Dr.Mukesh Bansal, Ahmedabad V. The ACIT.,Cent,Circle-2(3), Ahmedabad

ITSSA 401/AHD/2012

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 3074 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 month(s) 14 day(s)
• Appeal Type: Income Tax (Search & Seizure) Appeal
• Pronouncement Date: 31-10-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2004-2005
• Appeal Filed On: 17-08-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D P GUPTA
• Assessee Lawyers: M K PATEL
• Keywords: Search and seizure; Charitable institution; Reasonable cause
• Section: 143(3); 142(1); 153A; 27

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, D BENCH, AHMEDABAD BEFORE SHRI G. C. GUPTA, HONBLEVICE PRESIDENT AND SHRI A. K. GARODIA, ACCOUNTANT MEMBER I.T.A. NO. 400-404/ AHD/2012 (ASSESSMENT YEAR 2003-04 TO 2007-08) DR. MUKESH BANSAL, 23, HATKESH SOCIETY, DARPAN 5 ROADS, NAVRANGPURA, AHMEDABAD 380009 VS. ACIT, CENTRAL CIRCLE 2(3), AHMEDABAD PAN/GIR NO. : AAXPB5858N (APPELLANT) .. (RESPONDENT) APPELLANT BY: SHRI M K PATEL, AR RESPONDENT BY: SHRI D P GUPTA, CIT DR DATE OF HEARING: 12.10.2012 DATE OF PRONOUNCEMENT: 31.10.2012 O R D E R PER SHRI A. K. GARODIA, AM:- ALL THESE APPEALS ARE FILED BY THE ASSESSEE WHICH ARE DIRECTED AGAINST COMBINED ORDER OF LD. CIT(A) III, AHMEDABAD DATED 24.07.2012 FOR THE ASSESSMENT YEARS 2003-04 TO 2007-08. 2. SINCE ONLY ONE IDENTICAL ISSUE IS INVOLVED IN AL L THE 5 YEARS, ALL THESE APPEALS WERE HEARD TOGETHER AND ARE BEING DIS POSED OFF BY WAY OF THIS COMMON ORDER. 3. THE ONLY GRIEVANCE OF THE ASSESSEE IN ALL THE 5 YEARS IS REGARDING PENALTY CONFIRMED BY LD. CIT(A) WHICH WAS IMPOSED B Y THE A.O. U/S 271A OF RS.25,000/- IN EACH YEAR. I.T.A.NO.400-404 /AHD/2012 2 4. THE BRIEF FACTS OF THE CASE TILL THE STATE OF IM POSITION OF PENALTY ARE NOTED BY LD . CIT(A) IN PARA 2 OF HIS ORDER WHICH I S REPRODUCED BELOW: 2. THE BRIEF FACTS OF THE CASE ARE THAT IN PURSUAN T TO SEARCH AND SEIZURE ACTION, THE ASSESSMENT U/S. 153A WAS COMPLE TED IN THESE CASES ON 31/12/2010. DURING THE COURSE OF ASSESSMEN T PROCEEDINGS IT WAS NOTICED BY THE AO THAT THE APPELLANT WAS NOT MAINTAINING ANY BOOKS OF ACCOUNTS AS PRESCRIBED U/S. 44AA OF TH E I.T. ACT. HE ACCORDINGLY INITIATED, PENALTY PROCEEDINGS U/S. 271 A OF THE I.T. /VET FOR NON-MAINTENANCE OF BOOKS OF ACCOUNTS. IN RESPONSE TO THE SHOW CAUSE NOTICE THE APPELLANT STATED BEFORE THE A .O. AS UNDER: THE ASSESSEE'S MAIN SOURCE OF INCOME IS FROM SALAR Y FROM BRIJ BASANT HOSPITAL (P) LTD. IN CASE OF BRIJ BASAN T (P) LTD COMPLETE BOOKS OF ACCOUNTS AS PRESCRIBED U/S. 44A A HAS BEEN MAINTAINED. EVEN THE ACCOUNTS ARE AUDITED