL SALES, TURNOVER OR GROSS RECEIPTS IN THE BUSINESS FOR THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR EXCEEDS RS.60 LAKHS AND FURNISH THE REPORT OF SUCH AUDIT REPORT BEFORE THE SPECI FIED DATE AS PRESCRIBED IN THE SAID ACT. SINCE, THE ASSESSEE HAS NEITHER GOT HIS ACCOUNTS AUDITED NOR SUBMITTED ANY SUCH REPORT AS REQUIRED U/S.44 A B OF THE ACT, THE ASSESSING OFFICER LEVIED PENALTY OF RS.32,083/ - AND RS.33,759/ - U/S.271B OF THE ACT FOR THE ASSESSMENT YEARS 2010 - 11 & 2011 - 12. 4. ON APPEAL, THE CIT(A) CONFIRMED THE PENALTY LEVIED BY THE ASSESSING OFFICER. 5. LD A.R SUBMITTED THAT THE LE VY OF PENALTY UNDER SECTION 271B IS NOT TENABLE IN T HE EYES OF LAW BECAUSE THE ASSESSEE HAS DISCLOSED THE ENTIRE RECEIPT AS PER FORM 26AS AS INCOME WITHOUT INCURRING ANY EXPENDITURE. HE SUBMITTED THAT THE ASSESSING OFFICER HAS DULY ACCEPTED THE INCOME AS PER BOOKS OF ACCOUNT MAINTAINED BY THE ASSESSEE. LD A.R. HAS SUBMITTED THAT THE ENTIRE AMOUNT HAS BEEN OFFERED TO TAX, THEREFORE, THE ASSESSEE WAS UNDER BONAFIDE BELIEF THAT THERE IS NO REQUIREMENT OF AUDIT OF ACCOUNTS. ITA NO S . 7 2 & 73 /CTK/2017 ASSESSMENT YEAR : 2010 - 11 & 2011 - 12 P A G E 3 | 5 THEREFORE, THE IMMUNITY SHOULD BE GRANTED TO THE ASSESSEE FROM LEVY OF PENALTY U/S. 271B OF THE ACT. 6. ON THE OTHER HAND, THE LEARNED DEPARTMENTAL REPRESENTATIVE HEAVILY RELIED ON THE ORDERS OF THE AUTHORITIES BELOW AND FURTHER SUBMITTED THAT AS PER PROVISIONS OF SECTION 44AB OF THE ACT, THE ASSESSEE IS REQUIRED TO AUDIT HIS BOOKS OF ACCOUNT IF TURNOVER EXCEEDS RS.60 LAKHS, WHICH HAS NOT BEEN COMPLIED BY THE ASSESSEE. THEREFORE, THE IMMUNITY FROM PENALTY CANNOT BE ALLOWED TO THE ASSESSEE MEREL Y BECAUSE THE ENTIRE AMOUNT RECEIVED BY THE ASSESSEE HAS BEEN OFFERED TO TAX WITHOUT CLAIMING ANY EXPENDITURE OR DEDUCTION THEREFROM . 7. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE RECORD OF THE CASE. FOR PROPER ADJUDICATION OF THE CASE, WE FIND IT APPROPRIATE TO REPRODUCE RELEVANT OF PROVISIONS OF SECTION 44AB OF THE ACT, WHICH READS AS UNDER: 44AB. EVERY PERSON, (A) CARRYING ON BUSINESS SHALL, IF HIS TOTAL SALES, TURNOVER OR GROSS RECEIPTS, AS THE CASE MAY BE, IN BUSINESS EXCEED OR EXCEEDS ONE CRORE RUPEES IN ANY PREVIOUS YEAR; OR (B) CARRYING ON PROFESSION SHALL, IF HIS GROSS RECEIPTS IN PROFESSION EXCEED 51 [FIFTY] LAKH RUPEES IN ANY PREVIOUS YEAR; OR (C) CARRYING ON THE BUSINESS SHALL, IF THE PROFITS AND GAINS FROM THE BUSINESS A RE DEEMED TO BE THE PROFITS AND GAINS OF SUCH PERSON UNDER SECTION 44AE OR SECTION 44BB OR SECTION 44BBB, AS THE CASE MAY BE, AND HE HAS CLAIMED HIS INCOME TO BE LOWER THAN THE PROFITS OR GAINS SO DEEMED TO BE THE PROFITS AND GAINS OF HIS BUSINESS, AS THE CASE MAY BE, IN ANY PREVIOUS YEAR; OR ITA NO S . 7 2 & 73 /CTK/2017 ASSESSMENT YEAR : 2010 - 11 & 2011 - 12 P A G E 4 | 5 (D) CARRYING ON THE 52 [PROFESSION] SHALL, IF THE PROFITS AND GAINS FROM THE 52 [PROFESSION] ARE DEEMED TO BE THE PROFITS AND GAINS OF SUCH PERSON UNDER SECTION 44ADA AND HE HAS CLAIMED SUCH INCOME TO BE LOWER THAN THE PROFITS AND GAINS SO DEEMED TO BE THE PROFITS AND GAINS OF HIS PROFESSION AND HIS INCOME EXCEEDS THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME - TAX IN ANY PREVIOUS YEAR; OR (E) CARRYING ON THE BUSINESS SHALL, IF THE PROVISIONS OF SUB - SECTION (4) OF SECTION 44AD ARE APPLICABLE IN HIS CASE AND HIS INCOME EXCEEDS THE MAXIMUM AMOUNT WHICH IS NOT CHARGEABLE TO INCOME - TAX IN ANY PREVIOUS YEAR, GET HIS ACCOUNTS OF SUCH PREVIOUS YEAR AUDITED BY AN ACCOUNTANT BEFORE THE SPECIFIED DATE AND FURNISH BY THAT DATE THE REPORT OF SUCH AUDIT IN THE PRESCRIBED FORM DULY SIGNED AND VERIFIED BY SUCH ACCOUNTANT AND SETTING FORTH SUCH PARTICULARS AS MAY BE PRESCRIBED . 8. SECTION 271B READS ASUNDER: 271B. IF ANY PERSON FAILS, WITHOUT REASONABLE CAUSE, TO GET HIS ACCOUNTS AUDITED IN RESPECT OF ANY PREVIOUS YEAR OR YEARS RELEVANT TO AN ASSESSMENT YEAR OR OBTAIN A REPORT OF SUCH AUDIT AS REQUIRED UNDER SECTION 44AB, THE INCOME - TAX OFFICER MAY DIRECT THAT SUCH PERSON SHALL PAY, BY WAY OF PENALTY, A SUM EQUAL TO ONE - HA LF PER CENT. OF THE TOTAL SALES, TURNOVER OR GROSS RECEIPTS, AS THE CASE MAY BE, IN BUSINESS, OR OF THE GROSS RECEIPTS IN PROFESSION, IN SUCH PREVIOUS YEAR OR YEARS OR A SUM OF ONE HUNDRED THOUSAND RUPEES, WHICHEVER IS LESS. 9. ON A CONJECTURE READING OF PROVISIONS OF SECTION 44AB AND SECTION 271B OF THE ACT, WE NOTED THAT IT IS A MANDATORY PROVISION THAT THE ASSESSEE SHOULD GET HIS BOOKS OF ACCOUNT AUDITED HAVING TURNOVER OF MORE THAN RS.60 LAKHS. IN THE PRESENT CASE, UNDISPUTEDLY, THE ADMITTED FACTS AR E THAT THE GROSS RECEIPTS OF RS.64,16,667/ - AND RS.67,51,712/ - FOR THE ASSESSMENT YEARS 2010 - 11 & 2011 - 12 AND THE ASSESSEE DID NOT AUDIT HIS BOOKS OF ACCOUNT DURING THE RELEVANT FINANCIAL PERIOD. WE ARE UNABLE TO SEE ANY ITA NO S . 7 2 & 73 /CTK/2017 ASSESSMENT YEAR : 2010 - 11 & 2011 - 12 P A G E 5 | 5 SAFEGUARD IN THE SAID PROVISIONS I N A SITUATION WHEN THE ASSESSEE HAS SHOWN ENTIRE INCOME/RECEIPTS WITHOUT CLAIMING ANY EXPENDITURE OR DEDUCTION. THEREFORE, THE CONTENTION OF LD A.R. OF THE ASSESSEE IS DEVOID OF ANY MERITS AND SAME IS DISMISSED. 10. IN THE RESULT, APPEAL S OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED ON 5 / 0 9 /201 9 . S D/ - SD/ - (LAXMI PRASAD SAHU) ( CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER CUTTACK; DATED 5 / 0 9 /20 9 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER SR . PVT. S ECRETARY ITAT, CUTTACK 1. THE APPELLANT : SERAJ YUSHA, N - 4/135, IRC VILLAGE, NAYAPALI, BHUBANESWAR 2. THE RESPONDENT. ACIT, CIRCLE 1(2), AAYAKAR BHAVAN, RAJASWA VIHAR, BHUBANESWAR 3. THE CIT(A) - 2 , BHUBANESWAR 4. PR.CIT - 2, BHUBANESWAR 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//