M/s Sahara Poultry Farms, Panchkula V. ACIT, Chandigarh

ITA 874/CHANDI/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8417 (ITAT-CHANDIGARH)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-01-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: Not Allotted
• Assessment Year: 2003-2004
• Appeal Filed On: 29-07-2016
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MANJIT SINGH
• Keywords: Business income
• Section: 142(1); 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH,CHANDIGARH BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.874/CHD/2016 ASSESSMENT YEAR: 2003-04 M/S SAHARA POULTRY FARMS, VS THE ACIT, VILLAGE BHARELI, CENTRAL CIRCLE-II, BARWALA, PANCHKULA. CHANDIGARH. PAN: AAZFS0896F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI NEERAJ JAIN RESPONDENT BY : SHRI MANJIT SINGH DATE OF HEARING : 10.01.2017 DATE OF PRONOUNCEMENT : 13.01.2017 O R D E R PER BHAVNESH SAINI,JM THIS APPEAL BY ASSESSEE HAS BEEN DIRECTED AGAINST THE ORDER OF LD. CIT(APPEALS)-3 GURGAON DATED 26.05.2016 FOR ASSESSMENT YEAR 2003-04 CHALLENGING THE LEVY OF PENALTY UNDER SECTION 271A OF THE INCOME TA X ACT. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE ASSES SING OFFICER NOTED IN THE ASSESSMENT ORDER THAT THERE IS NO INFORMATION AVAILABLE ON RECORD IN RESPECT OF RETUR N FILED BY THE ASSESSEE UNDER SECTION 139 OF THE INCOME TAX 2 ACT. STATUTORY NOTICE WAS ALSO ISSUED UNDER SECTIO N 153C OF THE ACT AND SERVED UPON ASSESSEE, HOWEVER, ASSESSEE IN RESPONSE TO THE SAID NOTICE ALSO, DID N OT FILE RETURN OF INCOME. THE SPECIAL AUDIT WAS ALSO CONDU CTED IN THIS CASE BEING A CASE OF SEARCH. THE NOTICE UN DER SECTION 142(1) WAS ALSO ISSUED ALONGWITH QUESTIONNA IRE AND ASSESSEE WAS DIRECTED TO PRODUCE THE BOOKS OF ACCOUNT BUT ASSESSEE HAS NOT PRODUCED BOOKS OF ACCO UNT BEFORE ASSESSING OFFICER AT ANY STAGE. THE ASSESSEE SUBMITTED BEFORE ASSESSING OFFICER THAT IT IS NOT A BLE TO PRODUCE BOOKS OF ACCOUNT FOR THE YEAR UNDER CONSIDERATION AS THE SAME IS NOT TRACEABLE. THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS UND ER SECTION 271A OF THE ACT SEPARATELY FOR VIOLATION OF PROVISIONS OF SECTION 44AA OF THE INCOME TAX ACT. THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE AS TO WH Y PENALTY SHOULD NOT BE LEVIED UNDER SECTION 271A OF THE ACT. IN RESPONSE TO THAT, NO REPLY HAS BEEN FILED BY THE ASSESSEE. THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE FOR LEVY OF THE PENALTY BUT ASSESSEE ALSO DI D NOT FILE REPLY TO THE SAME. THE ASSESSING OFFICER REPR ODUCED SECTION 44AA OF THE ACT IN THE PENALTY ORDER AND NO TED THAT IN THE CASE OF THE ASSESSEE, ASSESSEE HAD NOT FILED RETURN OF INCOME AS WELL AS DID NOT PRODUCE THE BOO KS OF ACCOUNT. THE ASSESSING OFFICER ON PERUSAL OF THE RE CORDS OF THE ASSESSEE, OBSERVED THAT IN SUCCEEDING YEAR, INCOME OF THE ASSESSEE HAS EXCEEDED RS. 1,20,000/- AND ITS TURNOVER HAS EXCEEDED RS. 10 LACS. THEREFORE, 3 ASSESSEE WAS NOT ONLY REQUIRED TO MAINTAIN BOOKS OF ACCOUNT BUT ALSO RETAIN THE SAME AS REQUIRED UNDER RULE 6F OF IT RULES. THE ASSESSING OFFICER ACCORDINGLY LEVIED THE PENALTY UNDER SECTION 271A OF INCOME TAX ACT IN A SUM OF RS. 25,000/-. 