IN T HAT CASE. IN CASE OF ASSESSEE IN QUESTION MEAGER INCOME FROM PROFESSION IS DERIVED. IN THE CIRCUMSTANCE THERE IS NO DEFAULT ON THE PART OF THE ASSESSEE AND HENCE IT IS REQUEST ED 'THAT THE PENALTY PROCEEDING MAY KINDLY BE DROPPED.' BEFORE THE AO IT WAS CONTENDED BY THE APPELLANT VID E HIS LETTER DATED 21/11/2010 THAT THE APPELLANT IS NOT MAINTAIN ING ANY BOOKS OF ACCOUNTS AND THEREFORE THE DETAILS CALLED FOR BY TH E AO U/S. 142(1) OF THE I.T. ACT CANNOT BE FURNISHED. THE AO THEREFO RE LEVIED PENALTY OF RS.25,000/- EACH U/S. 271(1 )(C) FOR ALL THE ASSESSMENT YEARS. AGAINST THE LEVY OF PENALTY THE APPELLANT HA S FILED THE PRESENT APPEAL. SINCE THE ISSUE IS COMMON IN ALL TH E APPEALS, FOR THE SAKE OF CONVENIENCE ALL THE APPEALS ARE DISPOSED OF F BY COMMON ORDER. 5. BEING AGGRIEVED, THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE LD. CIT(A) BUT WITHOUT SUCCESS AND NOW, THE ASSESSE E IS IN FURTHER APPEAL BEFORE US. 6. LD. A.R. SUBMITTED THAT THIS ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE JUDGEMENT OF HONBLE GUJARAT HIGH C OURT RENDERED IN THE CASE OF CIT VS TEA KING AS REPORTED IN 123 TAXMAN 1 62 (GUJ.). HE ALSO SUBMITTED THAT OTHERWISE ALSO, PENALTY SHOULD NOT B E IMPOSED IN ALL THE I.T.A.NO.400-404 /AHD/2012 3 YEARS BECAUSE IT IS A CONTINUOUS DEFAULT AND HENCE, IF DEFAULT COULD HAVE BEEN POINTED OUT BY THE A.O. IN THE 1 ST YEAR ITSELF, THE SAME COULD NOT HAVE BEEN REPEATED IN THE SUBSEQUENT YEARS AND, THEREFOR E, THE PENALTY SHOULD BE DELETED AT LEAST IN THE SUBSEQUENT FOUR YEARS EV EN IF IT IS CONFIRMED IN THE 1 ST YEAR I.E. ASSESSMENT YEAR 2003-04. LD. D.R. SUPPO RTED THE ORDERS OF AUTHORITIES BELOW. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS, PERUSE D THE MATERIAL ON RECORD AND HAVE GONE THROUGH THE ORDERS OF AUTHORIT IES BELOW AND THE JUDGEMENT CITED BY THE LD. A.R. OF THE ASSESSEE. W E FIND THAT IT IS NOTED BY THE A.O. IN PARA 3 OF THE ASSESSMENTS ORDER FOR THE ASSESSMENT YEAR 2003-04 THAT THE ASSESSEE IS A DOCTOR BY PROFESSION AND RECEIVES SALARY FROM BRIJ BASANT HOSPITAL PVT. LTD. AND ALSO HAVING INCOME FROM BUSINESS AND PROFESSION APART FORM INCOME FROM OTHER SOURCES . THEREAFTER, HE HAS NOTED THAT THE ASSESSEE IS A MEDICAL PRACTITIONER B UT SHE IS NOT MAINTAINING BOOKS OF ACCOUNTS AS REQUIRED U/S 44AA OF THE INCOM E TAX ACT, 1961. FOR THIS VIOLATION OF SECTION 44AA, PENALTY WAS IMPOSED U/S 271A OF THE ACT. WE FIND THAT LD. CIT(A) HAS CONFIRMED THE PENALTY B Y FOLLOWING THE JUDGEMENT OF HONBLE GUJARAT HIGH COURT RENDERED IN THE CASE OF GODIJI PARSWANATHJI JAIN DERASAR VS CIT AS REPORTED IN 226 ITR 798(GUJ.). HE ALSO NOTED THAT THIS JUDGEMENT OF HONBLE GUJARAT H IGH COURT IS IN CONNECTION WITH THE PENALTY IMPOSED BY THE A.O. U/S 271(I)(A) OF THE INCOME TAX ACT, 1961 FOR LATE FILING OF RETURN BY A PUBLIC CHARITABLE TRUST BUT THE RATIO OF THIS JUDGEMENT IS APPLICABLE IN TH E PRESENT CASE ALSO. WE ARE OF THE CONSIDERED OPINION THAT PENALTY IN THE 1 ST YEAR I.E. Y 2003-04 HAS TO BE UPHELD BECAUSE FOR THIS YEAR, THE ASSESSEE CO ULD NOT SHOW ANY REASONABLE CAUSE FOR NOT MAINTAINING BOOKS OF ACCOU NTS AS REQUIRED U/S I.T.A.NO.400-404 /AHD/2012 4 44AA OF THE INCOME TAX ACT, 1961. THE JUDGEMENT C ITED BY THE LD. A.R. RENDERED IN THE CASE OF CIT VS TEA KING (SUPRA) IS OF NO HELP IN THE PRESENT CASE BECAUSE THE FACTS ARE DIFFERENT. IN T HAT CASE, PENALTY IN DISPUTE WAS IMPOSED BY THE A.O. U/S 271B READ WITH SECTION 44AB OF THE INCOME TAX ACT, 1961 AND THE PENALTY WAS DELETED IN THAT CASE ON THIS BASIS THAT WHEN THE PENALTY IS CONFIRMED FOR THE AS SESSMENT YEAR 1985-86, THE PENALTY CANNOT BE CONFIRMED FOR THE SUBSEQUENT YEARS BECAUSE WITHOUT THE OPENING BALANCE, BOOKS CANNOT BE MAINTAINED AND AUDITED IN THE SUBSEQUENT YEARS. IN THE PRESENT CASE, THE PENALTY IN DISPUTE IS REGARDING NON MAINTENANCE OF BOOKS OF ACCOUNTS AS PER THE REQ UIREMENT U/S 44AA OF THE IT ACT AND HENCE, IT CANNOT BE SAID THAT BOO KS CANNOT BE MAINTAINED IN THIS YEAR AND IT IS A REASONABLE CAUS E FOR NON MAINTAINING THE BOOKS OF ACCOUNTS. WE, THEREFORE, CONFIRM THE PENALTY FOR THE 1 ST YEAR I.E. ASSESSMENT YEAR 2003-04. 8. REGARDING THE REMAINING YEARS I.E. ASSESSMENT YE AR 2004-05 TO 2007-08, WE ARE OF THE CONSIDERED OPINION THAT SINC E PENALTY IS IMPOSED IN THE 1 ST YEAR, FOR THE CONTINUOUS DEFAULT IN THE SUBSEQUENT YEARS, PENALTY SHOULD NOT BE IMPOSED AND IT SHOULD BE ACCEPTED AS REASONABLE CAUSE IN THE SUBSEQUENT YEAS FOR NON MAINTAINING OF BOOKS BE CAUSE FOR NON MAINTENANCE OF BOOKS OF ACCOUNTS FOR THE 1 ST YEAR I.E. ASSESSMENT YEAR 2003-04, THE A.O. INITIATED THE PENALTY PROCEEDING S ON 31.12.2010 THAT TOO AFTER THE SEARCH CONDUCTED IN THE CASE OF THE A SSESSEE AND ASSESSMENT U/S 153A READ WITH SECTION 143(3) OF THE ACT WAS CO MPLETED IN ALL THESE 5 YEARS ON 31.12.2010. IF THE A.O. WOULD HAVE INITIA TED PENALTY PROCEEDINGS FOR ASSESSMENT YEAR 2003-04 ITSELF, THE DEFAULT COULD NOT HAVE BEEN CONTINUED IN THE SUCCEEDING YEARS. WE HAVE TO DECIDE THIS ISSUE IN I.T.A.NO.400-404 /AHD/2012 5 THE PRESENT CASE AFTER CONSIDERING COMPLETE FACTS OF THIS CASE. IT IS NOTED IN THE PRESENT CASE THAT THE ASSESSEE WAS HAVING IN COME FORM SALARY FORM BRIJ BASANT HOSPITAL PVT. LTD. APART FROM THIS SAL ARY INCOME, THE ASSESSEE WAS HAVING VERY SMALL PROFESSIONAL INCOME AND HENCE, THERE IS FORCE IN THE CONTENTION OF THE LD. A.R. THAT THE AS SESSEE WAS NOT AWARE ABOUT THE REQUIREMENT OF SECTION 44AA OF THE INCOME TAX ACT, 1961 AND HENCE, IF IT WOULD HAVE BEEN POINTED OUT BY THE A.O . IN THE VERY FIRST YEAR, THE ASSESSEE WOULD HAVE MAINTAINED THE ACCOUNTS IN THE SUBSEQUENT YEARS AND HENCE THIS PENALTY IN SUBSEQUENT YEARS IS NOT J USTIFIED ALTHOUGH IT IS CONFIRMED IN THE 1 ST YEAR. IN OUR CONSIDERED OPINION, THIS CONSTITUTES REASONABLE CAUSE AS PER THE PROVISION OF SECTION 27 3B OF THE INCOME TAX ACT, 1961 BECAUSE THE ASSESSEE IN THE PRESENT CASE IS HAVING INCOME OTHER THAN FROM SALARY, VERY SMALL PROFESSIONAL INCOME AN D, THEREFORE, IT HAS TO BE ACCEPTED THAT THE ASSESSEE WAS MEDICAL PRACTITIO NER AND WAS NOT HAVING ANY ASSISTANCE FROM ANY PROFESSIONAL. UNDER THESE FACTS, IT IS VERY MUCH POSSIBLE THAT THE ASSESSEE WAS NOT AWARE ABOUT THE REQUIREMENTS OF SECTION 44AA OF THE INCOME TAX ACT, 1961 AND HE DI D NOT MAINTAIN THE BOOKS OF ACCOUNTS AND THEREFORE, IF THIS FAILURE OF THE ASSESSEE COULD HAVE BEEN POINTED OUT TO THE ASSESSEE AFTER EXPIRY OF FI RST YEAR ITSELF, THE ASSESSEE WOULD HAVE MAINTAINED THE REQUIRED BOOKS O F ACCOUNTS IN THE SUBSEQUENT YEARS AND HENCE, IN THE SUBSEQUENT YEARS , IT HAS TO BE ACCEPTED THAT THERE WAS REASONABLE CAUSE FOR NON MAINTENANCE OF THE BOOKS OF ACCOUNTS IN THE FACTS OF THE PRESENT CASE AND HENCE , WE HOLD THAT PENALTY IN THE SUBSEQUENT YEAS I.E. ASSESSMENT YEARS 2004-0 5 TO 2007-08 IS NOT JUSTIFIED AND THE SAME IS DELETED. I.T.A.NO.400-404 /AHD/2012 6 9. IN HE RESULT, APPEAL OF THE ASSESSEE IN ASSESSME NT YEAR 2003-04 IS DISMISSED WHEREAS, THE APPEALS IN THE REMAINING 4 Y EARS I.E. FOR ASSESSMENT YEARS 2004-05 TO 2007-08 ARE ALLOWED. 10. ORDER PRONOUNCED IN THE OPEN COURT ON THE DATE MENTIONED HEREINABOVE. SD./- SD./- (G. C. GUPTA) (A. K. GARODIA) JUDICIAL MEMBER ACCOUNTANT MEMBER SP COPY OF THE ORDER FORWARDED TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE LD. CIT (APPEALS) 5. THE DR, AHMEDABAD BY ORDER 6. THE GUARD FILE AR,ITAT,AHMEDABAD 1. DATE OF DICTATION 15/10/2012 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 17/10/2012.OTHER MEMBER 3. DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P .S./P.S. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 31/10/2012 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. P.S./P.S.31/10 6. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 31/10/2012 7. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK .. 8. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER . 9. DATE OF DESPATCH OF THE ORDER. .