The ITO, Ward-3(2), JAMNAGAR V. M/s Matang & Co., JAMNAGAR

ITA 887/RJT/2010

• Counselvise Citation: 88724914 RSA 2010
• Duration Of Justice: 1 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: DB
• Next Hearing Date: 09-08-2011
• Assessment Year: 2001-2002
• Appeal Filed On: 28-04-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: MJ RANPURA
• Section: 40A(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI A.L. GEHLOT (AM) AND SHRI N.R.S. GANESA N (JM) I.T.A. NO.887/RJT/2010 (ASSESSMENT YEAR 2001-02) ITO, WD 3(2) VS M/S MATYANG & CO JAMNAGAR MATANG KRUPA MOTA ASHAPURA KHADKI JAMNAGAR PAN : AADFM4873E (APPELLANT) (RESPONDENT) DATE OF HEARING : 09-08-2011 DATE OF PRONOUNCEMENT : 12-08-2011 APPELLANT BY : SHRI MK SINGH RESPONDENT BY: SHRI MJ RANPURA O R D E R PER N.R.S. GANESAN, JM THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST THE ORDER OF CIT(A), JAMNAGAR DATED 03-02-2010 DELETING THE PENALTY LEVI ED U/S 271(1)(C) OF THE ACT FOR THE ASSESSMENT YEAR 2001-02. 2. SHRI MK SINGH, THE LD.DR SUBMITTED THAT THE CIT( A) IN THE COURSE OF APPELLATE PROCEEDINGS IN THE QUANTUM APPEAL ENHANCE D THE INCOME OF THE ASSESSEE BY DISALLOWING THE PAYMENT MADE IN CASH EX CEEDING RS.20,000. IN THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS INCURRED EXPENSES IN CASH EXCEEDING RS.20,000. ACC ORDINGLY THE ASSESSING OFFICER DISALLOWED 20% OF THE SAME U/S 40A(3) OF TH E ACT. SINCE THE ASSESSEE HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME BY NOT DISALLOWING THE PAYMENT MADE IN CASH EXCEEDING RS.20,000 THE ASSESSING OFFI CER LEVIED PENALTY. HOWEVER, THE CIT(A) FOUND THAT THIS IS NOT A FIT CA SE FOR LEVY OF PENALTY. ACCORDING TO THE LD.DR WHEN THE ASSESSEE HAS FURNIS HED INACCURATE PARTICULARS ITA NO.887/RJT/2010 2 BY NOT DISALLOWING 20% OF THE AMOUNT PAID IN CASH E XCEEDING RS.20,000 WHICH AMOUNTS TO CONCEALMENT OF INCOME, PENALTY HAS TO BE LEVIED U/S 271(1)(C) OF THE ACT. 3. ON THE CONTRARY, SHRI MJ RANPURA, THE LD.REPRESE NTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS NOT FURNISHED ANY I NACCURATE PARTICULARS OR HAS CONCEALED ANY PART OF THE INCOME. THE ASSESSEE HAS FILED ALL THE DETAILS INCLUDING THE PAYMENTS MADE IN CASH. THE ASSESSING OFFICER WHILE MAKING ASSESSMENT DISALLOWED 20% OF THE PAYMENTS MADE IN C ASH. NO PARTICULARS WERE SUPPRESSED. ACCORDING TO THE LD.REPRESENTATIVE, TH E ASSESSEE HAS FURNISHED ALL THE MATERIAL BEFORE THE ASSESSING OFFICER. THEREFO RE, IT DOES NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OR CONCEALING ANY PART OF THE INCOME. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND HAVE ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE ASSE SSING OFFICER IS EMPOWERED TO LEVY PENALTY U/S 271(1)(C) IN CASE THE ASSESSEE CON CEALED THE PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. IN THIS CASE, THE ASSESSEE FURNISHED ALL THE DETAILS INCLUDING THE PA YMENTS / EXPENSES INCURRED IN CASH EXCEEDING RS.20,000. THE ASSESSING OFFICER DU RING THE COURSE OF SCRUTINY OF THE ACCOUNTS FOUND THAT THE PAYMENTS WERE MADE I N CASH EXCEEDING RS.20,000. THEREFORE, BY APPLYING THE STATUTORY PR OVISION U/S 40A(3) HE DISALLOWED 20% OF THE SAME. ON APPEAL BY THE ASSES SEE BEFORE CIT(A), THE CIT(A) ENHANCED THE DISALLOWANCE. HOWEVER, THE ASS ESSING OFFICER LEVIED PENALTY ON THE AMOUNT DISALLOWED BY HIM DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE QUESTION ARISES FOR CONSIDERATION IS WHEN THE ASSESSEE HAS FURNISHED ALL THE DETAILS INCLUDING THE EXPENSES IN CURRED IN CASH WHICH EXCEEDS RS.20,000 CAN WE SAY THAT THERE WAS CONCEALMENT OF ANY PARTICULARS OF INCOME OR HAS THE ASSESSEE FURNISHED INACCURATE PARTICULAR S OF INCOME? THIS ISSUE WAS EXAMINED BY THE APEX COURT IN THE CASE OF CIT VS RE LIANCE PETROPRODUCTS (2010) 322 ITR 158 (SC). THE APEX COURT FOUND THAT WHEN T HE ASSESSEE HAS FURNISHED ALL THE PARTICULARS BEFORE THE ASSESSING OFFICER AN D THE ASSESSING OFFICER HAS ITA NO.887/RJT/2010 3 DISALLOWED THE CLAIM OF THE ASSESSEE BY APPLYING TH E STATUTORY PROVISION IT WILL NOT AMOUNT TO FURNISHING OF INACCURATE PARTICULARS OF I NCOME OR CONCEALING THE PARTICULARS OF INCOME. IN VIEW OF THE SAID JUDGMEN T OF THE APEX COURT IN THE CASE OF CIT VS RELIANCE PETROPRODUCTS (SUPRA), IN OUR OP INION, THE CIT(A) HAS RIGHTLY DELETED THE PENALTY. WE CONFIRM HIS ORDER. 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12-08-2011. SD/- SD/- (A.L. GEHLOT) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT, DT : 12 TH AUGUST, 2011 PK/- COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A), JAMNAGAR 4. THE CIT, JAMNAGAR 5. THE DR, I.T.A.T., RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT