Unique Ways Management Service Pvt. Ltd., Bhopal V. ACIT-4(1), Bhopal

ITA 900/Ind/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 2558 (ITAT-INDORE)
• Duration Of Justice: 1 year(s) 3 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 13-03-2020
• Assessment Year: 2006-2007
• Appeal Filed On: 26-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: K G GOYAL
• Keywords: Earning of tax free income; Set aside
• Section: 271(1)(c); 143(3); 14A; 147; 148; 2

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, INDORE BENCH, INDORE BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER ITA NO.900/IND/2018 ASSESSMENT YEAR: 2006-07 APPELLANT BY NONE REVENUE BY SHRI K.G. GOYAL, SR.DR DATE OF HEARING 13.03 .2020 DATE OF PRONOUNCEMENT 18 .0 3 .2020 O R D E R PER MANISH BORAD, AM. THE ABOVE CAPTIONED APPEAL FILED AT THE INSTANCE OF ASSESSEE PERTAINING TO ASSESSMENT YEAR 2006-07 IS DIRECTED A GAINST THE ORDERS OF LD. COMMISSIONER OF INCOME TAX (APPEALS)- 1 (IN SHORT LD.CIT(A)], BHOPAL DATED 07.09.2018 WHICH IS ARIS ING OUT OF THE M/S.UNIQUE WAYS MANAGEMENT SERVICE PRIVATE LIMITED, 103-104, BHOPAL PLAZA, HAMIDIA ROAD, BHOPAL VS. ACIT - 4(1) BHOPAL (APPELLANT) (REVENUE ) PAN NO. A AACU4719K ITANO.900/IND/2018 UNIQUE WAYS MANAGEMENT SERVICE PRIVATE LIMIATED 2 ORDER U/S 271(1)(C) OF THE INCOME TAX ACT 1961(IN S HORT THE ACT) DATED 21.03.2016 FRAMED BY ACIT-4(1), BHOPAL. 2. ASSESSEE HAS RAISED FOLLOWING GROUNDS OF APPEAL; THAT LD. CIT(A) ERRED IN CONFIRMING PENALTY OF RS. 103870/- U/S 271(1)(C ) OF THE ACT. 3. WHEN THE CASE WAS CALLED NO ONE ON BEHALF OF THE ASSESSEE ATTENDED THE HEARING. IT WAS DECIDED TO HEAR THE A PPEAL WITH THE ASSISTANCE OF LD. DR AND AVAILABLE RECORDS. ON PER USAL OF THE ORDER OF LD. CIT(A) WE FIND THAT THE ASSESSEE DID NOT APP EAR BEFORE HIM ALSO. DURING THE COURSE OF PENALTY PROCEEDINGS ASS ESSEE DID NOT APPEAR. THE SOLE GRIEVANCE OF THE ASSESSEE IS LEVY OF PENALTY U/S 271(1)(C) OF THE ACT AT RS. 1,03,870/- 4. LD. DEPARTMENTAL REPRESENTATIVE VEHEMENTLY ARGUE D SUPPORTING ORDERS OF BOTH THE LOWER AUTHORITIES. 5. WE HAVE HEARD LD. DR AND PERUSED THE RECORDS PLA CED BEFORE US. WE OBSERVE THAT THE ASSESSEE FILED INCOME TAX RETURN ON 13.11.2006 FOR ASSESSMENT YEAR 2006-07 DECLARING TO TAL INCOME OF RS.3,89,297/- AND ALSO CLAIMED EXEMPT INCOME OF RS. 71,33,689/- . CASE SELECTED FOR SCRUTINY AND ASSESSMENT COMPLETED U/S 143(3) OF ITANO.900/IND/2018 UNIQUE WAYS MANAGEMENT SERVICE PRIVATE LIMIATED 3 THE ACT ON 28.11.2008 ACCEPTING THE RETURNED INCOME . IT SHOWS THAT COMPLETE DETAILS WERE EXAMINED IN THE FIRST ROUND O F ASSESSMENT PROCEEDINGS AND THERE WAS NO OBSERVATION AGAINST TH E ASSESSEE THAT THE ASSESSEE HAS CONCEALED PARTICULARS OF INCOME OR FURNISHED INACCURATE PARTICULARS OF INCOME. SUBSEQUENTLY NOT ICE U/S 148 OF THE ACT WAS ISSUED AND THE ASSESSMENT U/S 147 OF TH E ACT WAS COMPLETED ON 19.3.2012 ASSESSING TOTAL INCOME AT RS ,6,94,894/-. THE NET DISALLOWANCE WAS RS. 3,05,597/- WHICH TOO W AS ON ACCOUNT OF ESTIMATED EXPENSES NOT DISALLOWED BY THE ASSESS EE FOR EARNING THE EXEMPT INCOME AT RS.71,33,689/-. THE LD. A.O M ADE PROPORTIONATE DISALLOWANCE OF RS.3,05,597/- U/S 14A IN RESPECT OF FINANCE CHARGE DEBITED IN THE PROFIT & LOSS ACCOUNT . ON THIS DISALLOWANCE U/S 14A OF THE ACT PENALTY PROCEEDINGS WERE INITIATED WHICH FINALLY REACHED TO THE LEVEL OF LEVY OF PENAL TY AT RS.1,03,807/- 6. ASSESSEE HAS SHOWN ALL THE EXPENSES IN THE PROFI T & LOSS ACCOUNT AND THERE IS NO DISPUTE ABOUT THE PARTICULA RS PROVIDED IN THE BOOKS OF ACCOUNTS NOR THE LD. A.O HAS REJECTED THE BOOK RESULTS SINCE NO SUCH FINDING IS APPEARING IN THE PENALTY O RDER AS WELL AS APPELLATE ORDER. THERE IS NO MANDATORY RULE THAT F OR EARNING ITANO.900/IND/2018 UNIQUE WAYS MANAGEMENT SERVICE PRIVATE LIMIATED 4 EXEMPT INCOME ASSESSEE HAS TO INCUR ANY EXPENDITURE . IT IS ONLY WHEN THE LD. A.O IS SATISFIED ABOUT THE TYPE AND AM OUNT OF EXPENSES WHICH HAVE BEEN INCURRED SPECIFICALLY FOR EARNING THE EXEMPT INCOME AND HAS BEEN DEBITED TO PROFIT & LOSS ACCOUNT FOR CLAIMING EXPENSE AGAINST THE REVENUE LIABLE TO BE T AXED. IN THE INSTANT CASE THE DISALLOWANCE U/S 14A IS ON ESTIMAT ED BASIS MADE PROPORTIONATELY OUT OF THE FINANCE CHARGES. THERE IS NO CASE OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME SINCE THE AMOUNT HAS BEEN DUL Y DEBITED AS EXPENSES IN PROFIT & LOSS ACCOUNT. SINCE NO BONAFID E INTENTION OR MENSURA ON THE PART OF THE ASSESSEE IS APPEARING ON THE FA CE OF THE RECORD PLACED BEFORE US, WE ARE OF THE CONSIDERED V IEW THAT LD. A.O WAS NOT JUSTIFIED IN LEVYING THE PENALTY U/S 271(1) (C) OF THE ACT AT RS.1,03,870/-. THEREFORE IN THE GIVEN FACTS AND CI RCUMSTANCES OF THE CASE WE SET ASIDE THE FINDING OF LD. CIT(A) AND DELETE THE PENALTY OF RS.1,03,870/- LEVIED U/S 271(1)(C) OF THE ACT. ITANO.900/IND/2018 UNIQUE WAYS MANAGEMENT SERVICE PRIVATE LIMIATED 5 7. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 18.03.20 20. SD/- SD/- ( KUL BHARAT) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER / DATED : 18 MARCH, 2020 /DEV COPY TO: THE APPELLANT/RESPONDENT/CIT CONCERNED/CIT (A) CONCERNED/ DR, ITAT, INDORE/GUARD FILE. BY ORDER, ASSTT.REGISTRAR, I.T.A.T., INDORE