3. THE ASSESSEE CHALLENGED THE PENALTY ORDER BEFORE LD. CIT(APPEALS). THE LD. CIT(APPEALS) ISSUED SEVE RAL NOTICES TO THE ASSESSEE BUT NONE HAVE BEEN COMPLIED WITH. THE LD. CIT(APPEALS) IN THE ABSENCE OF ANY REPRESENTATION FROM THE SIDE OF THE ASSESSEE FOUND THAT ASSESSEE HAS NOT MAINTAINED BOOKS OF ACCOUNT AS PER REQUIREMENT OF SECTION 44A OF THE ACT, THEREFORE, P ENALTY WAS CONFIRMED AND APPEAL OF THE ASSESSEE HAS BEEN DISMISSED. 4. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT ASSESSING OFFICER COMPUTED THE INCOME OF THE ASSESS EE AT RS. 1,12,562/- THEREFORE, ASSESSEE IS NOT REQUIR ED TO MAINTAIN BOOKS OF ACCOUNT AS PER SECTION 44AA OF TH E IT ACT. ON THE OTHER HAND, LD. DR RELIED UPON ORDERS OF AUTHORITIES BELOW AND SUBMITTED THAT ASSESSEE HAS B EEN TAKING CONTRADICTORY PLEA BEFORE THE AUTHORITIES BE LOW AND DID NOT FILE ANY RESPONSE TO THE PENALTY NOTICE . THEREFORE, PENALTY HAVE BEEN CORRECTLY LEVIED BECAU SE THE ASSESSING OFFICER ULTIMATELY COMPUTED INCOME OF THE ASSESSEE AT RS. 3,60,626/- AND ASSESSEE ADMITTEDLY DID NOT FILE ANY APPEAL ON QUANTUM EVEN BEFORE LD. CIT(APPEALS). 4 5. WE HAVE CONSIDERED RIVAL SUBMISSIONS. THE ASSESSING OFFICER IN THE PENALTY ORDER HAS REPRODUC ED SECTION 44AA OF THE ACT, ACCORDING TO WHICH IF THE INCOME FROM BUSINESS AND PROFESSION EXCEEDS RS. 1,20,000/- OR HIS TOTAL SALES TURNOVER OR GROSS REC EIPTS, AS THE CASE MAY BE, HAVE EXCEEDED RS. 10 LACS IN AN Y ONE OF THE THREE YEARS IMMEDIATELY PRECEDING THE PREVIOUS YEAR, THEN ASSESSEE IS REQUIRED TO KEEP AN D MAINTAIN SUCH BOOKS OF ACCOUNT AND OTHER DOCUMENTS AS MAY ENABLE THE ASSESSING OFFICER TO COMPUTE HIS TOT AL INCOME IN ACCORDANCE WITH THE PROVISIONS OF THE ACT . THE ASSESSING OFFICER ALSO NOTED THAT ASSESSEE DID NOT RESPOND TO ANY OF THE STATUTORY NOTICES AND DID NOT PRODUCE BOOKS OF ACCOUNT AT THE ASSESSMENT STAGE. THE ASSESSING OFFICER NOTED AS PER RECORD IN SUCCEEDING YEARS, INCOME OF THE ASSESSEE HAS EXCEEDED RS. 1,20,000/- AND TURNOVER ALSO EXCEEDED RS. 10LACS. THEREFORE, ASSESSEE WAS REQUIRED TO KEEP AND MAINTA IN SUCH BOOKS OF ACCOUNT AS REQUIRED BY LAW. IT IS INTERESTING TO NOTE THAT BEING A SEARCH CASE, THE ASSESSEE NEITHER FILED RETURN OF INCOME UNDER SECTI ON 139 OF THE ACT WITHIN TIME NOR FILED ANY RETURN OF INCOME IN RESPONSE TO NOTICE SERVED UNDER SECTION 153C OF THE ACT. THE ASSESSEE DID NOT PRODUCE BOOKS OF ACCOUNT BEFORE ASSESSING OFFICER