SAHAB SINGH,KURUKSHETRA, HARYANA V. INCOME TAX OFFICER, WARD 1, KURUKSHETRA., INCOME TAX OFFICER, WARD ONE, KURUKSHETRA, HARYANA.

ITA 169/CHANDI/2024

AI Insights

The case involves Shri Sahab Singh, the appellant, who contested a penalty imposed by the Assessing Officer for not getting his accounts audited and not filing a return of income, as required under Section 44AB of the Income Tax Act, due to his gross receipts exceeding the prescribed limit. The appellant argued that the funds in question were not his turnover but belonged to 'Mother Dairy', for whom he acted as a collection agent. The CIT(A) had set aside the initial assessment for a fresh adjudication, which led to the Tribunal's decision to also set aside the penalty, pending the outcome of the new assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 298530 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2017-2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANIL SHARMA
• Assessee Lawyers: B.M. MONGA
• Keywords: Set aside
• Section: 144; 44AB; 271B

Judgement Text

"आयकर अपील य अ धकरण,च\u0010डीगढ़ \u0014यायपीठ, च\u0010डीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, “SMC” CHANDIGARH BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER आयकर अपील सं./ITA No.169/CHD/2024 नधा\u000fरण वष\u000f / Assessment Year : 2017-18 Shri Sahab Singh, House No. 2488/6,Jyotinagar, Near Seth Tek Chand School, Kurukshetra. Vs The ITO, Ward – 1, Kurukshetra. \u0013थायीलेखासं./PAN NO: EAZPS8496H अपीलाथ\u0017/Appellant \u0019\u001aयथ\u0017/Respondent नधा\u000f\u001bरती क ओर से/Assessee by: Shri B.M.Monga and Shri Rohit Kaura, Advocates राज\u0013व क ओर से/ Revenue by : Shri Anil Sharma, JCIT, Sr.DR सुनवाई क तार\"ख/Date of Hearing : 16.04.2025 उदघोषणा क तार\"ख/Date of Pronouncement : 17.04.2025 PHYSICAL HEARING आदेश/Order The present appeal has been filed by the assessee against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi, [in short referred to as CIT(A)] dated 21.12.2023 relating to A.Y. 2017-18. 2. The assessee in this appeal has agitated the confirmation of the penalty levied by the Assessing Officer (in short ‘the AO’)under Section 271B of the Income Tax Act. ITA No. 169/Chd-2024 A.Y. 2017-18 2 3. The Assessing Officer levied the impugned penalty observing that the gross receipts of the assessee from the sale of packed milk and milk products were more than the limit prescribed under Section 44AB of the Income Tax Act and the assessee was supposed to get his accounts audited and was required to furnish the Audit Report as per provisions of Section 44AB of the Income Tax Act. Since the assessee had neither filed any return of income nor got his accounts audited, therefore the AO levied the impugned penalty under Section 271B of the Income Tax Act, which has been further confirmed by the CIT(A). 4. I have heard the rival contentions and gone through the record. At the outset, the ld. Counsel for the assessee has invited my attention to the order of the CIT(A) dated 17.02.2025 passed in the appeal against quantum additions made by the AO vide assessment order dated 28.12.2019 passed under Section 144 of the Income Tax Act. 5. The assessee in its appeal before the CIT(A) had pleaded that the amount deposited in its bank account was not out of the turnover of the assessee, rather the said amount deposited did not belong to the assessee but to ‘Mother ITA No. 169/Chd-2024 A.Y. 2017-18 3 Dairy’ and that the assessee was the custodian of that money. That the assessee had worked just as a collection agency on behalf of ‘Mother Dairy’ and earned commission income therefrom. The ld.CIT(A) considering the above submissions of the assessee, has set aside the assessment order passed under Section 144 dated 28.12.2019 for fresh adjudication. 6. Since the matter relating to the quantum additions made by the AO has already been set aside for fresh adjudication by the CIT(A) considering the plea of the assessee that the amount deposited in its bank account was not out of the sale proceeds/turnover of the assessee and rather the said amount belonged to the ‘Mother Dairy’ and that the assessee was just a Collection Agency on behalf of the Mother Dairy, therefore, the impugned penalty levied under Section 271B of the Income Tax Act is also liable to be set aside as the same has been levied on the same footing by treating the amount deposited in the bank account as turnover of the assessee. The impugned order of the CIT(A) is, therefore, set aside and the matter is also restored to the file of the AO with the direction to decide the same after the ITA No. 169/Chd-2024 A.Y. 2017-18 4 fresh assessment passed by the AO, as directed by the CIT(A) vide his order dated 17.02.2025. 7. The appeal of the assessee is treated as allowed for statistical purposes. Order pronounced on 17th April, 2025. Sd/- ( SANJAY GARG) \u0014या\u001bयक सद य/ Judicial Member “Poonam.” आदेश क \u0019 त)ल*प अ+े*षत/ Copy of the order forwarded to : 1. अपीलाथ\u0017/ The Appellant 2. \u0019\u001aयथ\u0017/ The Respondent 3. आयकर आयु,त/ CIT 4. आयकर आयु,त (अपील)/ The CIT(A) 5. *वभागीय \u0019 त न/ध, आयकर अपील\"य आ/धकरण, च1डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड\u000fफाईल/ Guard File आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar "