Sh. Paramjit Singh, Ludhiana V. ACIT, Ludhiana

ITA 760/CHANDI/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 2524 (ITAT-CHANDIGARH)
• Duration Of Justice: 4 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 04-01-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 03-09-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Assessee Lawyers: S R CHHABRA
• Keywords: Reasonable cause; Condonation of delay; Bonafide mistake

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS.RANO JAIN, ACCOUNTANT MEMBER ITA NO. 760/CHD/2015 ASSESSMENT YEAR: 2008-09 SHRI PARAMJIT SINGH, VS THE ACIT, PROP. P.S. CONSTRUCTIONS, CIRCLE V, NEAR RAILWAY STATION, LUDHIANA. G.T.ROAD, SAHNEWAL, LUDHIANA. PAN: ADGPS5783D (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.R.CHHABRA RESPONDENT BY : SHRI MANJIT SINGH DATE OF HEARING : 04.01.2016 DATE OF PRONOUNCEMENT : 06.01.2016 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-II LUDHIANA DATED 29.01.2 015 FOR ASSESSMENT YEAR 2008-09 CHALLENGING THE LEVY OF PENALTY UNDER SECTION 271A OF THE INCOME TAX ACT. 2. THE BRIEF FACTS OF THE CASE ARE THAT RETURN OF INCOME WAS FILED DECLARING INCOME OF RS. 38,77,257/ -. THE ASSESSEE IS A CONTRACTOR. THE ASSESSING OFFICE R ASKED THE ASSESSEE TO PRODUCE COMPLETE BOOKS OF ACCOUNT ALONGWITH VOUCHERS. THE ASSESSING OFFICER 2 NOTED THAT ASSESSEE DID NOT MAINTAIN STOCK REGISTER/WORK-IN-PROGRESS, MUSTER ROLL WITH RESPECT TO LABOUR AND MAN-POWER DEPLOYED ALONGWITH VOUCHERS OF LABOUR/WAGES AND CASH PAYMENT TO THE SUPPLIERS. TH E ASSESSEE ADMITTED NON-MAINTENANCE OF THESE RECORDS SUBMITTING THEREIN THAT THERE WAS ONE ACCOUNTANT DURING THE YEAR AND AS SUCH, DETAILS OF STOCK PERTA INING TO ALL THE SITES COULD NOT BE MAINTAINED. THE MUST ER ROLL ETC. WERE NOT MAINTAINED BECAUSE OF THE NAREGA PROBLEM. THE ASSESSING OFFICER, ACCORDINGLY, REJECT ED THE BOOKS OF ACCOUNT UNDER SECTION 145(3) OF THE INCOME TAX ACT AND ESTIMATED THE PROFIT BY APPLYING PROFIT RAT E OF 3%. THE ASSESSING OFFICER INITIATED THE PENALTY UN DER SECTION 271A OF THE INCOME TAX ACT AS WELL AS UNDER SECTION 271(1)(C) OF THE ACT AND VIDE SEPARATE ORDE R, LEVIED THE PENALTY UNDER BOTH THE PROVISIONS. THE LD. CIT(APPEALS), VIDE THE IMPUGNED ORDER, DISMISSED BO TH THE APPEALS OF THE ASSESSEE. 3. ACCORDING TO THE OFFICE, THE APPEAL OF THE ASSES SEE IS TIME BARRED BY 146 DAYS. 4. THE LD. COUNSEL FOR THE ASSESSEE FILED APPLICATI ON FOR CONDONATION OF DELAY EXPLAINING THEREIN THAT SI NCE LD. CIT(APPEALS) PASSED THE COMMON ORDER UNDER BOTH THE PROVISIONS UNDER SECTION 271A AND 271(1)(C) OF THE ACT THEREFORE, SINGLE APPEAL WAS FILED AGAINST BOTH THE PENALTIES WITHIN TIME AND WHEN ASSESSEE REALIZED TH AT TWO DIFFERENT APPEALS SHALL HAVE TO BE FILED, EARL IER 3 APPEAL WAS CONSIDERED FOR PENALTY UNDER SECTION 271(1)(C) OF THE ACT WHICH HAS BEEN DECIDED BY THE TRIBUNAL VIDE ORDER DATED 16.09.2015 IN ITA 299/201 5. HE HAS, THEREFORE, SUBMITTED THAT DUE TO BONAFIDE MISTAKE, THE ASSESSEE HAS NOT FILED TWO DIFFERENT A PPEALS AND AS SUCH, REQUESTED FOR CONDONATION OF DELAY IN FILING THE PRESENT APPEAL. 5. AFTER CONSIDERING RIVAL CONTENTIONS OF LD. REPRESENTATIVES OF BOTH THE PARTIES, WE ARE OF THE VIEW ASSESSEE HAS BEEN ABLE TO EXPLAIN REASONABLE CAUSE FOR FAILURE TO FILE THE APPEAL WITHIN THE PERIOD OF LIM ITATION. THE ASSESSEE FILED SINGLE APPEAL AGAINST BOTH THE PENALTIES WHICH WERE DECIDED BY LD. CIT(APPEALS) THROUGH COMMON CONSOLIDATED ORDER. THEREFORE, THER E APPEARS A BONAFIDE MISTAKE ON THE PART OF THE ASSES SEE IN FILING SINGLE APPEAL, THEREFORE, WE ARE SATISFIE D THAT ASSESSEE HAS BEEN ABLE TO EXPLAIN REASONABLE CAUSE FOR FAILURE TO FILE THE APPEAL WITHIN THE PERIOD OF LIM ITATION. DELAY IN FILING APPEAL IS, THEREFORE, CONDONED. 6. WE HAVE HEARD LD. REPRESENTATIVES OF BOTH THE PARTIES. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTE D THAT ASSESSEE IS A CONTRACTOR AND MAINTAINED PROPER BOOK S OF ACCOUNT AND BOOKS OF ACCOUNT ETC. WERE PRODUCED BEF ORE ASSESSING OFFICER AT ASSESSMENT STAGE WHICH HAS BEE N TEST CHECKED. THE ASSESSEE DID NOT MAINTAIN STOCK REGISTER, MUSTER ROLL AND CERTAIN VOUCHERS OF EXPEN SES, THEREFORE, BOOKS OF ACCOUNT WERE REJECTED. HE HAS 4 SUBMITTED THAT SINCE ASSESSEE MAINTAINED PROPER BOO KS OF ACCOUNT THEREFORE, PENALTY NEED NOT BE IMPOSED U NDER THE ABOVE PROVISIONS. HE HAS RELIED UPON ORDER OF ITAT CHANDIGARH BENCH IN THE CASE OF ACIT VS AGGARWAL CONSTRUCTION CO. 106 ITD 129 (TM) IN WHICH IT WAS H ELD THAT, NO PENALTY COULD BE LEVIED UNDER SECTION 271A IF BOOKS OF ACCOUNT OF THE ASSESSEE (CIVIL CONTRACTOR) ARE FOUND TO BE UN-RELIABLE BY REVENUE AUTHORITIES AND ARE REJECTED. HE HAS ALSO RELIED UPON ORDER OF ITAT COCHIN BENCH IN THE CASE OF K.V. RAMCHANDRAN VS DCI T 58 SOT 264 IN WHICH IT WAS HELD THAT SINCE THERE IS AN OBVIOUS OMISSION IN RESPECT OF CIVIL CONTRACTOR IN RULE 6F(1), PENALTY UNDER SECTION 271A CANNOT BE IMPOSED ON CIVIL CONTRACTOR FOR NON-MAINTENANCE OF BOOKS OF ACCOUNT. ON THE OTHER HAND, LD. DR RELIED UPON ORDERS OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD RIVAL SUBMISSIONS. SECTION 271A PROVIDES THAT IF ANY PERSON FAILS TO KEEP AND MAIN TAIN ANY BOOKS OF ACCOUNT AND OTHER DOCUMENTS AS REQUIRE D BY SUCH SECTION 44AA OR THE RULES MADE THERE-UNDER, IN RESPECT OF ANY PREVIOUS YEAR OR TO RETAIN SUCH BOOK S OF ACCOUNT AND OTHER DOCUMENTS FOR THE PERIOD SPECIFIE D IN THE SAID RULE, THE ASSESSING OFFICER OR LD. CIT(APP EALS) MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PEN ALTY A SUM OF 25,000/- RUPEES IN SECTION 44AA, IT IS DIRECTED THAT PARTICULAR BOOKS OF ACCOUNT, OTHER DOCUMENTS MAY BE MAINTAINED IN RESPECT OF CERTAIN C LASS 5 OF BUSINESS OR PROFESSION WHICH DID NOT INCLUDE THE CASES OF THE CONTRACTORS. IN SUB-SECTION 3 OF SEC TION 44A OF INCOME TAX ACT AND RULE 6F OF IT RULES, CLAS SES OF BUSINESS OR PROFESSION CARRIED ON BY THE CONTRAC TORS ARE ALSO NOT SPECIFIED. THEREFORE, DECISION IN THE CASE OF K.V. RAMACHANDRAN (SUPRA) SQUARELY APPLY TO THE FAC TS OF THE CASE. FURTHER, THE ASSESSEE PRODUCED BOOKS OF ACCOUNT ETC. BEFORE ASSESSING OFFICER AT THE ASSESS MENT STAGE WHICH HAVE BEEN TEST-CHECKED AND EXAMINED. HOWEVER, BOOKS OF ACCOUNT WERE REJECTED BECAUSE OF THE NON-MAINTENANCE OF THE STOCK REGISTER, MUSTER ROLL AND CERTAIN VOUCHERS OF THE EXPENSES. THEREFORE, IT IS NOT A FIT CASE OF LEVY OF PENALTY UNDER SECTION 271A OF T HE INCOME TAX ACT. WE, ACCORDINGLY, SET ASIDE THE ORD ERS OF AUTHORITIES BELOW AND CANCEL THE PENALTY. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (RANO JAIN) (BHAVNE SH SAINI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 6 TH JANURY., 2016. POONAM COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT(A), THE CIT, DR ASSISTANT REGISTRAR, ITAT/CHD