GOPAL SHARAN GUPTA, Jaipur V. ITO, Alwar

ITA 802/JPR/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5593 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2011-2012
• Appeal Filed On: 07-09-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POONAM RAI DCIT DR DHK
• Assessee Lawyers: R N MAHARWAL

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 802/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2011-12 SHRI GOPAL SHARAN GUPTA 948, BAWANJI KA MOHALLA MAIN BAZAR, MANOHARPUR, JAIPUR CUKE VS. THE ITO WARD- BEHROR BEHROR LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: ABOPG 3955 F VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: SHRI R.N. MAHARWAL, CA JKTLO DH VKSJ LS@ REVENUE BY :SMT. POONAM RAI, DCIT- DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 08/02/2017 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 09 /02/2017 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDER OF THE LD. CIT(A), ALWAR DATED 21-06-2016 FOR THE ASSESSMENT YEAR 201 1-12 RAISING THEREIN GROUND OF APPEAL AS UNDER:- 1. ON THE FACTS AND IN CIRCUMSTANCES OF THE CASE THE LD ITO ERRED IN IMPOSING PENALTY U/S 271A AND SIMULTAN EOUSLY LD. CIT(A) ERRED IN SUSTAINING SUCH PENALTY AMOUNTING T O RS. 25,000/- IN SPITE OF MAINTENANCE OF BOOKS OF ACCOUNT AND GET THEM AUDITED, WHICH ARE IN RECORD AND HENCE LEVY OF PENALTY IS IL LEGAL, UNJUSTIFIED AND LIABLE TO QUASH. ITA NO. 802/JP/2016 SHRI GOPAL SHARAN GUPTA VS. ITO, WARD- BEHROR, BEHR OR 2 2.1 APROPOS SOLITARY GROUND OF THE ASSESSEE, THE FA CTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) IS AS UNDER:- 4.3 I HAVE GONE THROUGH THE PENALTY ORDER AS WELL A S SUBMISSIONS MADE BY THE APPELLANT AND FIND THAT A PENALTY OF RS . 25,000 HAS BEEN IMPOSED BY THE AO U/S 271A OF THE IT ACT ON THE GROUND THAT CASH TRANSACTIONS MADE IN INDUSLND BANK HAVE NOT BEEN RECORDED IN THE BOOKS O F ACCOUNTS MAINTAINED BY THE APPELLANT AS REQUIRED UNDER THE PROVISIONS OF S ECTION 44AA OF THE IT ACT. AO HAS STATED THAT IN THE COURSE OF ASSESSMENT PROC EEDINGS TOTAL CASH DEPOSITS IN THE SAVINGS BANK ACCOUNT OF RS. 1,80,74,580 WERE FOUND AND IN REPLY TO THE SHOW CAUSE LETTER APPELLANT HAS ACCEPTED THAT RS. 1 ,83,28,395 ARE HIS TURNOVER OF ANOTHER BUSINESS AND RS. 1,80,78,643 ARE PURCHA SES AND GP OF RS. 2,49,752 FOR THE YEAR UNDER CONSIDERATION, WHICH HA S NOT BEEN DECLARED IN THE RETURN OF INCOME FILED. AO HAS ESTIMATED IN THE NP RATE OF 8% ON THE TOTAL TURNOVER OF UNDISCLOSED BUSINESS AND ESTIMATED THE PROFITS AT RS. 14,92,862. 4.4 THE APPELLANT HAS STATED THAT AO HAS IMPOSED PE NALTY U/S 271A OF THE IT ACT FOR NON MAINTENANCE OF BOOKS OF ACCOU NTS FOR BUSINESS, WHICH IS NOT DISCLOSED. IT IS SUBMITTED THAT NO PENALTY COUL D BE IMPOSED CONSIDERING THE FACT THAT ONLY TRANSACTIONS PERTAINING TO THIS BANK ACCOUNT HAVE NOT BEEN RECORDED IN THE REGULAR BOOKS OF ACCOUNTS. 4.5 HAVING CONSIDERED THE MATERIAL AVAILABLE ON REC ORD, I FIND THAT APPELLANT HAS ACCEPTED THAT TURNOVER OF RS. 1,83,2 8,395 PERTAIN TO THE UNDISCLOSED BUSINESS FOR WHICH NO TRANSACTIONS WERE RECORDED IN THE BOOKS OF ACCOUNTS, WHICH WERE AUDITED. HOWEVER, THERE IS NO DISPUTE THAT THE BANK ACCOUNT IN WHICH CASH DEPOSITS OF RS. 1,80,47,580 W ERE FOUND TO HAVE BEEN MADE DURING THE YEAR PERTAINS TO THIS UNACCOUNTED B USINESS, WHICH HAS NOT BEEN DISCLOSED IN THE RETURN OF INCOME. 4.6 IT IS SEEN THAT AS PER PROVISIONS OF SECTION 2 71A OF THE INCOME TAX ACT, IF ANY PERSON FAILS TO MAINTAIN THE BOOKS OF ACCOUNTS AS REQUIRED U/S 44AA OF THE INCOME TAX ACT, AO MAY IMPOSE A PENALTY UNDER THE PROVISIONS OF SECTION 271A OF THE IT ACT. THE THRESHOLD LIMIT OF THE TURNOVER FOR MAINTAINING THE BOOKS OF ACCOUNTS IS RS. 10 LACS U/ S 44AA OF THE IT ACT. THEREFORE, THE BOOKS OF ACCOUNTS WHICH WERE NOT MAI NTAINED FOR THE UNACCOUNTED BUSINESS AND ADMITTEDLY THE TURNOVER OF THIS BUSINESS I.E. RS. 1,83,28,395 EXCEEDS THE LIMIT AS PROVIDED FOR UNDE R THE PROVISIONS OF SECTION ITA NO. 802/JP/2016 SHRI GOPAL SHARAN GUPTA VS. ITO, WARD- BEHROR, BEHR OR 3 44AA OF THE IT ACT. IT IS NOT A CASE, WHERE A TAX P AYER IS NOT AWARE ABOUT THE PROVISIONS OF SECTION 44AA OF THE IT ACT, AS PART OF THE BUSINESS ACTIVITIES HAVE BEEN DISCLOSED BY FILING A RETURN O F INCOME, MAINTAINING BOOKS OF ACCOUNTS AND GETTING THE SAME AUDITED AS WELL. 4.7 IN VIEW OF THE ABOVE FACTS, WHERE APPELLANT HAS DELIBERATELY NOT DECLARED THIS BANK ACCOUNT PERTAINING TO UNACCOUNTE D BUSINESS AND IS GUILTY OF NOT MAINTAINING THE BOOKS OF ACCOUNTS AS REQUIRED U /S 44AA OF THE IT ACT THAN APPELLANT HAS TO BEAR THE CONSEQUENCE OF NON COMPLI ANCE WITH THE PROVISIONS OF THE IT ACT. THEREFORE, I HOLD THAT AO WAS JUSTI FIED IN INITIATING THE PENALTY PROCEEDINGS U/S 271A OF THE IT ACT AND ACCORDINGLY, I CONFIRM THE PENALTY OF RS. 25,000 IMPOSED BY THE AO. 2.2 DURING THE COURSE OF HEARING, THE LD. AR OF THE ASS ESSEE PRAYED FOR DELETION OF PENALTY IMPOSED BY THE LOWER AUTHORITIE S FOR WHICH THE LD. AR OF THE ASSESSEE FILED THE WRITTEN SUBMISSION WHICH HAS BEEN TAKEN INTO CONSIDERATION. 2.3 DURING THE COURSE OF HEARING, THE LD. DR RELIED ON THE ORDERS OF THE LOWER AUTHORITIES. 2.4 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOTED FROM THE ASSESSMEN T ORDER DATED 14-02- 2014 WHEREIN THE AO HAS MENTIONED THAT SHRI ASHOK K UMAR, LD. AR OF THE ASSESSEE ALONGWITH ASSESSEE ATTENDED THE ASSESS MENT PROCEEDINGS FROM THE TIME TO TIME AND FURNISHED THE AUDIT REPOR T OBTAINED U/S 44AB OF THE ACT AND DETAILS AND DOCUMENTS WERE PLACED ON RE CORD. IT IS ALSO NOTED THAT SUPPORTING BILLS AND VOUCHERS WERE PRODUCED BY THE ASSESSEE BEFORE ITA NO. 802/JP/2016 SHRI GOPAL SHARAN GUPTA VS. ITO, WARD- BEHROR, BEHR OR 4 THE AO FOR EXAMINATION ON TEST CHECK BASIS. IT IS A LSO NOTED THAT THE AO HAD INITIATED THE LEVY OF PENALTY U/S 271A OF T HE ACT FOR FAILURE TO KEEP OR MAINTAIN THE BOOKS OF ACCOUNT. IT IS FURTHE R NOTED THAT THE AO IN PENALTY PROCEEDINGS IMPOSED THE PENALTY OF RS. 25,0 00/- U/S 271A THE ACT WHICH HAS BEEN SUSTAINED BY THE LD. CIT(A) FOR THE REASON THAT THE ASSESSEE HAS NOT MAINTAINED THE BOOKS OF ACCOUNT FO R THE UNACCOUNTED BUSINESS AND THE TURNOVER OF THE ASSESSEE WAS MORE THAN THE THRESHOLD LIMIT. TAKING INTO CONSIDERATION ALL THESE FACTS AN D CIRCUMSTANCES OF THE CASE, IT IS OBSERVED THAT THE AO HAS HIMSELF ADMITT ED THAT THE ASSESSEE HAS MAINTAINED THE BOOKS OF ACCOUNTS AND PRODUCED THE S AME ALONGWITH BILLS AND VOUCHERS AND ALSO THE ASSESSEE FURNISHED THE AU DIT REPORT OBTAINED U/S 44AB OF THE ACT. THERE MAY BE CHANCES THAT THE BOOK S OF ACCOUNT MAY BE DEFECTIVE OR NOT REFLECTING THE WHOLE BUSINESS AFFA IRS OF THE ASSESSEE, HOWEVER, FOR THE SAME, THERE IS A DIFFERENT PROVISI ON FOR IMPOSING THE PENALTY AND HENCE, PENALTY, FOR NOT MAINTAINING THE BOOKS OF ACCOUNT, U/S 271A CANNOT BE LEVIED. IN SUCH A SITUATION, I DIREC T TO DELETE THE PENALTY OF RS. 25,000/- IMPOSED BY THE LOWER AUTHORITIES U/S 2 71A OF THE ACT. THUS THE APPEAL OF THE ASSESSEE IS ALLOWED. ITA NO. 802/JP/2016 SHRI GOPAL SHARAN GUPTA VS. ITO, WARD- BEHROR, BEHR OR 5 3.0 IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 09 -02-20 17. SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 09 /02/ 2017 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI GOPAL SHARAN GUPTA, JAIPUR 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- BEHROR 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 802/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR