Shri Sunil Kumar Lokwani, Harda V. THE ITO-2, Itarsi

ITA 887/IND/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 5652 (ITAT-INDORE)
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 19-10-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 24-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S N AGRAWAL
• Assessee Lawyers: MOHD JAVED
• Keywords: Reasonable cause
• Section: 273B; 92E; 27; 11

Judgement Text

SUNIL KUMAR LOKWANI ITA 887/IND/2016 1 , , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE .., ..!', #$ # !% BEFORE SHRI D.T. GARASIA, JUDICIAL MEMBER AND SHRI O.P. MEENA, ACCOUNTANT MEMBER I.T.A. NO. 887/IND/2016 ASSESSMENT YEAR: 2009-10 SUNIL KUMAR LOKWANI HARDA PAN AGJPL 8171E :: APPELLANT VS ITO, ITARSI :: RESPONDENT REVENUE BY SHRI S.N. AGRAWAL ASSESSEE BY SHRI MOHD. JAVED ! ' #$ DATE OF HEARING 19.10.2016 %&'( #$ DATE OF PRONOUNCEMENT 7.11.2016 * O R D E R PER SHRI D.T. GARASIA, JM THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LEARNED CIT(A)-I, BHOPAL, DATED 10.6.201 6. SUNIL KUMAR LOKWANI ITA 887/IND/2016 2 2. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE HAS FILED HIS RETURN OF INCOME ON 15.10.2010 DECLARING T OTAL INCOME AT RS.81,860/- FROM REMUNERATION AND INTEREST INCOME FROM M/S VISHWANATH TRADING COMPANY. AIR INFORMATION REVEALED THAT THE ASSESSEE HAS DEPOSITED RS.2,35,15,941/- IN SAVINGS BANK ACCOUNT WITH PUNJAB NATIONAL BANK. THIS FACT WAS NOT DISCLOSED IN THE RETURN OF INCOME. WHEN ASKED TO EXPLAIN THE SOURCE OF CASH DEPOS IT IN THE BANK, IT WAS SUBMITTED THAT THE SAID BANK ACCOUNT PERTAINED TO BUSINESS. THE ASSESSING OFFICER DID NOT ACCEPT THE CONTENTION OF THE ASSESSEE AS THE ASSESSEE HAS NOT FILED COPY OF AUDIT REPORT WITH THE RETURN OF INCOME FILE D ON 15.10.2010. THEREFORE, THE ASSESSEE HAS HUGE TURNOVE R OF RS.2,36,36,082/- AND AS SUCH HE WAS LIABLE TO GET HIS ACCOUNTS AUDITED AND SHOULD HAVE FILED ITR-IV MENTIONI NG THE DETAILS OF AUDITOR AND THE AUDIT REPORT, BUT THE ASS ESSEE HAS FILED HIS RETURN OF INCOME IN FORM NO. ITR-III AN D SUNIL KUMAR LOKWANI ITA 887/IND/2016 3 NOTHING HAS BEEN MENTIONED ABOUT AUDIT REPORT. THEREF ORE, THE ASSESSING OFFICER HELD THAT IT WAS AN AFTERTHOUGHT AND THE ASSESSEE FAILED TO GET HIS ACCOUNTS AUDITED. THER EFORE, PENALTY U/S 271B OF THE ACT WAS INITIATED. THE MATTER CARRIED TO THE LEARNED CIT(A) AND THE LEARNED CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. NOW T HE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ASSESSING OFFICER HAS LEVIED THE PENALTY U/S 271B OF THE ACT WITHOUT ANY BASIS. THE ASSESSEE HAS GOT HIS BOO KS AUDITED FROM A CA. THE COPY OF THE TAX AUDIT REPORT HAS ALREADY BEEN FILED BEFORE THE ASSESSING OFFICER. THE AUDIT REPORT WAS SIGNED BY THE CA ON 30.9.2009. DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR 2009-10 THERE WAS NO REQUIREMENT OF FILING COPY OF TAX AUDIT REPORT WITH THE INCOME TAX DEPARTMENT. THE LEARNED COUNSEL F OR THE ASSESSEE SUBMITTED THAT AS PER CBDT CIRCULAR NO. SUNIL KUMAR LOKWANI ITA 887/IND/2016 4 5/2007 DATED 26.7.2007 THE CBDT HAS DONE AWAY WITH TH E REQUIREMENT OF FURNISHING AUDIT REPORT AS OBTAINED U/S 44AB OF THE ACT WHERE THE RETURN OF INCOME IS FILED ELECTRONICALLY. THE FURTHER SUBMITTED THAT THE CALCUTT A BENCH OF THE TRIBUNAL IN ITA NO. 1652/KOL/2011 HAS DELETED THE PENALTY IN THE CASE OF SINGH CONSTRUCTION . SIMILAR FINDING WAS GIVEN BY THE HYDRABAD BENCH OF THE TRIBUNAL IN THE CASE OF GANESH SAND BLASTING WORKS, ITA NOS. 1030 & 1031/HYD/2015. 4. WE HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE SI DES. WE FIND THAT THE ISSUE IN CONTROVERSY IS COVERED BY THE CIRCULAR OF CBDT NO.9/2006 DATED 10.10.2006 WHICH READS AS UNDER :- CIRCULAR NO. 9/2006, DATED 10-10-2006 NEW RETURN FORMS FOR ASSESSMENT YEAR 2006-07 - MATT ERS CONNECTED THERETO. THE CENTRAL BOARD OF DIRECT TAXES HAVE NOTIFIED FOL LOWING NEW RETURN FORMS FOR ASSESSMENT YEAR 2006-07: ( I ) FORM NO. 2F VIDE NOTIFICATION SO NO.848(E) EFFECTIVE FROM 1ST JUNE, 2006. THIS FORM MAY BE USED ONLY BY ASSESSEES BEING RESIDENT INDIVIDUAL / HINDU UNDIVIDED FAMILY (HUF) ( A ) NOT HAVING INCOME FROM BUSINESS OR PROFESSION OR AGRICULTURAL INCOME OR CAPITAL GAINS (EXCEPT LONG-TERM CAPITAL GAINS FROM TRANSAC TIONS ON WHICH SECURITIES TRANSACTION TAX PAID); OR SUNIL KUMAR LOKWANI ITA 887/IND/2016 5 ( B ) NOT CLAIMING RELIEF UNDER SECTION 89 IN RESPECT OF ARREARS OR ADVANCE OF SALARY; ( C ) NOT OWNING MORE THAN ONE HOUSE PROPERTY. ( II ) FORM NO. 1, FORM NO. 2, FORM NO. 3, AND FORM NO. 3B VIDE NOTIFICATION S.O. NO. 1163(E) EFFECTIVE FROM 24.7.2006. THE DETAILS OF THESE FORM S ARE AS UNDER ( A ) FORM NO.1 IS A COMBINED FORM FOR RETURN OF INCOM E AND RETURN OF FRINGE BENEFITS FOR COMPANIES OTHER THAN THOSE CLAIMING EXEMPTION UNDER SECTION 11; ( B ) FORM NO.2 IS A COMBINED FORM FOR RETURN OF INCOM E AND RETURN OF FRINGE BENEFITS FOR NON-CORPORATE ASSESSEES ( I ) NOT CLAIMING EXEMPTION UNDER SECTION 11, AND ( II ) HAVING INCOME FROM BUSINESS OR PROFESSION; ( C ) FORM NO.3 IS A FORM FOR RETURN OF INCOME FOR NON -CORPORATE ASSESSEES NOT CLAIMING EXEMPTION UNDER SECTION 11 AND NOT HAVING INCOME FR OM BUSINESS OR PROFESSION; ( D ) FORM NO.3B IS A RESIDUAL FORM FOR RETURN OF FRIN GE BENEFITS FOR THE ASSESSEES ( I ) WHO ARE REQUIRED TO FURNISH THE RETURN OF INCOME AND ALSO THE RETURN OF FRINGE BENEFITS BUT- ( A ) HAVE FILED THE RETURN OF INCOME IN FORM NO. 1 OR FORM NO. 2 OR FORM NO. 2D OR FORM NO. 3A FOR THE ASSESSMENT YEAR 2006-07 B EFORE THE NOTIFICATION OF THIS FORM NO. 3B, OR ( B ) OPTS TO FILE THE RETURN OF INCOME IN FORM NO. 2D ( II ) WHO ARE NOT REQUIRED TO FURNISH THE RETURN OF IN COME BUT ARE REQUIRED TO FURNISH THE RETURN OF FRINGE BENEFITS. THESE FORMS ARE AVAILABLE AT HTTP//.INCOMETAXINDIAEFILING.GOV.IN. IF A TAXPAYER INTENDS TO FILE A RETURN FOR ANY EARLIER ASSESSMENT YEAR HE WILL HAVE TO USE THE OLD FORMS. 2. THESE RETURN FORMS HAVE BEEN DESIGNED TO MAKE THEM AMENABLE FOR ELECTRONIC FILING. IN A CASE WHERE THE TAXPAYER DOES NOT USE A DIGITAL SIGNATURE , A TWO STEP-PROCEDURE HAS BEEN PRESCRIBED FOR FURNISHING THESE FORMS ELECTRONICALLY WITHOUT DIGIT AL SIGNATURE. FIRST STEP IS TO TRANSMIT THE DETAILS OF THE RETURN AND SCHEDULES THERETO ELECTRONICALLY (WITHOUT DIGITAL SIGNATURE) TO THE DESIGNATED WEB-SITE AND THEREAFTER TO FILE A PAPER RETURN. THE DATE OF THE ELECTRONIC TRANSMISSION AND ACKNOWLEDGEMENT NUMBER GIVEN ELECTRONICALLY BY THE INCOME-TAX DEPARTMENT FOR SUCH TRANSMISSION HAS TO BE FILLED IN THE PAPER RETURN. HOWEVER, IF THE RETURN IS FURNISHED ELECTRONICALLY UNDER THE DIGITAL SIGNATURE, IT WILL NOT BE NECESSA RY TO FURNISH THE PAPER RETURN. 3. APART FROM PROCEDURE MENTIONED IN PARA 2, AN ASSES SEE MAY ALSO FILE, AT HIS OPTION, AN E-RETURN IN ACCORDANCE WITH FOLLOWING SCHEMES: ( I ) ELECTRONIC FURNISHING OF RETURN OF INCOME SCHEME , 2004 [NOTIFIED VIDE SO NO. 1073(E) DATED 30-9-2004]. UNDER THIS SCHEME, E-RETURN HAS T O BE FILED THROUGH E-RETURN INTERMEDIARY, FOLLOWED BY A PAPER RETURN. THE SCHEM E IS APPLICABLE TO ALL CLASS OF TAXPAYERS WHO ARE ASSESSED OR ASSESSABLE TO TAX AT ANY OF THE CITIES SPECIFIED IN SCHEDULE A OF THE SCHEME ( I.E. NET-WORKED CITIES); ( II ) FURNISHING OF RETURN OF INCOME INTERNET SCHEME, 2004. [NOTIFIED VIDE SO NO. 1074(E) DATED 30-9-2004] UNDER THIS SCHEME, E-RETURN HAS TO BE FILED UNDER THE DIGITAL SIGNATURE. THE SCHEME IS APPLICABLE ONLY TO INDIVIDUAL TAXPAYERS WHO HAS INCOME UNDER THE HEAD SUNIL KUMAR LOKWANI ITA 887/IND/2016 6 SALARIES BUT DOES NOT HAVE ANY INCOME UNDER THE H EAD PROFITS AND GAINS OF BUSINESS OR PROFESSION AND WHO ARE ASSESSED OR ASSESSABLE TO T AX AT ANY OF THE CITIES SPECIFIED IN SCHEDULE A OF THE SCHEME (I.E. NET-WORKED CITIES) ; 4. ALL CORPORATE TAXPAYERS ARE NECESSARILY REQUIRED T O FURNISH THE RETURN FOR ASSESSMENT YEAR 2006-07 ELECTRONICALLY AFTER 24-7-2006. THUS, A COM PANY HAS TO NECESSARILY FILE E-RETURN EITHER UNDER DIGITAL SIGNATURE OR IN ACCORDANCE WITH TWO S TEP PROCEDURE EXPLAINED IN PARA 2 OR IN ACCORDANCE WITH THE SCHEME MENTIONED AT PARA 3( I ). HOWEVER, FOR OTHER CLASS OF TAXPAYERS, IT IS OPTIONAL TO FURNISH AN E-RETURN. 5. FURTHER, THESE FORMS ARE NOT TO BE ACCOMPANIED BY ANY ATTACHMENT/ ANNEXURE. TAXPAYERS SHOULD NOT ENCLOSE WITH THESE RETURN FORMS ANY STAT EMENT SHOWING THE COMPUTATION OF INCOME OR TAX OR NOTES THERETO, COPIES OF BALANCE-SHEET, PROF IT AND LOSS ACCOUNT OR NOTES THERETO, TDS/ TCS CERTIFICATE, PROOF OF PAYMENT OF ADVANCE TAX OR SEL F-ASSESSMENT TAX, AUDIT REPORT OR ANY OTHER DOCUMENT. 6. FOLLOWING CLARIFICATIONS ARE HEREBY ISSUED IN RESP ECT OF CERTAIN ISSUES ARISING FROM FURNISHING THE RETURNS IN ABOVE MENTIONED FORMS: ( I ) THE REPORT OF AUDIT UNDER SECTION 44AB IS NOT TO BE ATTACHED WITH THE RETURN. IT SHOULD NOT BE FURNISHED SEPARATELY ALSO BEFORE OR AFTER THE DUE D ATE. HOWEVER, AN ASSESSEE SHOULD GET THE REPORT OF AUDIT FROM AN ACCOUNTANT UNDER SAID SECTI ON BEFORE THE DUE DATE OF THE FURNISHING OF THE RETURN AND SHOULD FILL OUT THE RELEVANT COLUMNS OF THESE FORMS ON THE BASIS OF SUCH REPORT. THE ASSESSEE SHOULD RETAIN THE REPORT WITH HIMSELF. IT MAY BE FURNISHED IN ORIGINAL DURING THE ASSESSMENT PROCEEDINGS. NO PENALTY UNDER SECTION 27 1B SHALL BE INITIATED OR LEVIED FOR NOT FURNISHING THE TAX AUDIT REPORT ON OR BEFORE THE DU E DATE. HOWEVER, IF THE AUDIT REPORT HAS NOT BEEN OBTAINED BEFORE THE DUE DATE, PROVISIONS OF SE CTION 271B SHALL BE ATTRACTED. ( II ) WHILE PROCESSING THE RETURN UNDER SECTION 143(1) , THE CREDIT FOR TAX DEDUCTED AT SOURCE (TDS)/ TAX COLLECTED AT SOURCES (TCS) SHALL BE ALLO WED ON THE BASIS OF DETAILS FURNISHED IN THE RELEVANT SCHEDULES OF THESE RETURNS AS IF THE T DS/ TCS CERTIFICATES HAVE BEEN FILED. ( III ) THESE RETURNS ARE NOT TO BE ACCOMPANIED WITH ANY OTHER DOCUMENT INCLUDING ANY STATUTORY FORM OR REPORT OF AUDIT (OTHER THAN THE REPORT UNDE R SECTION 92E) WHICH IS OTHERWISE REQUIRED TO BE FURNISHED BEFORE THE DUE DATE OR ALONG WITH T HE RETURN FOR MAKING ANY CLAIM. THE PROVISIONS OF THE LAW SHALL BE DEEMED TO HAVE BEEN COMPLIED WITH IN RESPECT OF THE REQUIREMENT OF THE FILING OF THE ATTACHMENTS OR DOC UMENTS OR REPORTS ALONG WITH THE RETURN. NO PENALTY SHALL BE INITIATED/ LEVIED FOR NOT FURNI SHING SUCH DOCUMENTS. ALL THESE DOCUMENTS SHOULD BE RETAINED BY THE TAXPAYERS AND BE FURNISHE D IN ORIGINAL DURING THE SCRUTINY PROCEEDINGS. ( IV ) THE REPORT AS REQUIRED UNDER SECTION 92E OF THE INCOME-TAX ACT SHALL CONTINUE TO BE FURNISHED BEFORE THE DATE SPECIFIED IN RULE 10E. ( V ) IN THE CASE OF THE OLD FORMS, THE ASSESSEE COULD ENCLOSE DOCUMENTS, FURNISH REASONS AND MAKE DISCLOSURES IN SUPPORT OF CLAIMS MADE BY HIM. HOWEVER, IT IS NOT POSSIBLE TO DO SO IN CASE OF NEW FORMS AS THESE ARE ANNEXURE-LESS. ACCOR DINGLY, THE ASSESSEE MAY, IN PURSUANCE TO THE FIRST NOTICE ISSUED UNDER SECTION 143(2), AV AIL OF THE OPPORTUNITY TO FILE DOCUMENTS, FURNISH REASONS AND MAKE DISCLOSURES IN SUPPORT OF VARIOUS CLAIMS MADE BY HIM IN THE RETURN FILED IN NEW FORM. ( VI ) IN CASE, A RETURN IS FURNISHED UNDER DIGITAL SIG NATURE, THE DATE OF SUCH FURNISHING SHALL BE THE DATE OF FURNISHING THE RETURN-. IN CASE, A RETURN I S FURNISHED UNDER TWO- STEP PROCEDURE AS SUNIL KUMAR LOKWANI ITA 887/IND/2016 7 EXPLAINED IN PARA 2 OR IN ACCORDANCE WITH THE SCHEM E MENTIONED AT PARA 3(I), THE DATE OF FURNISHING THE E-RETURN WILL BE THE DATE OF FURNISH ING THE RETURN ONLY IF ( A ) PAPER RETURN HAS BEEN FILED WITHIN FIFTEEN DAYS FROM THE DATE OF FILING THE E-RETURN OR WITHIN ONE MONTH FROM THE DATE OF ISSUE OF THIS CIR CULAR, WHICHEVER IS LATER; AND ( B ) PAPER RETURN TALLIES WITH THE E-RETURN. IN CASE CONDITION IN ( A ) OR ( B ) ABOVE IS NOT SATISFIED, THE PAPER RETURN SHALL BE TAKEN TO BE THE RETURN AND DATE OF FILING THE PAPER RETURN SHALL BE TAKEN AS THE DATE OF FILING THE RETURN. ( VII ) THE E-RETURN HAS TO BE FILED AT HTTP://INCOMETAXINDIAEFILING.GOV.IN. THE PAPER RETURN, IF ANY, IN RESPECT OF SUCH E-RETUMS SHALL BE FILED EITHER A T SEPARATE COUNTER(S) TO BE SET UP FOR THIS PURPOSE AT EACH LOCAL INCOME-TAX OFFICE (WHETHER ON NET-WORK OR NOT) OR AT DESIGNATED POSTAL OFFICES. ( VIII )IT HAS BEEN BROUGHT TO THE NOTICE OF THE BOARD THA T SOME TAXPAYERS HAVE FILED THE RETURNS IN THE OLD FORMS (OTHER THAN FORM NO.2D) EVEN AFTER TH E NOTIFICATION OF THE NEW FORMS. SINCE, OLD RETURN FORMS ARE INVALID RETURNS AFTER THE DATE OF NOTIFICATION OF NEW FORMS, THE TAXPAYERS SHOULD RESUBMIT THE RETURN IN NEW FORMS IN ACCORDAN CE WITH THE NEW PROCEDURE. 7. THE RETURNS FILED ELECTRONICALLY SHALL BE PROCESSE D ON PRIORITY BASIS. WE FIND THAT THE TRIBUNAL IN THE CASE OF B.D. LEASING & FINANCE LIMITED;ITA NO. 7355/MUM/2010, BY CONSIDERIN G THE SAID CBDT CIRCULAR, HELD THAT IF THE ASSESSEE HAS OBTAINED THE AUDIT REPORT BEFORE THE DUE DATE OF FILI NG OF THE RETURN BUT IT WAS NOT FILED WITH THE DEPARTMENT, AS TH E RETURN WAS ELECTRONICALLY FILED, THE PENALTY UNDER SEC TION 273B CANNOT BE LEVIED AS THE ASSESSEE HAS REASONABLE CAUSE FOR SUCH FAILURE. WE FIND THAT THE ASSESSEE HAS OBTAINED THE AUDIT REPORT BEFORE THE DUE DATE OF FILI NG OF THE RETURN. AS THE RETURN WAS FILED ELECTRONICALLY, THE AS SESSEE SUNIL KUMAR LOKWANI ITA 887/IND/2016 8 WAS NOT UNDER AN OBLIGATION TO SUBMIT THE AUDIT REPORT, WHICH CAN BE SUBMITTED DURING THE COURSE ASSESSMENT PROCEEDINGS. THE ASSESSEE IS SUPPORTED BY THE AFORESAI D CIRCULAR. IN ANY CASE THE DEFAULT OF THE ASSESSEE IS O NLY A TECHNICAL DEFAULT AND THE ASSESSEE IS SAVED BY THE PROVISIONS OF SECTION 273B OF THE ACT AS RELIANCE ON THE AFORESAID CIRCULAR CAN BE CONSIDERED TO BE REASONABLE CAUSE FOR SUCH FAILURE. THEREFORE, WE DELETE THE PENAL TY. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . THE ORDER HAS BEEN PRONOUNCED IN OPEN COURT ON 7 NOVEMBER, 2016. SD SD ( ..!') (..) #$ (O.P.MEENA) (D.T.GARASIA) ACCOUNTANT MEMBER J UDICIAL MEMBER (') / DATED : 7 NOVEM BER, 2016. DN/ SUNIL KUMAR LOKWANI ITA 887/IND/2016 9