AT THE TIME OF ASSESSMENT PROCEEDINGS DESPITE GIVING FINAL OPPORTUNITY. THE S PECIAL AUDIT WAS DIRECTED TO BE CONDUCTED IN THIS CASE BUT ASSESSEE DID NOT REFER TO SAID AUDIT IN THIS CASE D URING 5 THE COURSE OF HEARING. THE ASSESSEE FILED SOME BAL ANCE SHEET FOR ENDING 31.03.2004 AND ON THAT BASIS, PROF IT WAS TAKEN AT RS. 1,12,562/-. THE LD. COUNSEL FOR T HE ASSESSEE, THEREFORE, ON THAT BASIS SUBMITTED THAT I T WAS THE BALANCE SHEET ENDING 31.03.2003 AND TOTAL INCOM E IS LESS THAN RS. 1,20,000/- AS REQUIRED UNDER SECTION 44AA OF THE ACT. HOWEVER, WE DO NOT AGREE WITH CONTENTI ON OF LD. COUNSEL FOR THE ASSESSEE BECAUSE ASSESSEE FAILE D TO PRODUCE BOOKS OF ACCOUNT BEFORE THE ASSESSING OFFIC ER AT ANY STAGE IN ORDER TO SUPPORT THE INCOME SO DECLARE D AS PER PROFIT & LOSS ACCOUNT AND BALANCE SHEET. THE ASSESSEE, THROUGHOUT THE PROCEEDINGS REMAINED EX-PA RTE AND DID NOT RESPOND TO ANY OF THE STATUTORY NOTICES . THE ASSESSING OFFICER IN THE ABSENCE OF ANY MATERIAL, COMPUTED THE INCOME OF THE ASSESSEE AT RS. 3,60,626 /- WHICH EXCEEDED RS. 1,20,000/- AS PER SECTION 44AA O F THE ACT. FURTHER, AS NOTED ABOVE, THE INCOME OF RS . 1,12,562/- WAS NEVER DECLARED BY ASSESSEE IN THE RE TURN OF INCOME UNDER SECTION 139 OR UNDER SECTION 153C O F THE ACT THEREFORE, AUTHENTICITY OF SAME ITSELF IS I N DOUBT, PARTICULARLY WHEN THE ASSESSEE FAILED TO PRODUCE BO OKS OF ACCOUNT BEFORE ASSESSING OFFICER AT ANY STAGE. T HE ASSESSEE ALSO FAILED TO PRODUCE ANY EVIDENCE BEFORE THE AUTHORITIES BELOW WHETHER THE TOTAL SALES, TURNOVER OR GROSS RECEIPTS WERE LESS THAN RS. 10 LACS IN ASSESS MENT YEAR UNDER APPEAL BECAUSE EITHER OF THE CONDITIONS MAY BE SATISFIED FOR APPLYING PROVISIONS OF SECTION 44A A OF THE ACT IN THE MATTER. 6 5(I) IT MAY ALSO BE NOTED HERE THAT EVEN DURING THE PENALTY PROCEEDINGS AND APPELLATE PROCEEDINGS BEFOR E LD. CIT(APPEALS), ASSESSEE DID NOT RAISE ANY SUBMISSION TO CHALLENGE THE LEVY AND IMPOSITION OF PENALTY. THIS ITSELF IS SUFFICIENT TO CONFIRM LEVY OF PENALTY AGAINST TH E ASSESSEE. IN THE ABSENCE OF ANY COGENT AND RELIABL E EVIDENCE OR MATERIAL ON RECORD IN FAVOUR OF THE ASS ESSEE, WE ARE OF THE VIEW THE AUTHORITIES BELOW HAVE CORRE CTLY LEVIED THE PENALTY AGAINST THE ASSESSEE IN NOT KEEP ING AND MAINTAINING THE BOOKS OF ACCOUNT AND OTHER DOCUMENTS AS REQUIRED BY RULE/LAW. IN THE ABSENCE OF ANY MATERIAL ON RECORD, WE DO NOT FIND ANY JUSTIFIC ATION TO INTERFERE WITH THE ORDERS OF AUTHORITIES BELOW. APPEAL OF THE ASSESSEE HAS NO MERIT, SAME IS ACCORDINGLY DISMISSED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (ANNAPURNA GUPTA) (BHAVNESH SAIN I) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 13 TH JANUARY,2017. POONAM COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. THE CIT,DR ASSISTANT REGISTRAR, ITAT/CHD