Ravi Kanwal Nursing Home Pvt. Ltd., Bareilly V. Income Tax Officer-2(3), Bareilly

ITA 770/LKW/2016

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7568 (ITAT-LUCKNOW)
• Duration Of Justice: 2 year(s) 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 26-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

I.T.A. NO.770/LKW/2016 ASSESSMENT YEAR:2013-14 1 IN THE INCOME TAX APPELLATE TRIBUNAL LUCKNOW BENCH B, LUCKNOW BEFORE SHRI A. D. JAIN, VICE PRESIDENT AND SHRI T. S. KAPOOR, ACCOUNTANT MEMBER ITA NO.770/LKW/2016 ASSESSMENT YEAR:2013-2014 RAVI KANWAL NURSING HOME PVT. LTD., 91, JANAKPURI, BAREILLY. PAN:AAACR 7219 K VS. INCOME TAX OFFICER-2(3), BAREILLY. (APPELLANT) (RESPONDENT) O R D E R PER T. S. KAPOOR, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST TH E ORDER OF LEARNED CIT(A), BAREILLY DATED 18/10/2016 PERTAINING TO ASS ESSMENT YEAR 2013-14. THIS APPEAL WAS EARLIER DISMISSED FOR NON PROSECUTI ON ON 10/05/2018. HOWEVER, THE ORDER DATED 10/05/2018 DISMISSING THE APPEAL OF THE ASSESSEE EX-PARTE WAS RECALLED VIDE ORDER DATED 18/01/2019 A ND NOW THE APPEAL HAS BEEN REFIXED FOR HEARING THE GROUNDS ON MERITS. 2. IN THIS APPEAL THE ONLY GROUND TAKEN BY THE ASSE SSEE IS THE ACTION OF LEARNED CIT(A) BY WHICH HE HAS UPHELD THE PENALTY I MPOSED BY THE ASSESSING OFFICER U/S 271B OF THE ACT. APPELLANT BY SHRI ASHISH RAJ SHUKLA, ADVOCATE RESPONDENT BY SHRI C. K. SINGH, D.R. DATE OF HEARING 22/04/2019 DATE OF PRONOUNCEMENT 26 / 04 /201 9 I.T.A. NO.770/LKW/2016 ASSESSMENT YEAR:2013-14 2 3. LEARNED A. R. SUBMITTED THAT ASSESSEE IS A PRIVA TE LIMITED COMPANY WHICH IS ENGAGED IN RUNNING OF A NURSING HOME AND A SSESSING OFFICER IMPOSED THE PENALTY U/S 271B OF THE ACT BY HOLDING THAT THE TOTAL RECEIPTS DECLARED BY THE ASSESSEE EXCEEDED THE MINIMUM AMOUN T WHICH REQUIRED THE ACCOUNTS TO BE AUDITED U/S 44AB(A) OF THE ACT. LEA RNED A. R. IN THIS RESPECT SUBMITTED THAT ASSESSEE ITSELF WAS NOT ENGAGED IN P ROFESSIONAL ACTIVITIES AND RATHER IT WAS RUNNING A BUSINESS IN THE FORM OF A P RIVATE LIMITED COMPANY THEREFORE, THE PROVISIONS OF SECTION 44AB(B) OF THE ACT WERE APPLICABLE AND THE TURNOVER LIMIT FOR THAT YEAR UNDER CONSIDERATIO N WAS RS.60 LACS AS AGAINST THE TURNOVER OF RS.54,45,940/- DECLARED BY THE ASSESSEE. IT WAS SUBMITTED THAT THE AUTHORITIES BELOW HAVE WRONGLY A SSUMED THAT THE ASSESSEE WAS ENGAGED IN PROFESSIONAL ACTIVITIES WHE REAS THE COMPANY ITSELF DID NOT POSSESS ANY PROFESSIONAL QUALIFICATION AND THEREFORE, THE PENALTY SHOULD NOT HAVE BEEN LEVIED. 4. LEARNED D. R., ON THE OTHER HAND, RELIED ON THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT ASSESSEE IS A PRIVA TE LIMITED COMPANY WHICH IS ENGAGED IN PROVIDING MEDICAL FACILITIES THROUGH ENGAGEMENT OF PROFESSIONAL DOCTORS. THE RECEIPTS OF THE ASSESSEE WERE RS.54,45,940/-. THE AUTHORITIES BELOW HAVE HELD THAT THIS WAS THE P ROFESSIONAL ACTIVITY OF THE ASSESSEE AND THEREFORE, THE ASSESSEE WAS LIABLE TO PENALTY FOR NOT GETTING ITS ACCOUNTS AUDITED AS THE TURNOVER EXCEEDED THE LIMIT MENTIONED IN SECTION 44AB(A) OF THE ACT. HOWEVER, WE FIND THAT ASSESSEE ITSELF DID NOT POSSESS ANY PROFESSIONAL DEGREE AND RATHER IT WAS ENGAGED I N COMMERCIAL ACTIVITIES. THERE IS DIFFERENCE BETWEEN BUSINESS AND PROFESSION . FOR CARRYING ON A PROFESSION, POSSESSION OF SOME PROFESSIONAL QUALIFI CATION IS MUST. FROM THE QUALIFICATION WE MEAN THAT THERE MUST BE SOME SPECI AL TRAINING OF PARTICULAR I.T.A. NO.770/LKW/2016 ASSESSMENT YEAR:2013-14 3 SKILL WHICH INVOLVE HIGH LEVEL EDUCATION. THE COMP ANY IN ITSELF CANNOT BE SAID TO BE HAVING ANY PROFESSIONAL QUALIFICATION OR EDUCATION. IT WAS RUNNING ONLY WITH A MOTIVE TO EARN PROFIT THROUGH ENGAGEMEN T OF SPECIALIZED DOCTORS AND WITH THE HELP OF PLANT & MACHINERY. THEREFORE, THE ASSESSEE COMPANY CANNOT BE SAID TO BE ENGAGED IN PROFESSIONAL ACTIVI TIES AND RATHER IT IS HELD TO BE ENGAGED IN BUSINESS ACTIVITIES. THEREFORE, T HE PROVISIONS OF SECTION 44AB(B) WILL APPLY FOR DETERMINING THE AMOUNT OF LI MIT REQUIRED FOR AUDIT OF ACCOUNTS. THE TURNOVER LIMIT FOR THE YEAR UNDER CO NSIDERATION WAS RS.60 LACS AND THE TURNOVER OF THE ASSESSEE WAS RS.54,45, 940/- THEREFORE, THE ASSESSEE WAS NOT LIABLE TO GET ITS ACCOUNTS AUDITED AND THEREFORE, THE PENALTY IMPOSED AND SUSTAINED BY LEARNED CIT(A) U/S 271B IS NOT JUSTIFIED AND HENCE IT IS DELETED. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE STANDS ALLOWED. (ORDER PRONOUNCED IN THE OPEN COURT ON 26/04/2019) SD/. SD/. ( A. D. JAIN ) ( T. S. KAPOOR ) VICE PRESIDENT ACCOUNTANT MEMBER DATED:26/04/2019 *SINGH COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. CONCERNED CIT 4. THE CIT(A) 5. D.R., I.T.A.T., LUCKNOW ASSISTANT REGISTRAR