Rup Kumar Biswas, Hooghly v. ITO, Ward - 1(1), Hooghly, Hooghly

ITA 2074/KOL/2008 | 2006-2007
Pronouncement Date: 07-05-2010

Appeal Details

RSA Number 207423514 RSA 2008
Bench Kolkata
Appeal Number ITA 2074/KOL/2008
Duration Of Justice 1 year(s) 5 month(s) 17 day(s)
Appellant Rup Kumar Biswas, Hooghly
Respondent ITO, Ward - 1(1), Hooghly, Hooghly
Appeal Type Income Tax Appeal
Pronouncement Date 07-05-2010
Appeal Filed By Assessee
Bench Allotted A
Tribunal Order Date 07-05-2010
Date Of Final Hearing 21-04-2010
Next Hearing Date 21-04-2010
Assessment Year 2006-2007
Appeal Filed On 20-11-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH : KOLKATA [BEFORE HONBLE SRI D. K. TYAGI JM & HONBLE SRI B . C. MEENA AM] I.T.A. NO.2074/KOL/2008 ASSESSMENT YEAR: 2006-07 RUP KUMAR BISWAS -VS- INCOME-TAX OFFICER WD-1( 1) HOOGHLY (PA NO.AIEPB 0268 M) (APPELLANT) (RESPONDENT) APPELLANT BY : SRI SOMNATH GHOSH RESPONDENT BY : SRI P. C. NAYAK O R D E R PER D. K. TYAGI JM: THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER OF THE LD. CIT(A) KOLKATA DATED 11.11.2008 FOR ASSESSMENT YEA R 2006-07 ON THE SOLE GROUND OF UPHOLDING THE ORDER OF THE AO IMPOSING PENALTY U/S . 271B OF THE I. T. ACT. 2. BRIEF FACTS OF THE CASE ARE THAT THE AO IN THE A SSESSMENT ORDER OBSERVED THAT THE TOTAL TURNOVER DURING THE YEAR OF THE ASSESSEE WAS RS.77 38 074/- AND HENCE THE ASSESSEE WAS REQUIRED TO GET HIS ACCOUNTS AUDITED U/S. 44AB OF THE I. T. ACT AND FURNISH THE COPY OF THE REPORT WITHIN THE PRESCRIBED TIME. SINCE TH E ASSESSEE FAILED TO FILE THE AUDIT REPORT WITHIN THE PRESCRIBED TIME THE PENALTY PROCEEDINGS HAD BEEN INITIATED AND A PENALTY OF RS.38 600/- BEING HALF PERCENT OF THE TOTAL TURNOVE R HAD BEEN IMPOSED BY THE AO IN APPEAL THE LD. CIT(A) HELD THAT THE AO HAS RIGHTLY IMPOSED THE PENALTY U/S. 271B AND CONFIRMED THE SAME. AGGRIEVED BY THE SAID ORDER N OW THE ASSESSEE IS IN APPEAL BEFORE US. 3. AT THE TIME OF HEARING BEFORE US THE LD. COUNSE L FOR THE ASSESSEE WHILE REITERATING HIS SAME SUBMISSIONS AS SUBMITTED BEFOR E THE LOWER AUTHORITIES FURTHER SUBMITTED THAT THE IT IS AN UNDISPUTED FACT THAT TH E TOTAL SALES OF THE ASSESSEE EXCEEDED RS.40 00 000/- FOR THE FIRST TIME IN THE ASSESSMENT YEAR UNDER DISPUTE AND AS SUCH THE PROVISIONS OF SECTION 44AB OF THE I. T. ACT 1961 B ECAME APPLICABLE FOR THE FIRST TIME IN THE CASE OF THE ASSESSEE. THE ASSESSEE IS A PERSON OF NORMAL PRUDENCE AND OF AVERAGE INTELLIGENCE AND AS SUCH HE WAS UNAWARE OF HIS OBLI GATION OF GETTING HIS ACCOUNTS AUDITED 2 UNDER SECTION 44AB OF THE I. T. ACT. IN SUPPORT OF HIS SUBMISSIONS HE PLACED RELIANCE ON THE FOLLOWING DECISIONS : I) JCIT VS- DAINIK ASSAM (P) LTD. (2004) 3 SOT 542 II) MOTILAL PADAMPAT SUGAR MILL CO. LTD. VS. STATE OF UP & ORS. (1979) 118 ITR 326 (SC) III) MARTINDALE VS. FAULKNER (1846) 135 ER 1124 IV) MADAN LAL GUPTA VS- ITO (2004) 3 SOT 144 (DELH I) V) ITO VS. SMT. RAJKUMARI JAIN (2004) 3 SOT 145 (JP ) HE FURTHER CONTENDED THAT SINCE THE IMPOSITION OF P ENALTY IS A QUASI CRIMINAL PROCEEDINGS AND PENALTY WILL NOT ORDINARILY IMPOSED UNLESS THE PARTY EITHER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF A CONDUCT CONTUMACIOUS OR DISHONEST OR ACTED IN DISREGARD OF ITS OBLIGATION. IN THIS CASE THE ASSESSEE DID NOT HAVE ANY PREVIOUS EXPERIENCE OF FILING THE AUDIT REPORT ALONG WITH TH E RETURN. THEREFORE HE SUBMITTED THAT IT CANNOT BE SAID THAT THE ASSESEE HAS ACTED DELIBE RATELY IN DEFIANCE OF LAW. THEREFORE IT WAS A REASONABLE CAUSE FOR NOT COMPLYING WITH THE P ROVISIONS OF SECTION 44AB. HE LASTLY PRAYED BEFORE THE BENCH TO DELETE THE PENALT Y SO CONFIRMED BY THE LD. CIT(A). 4. ON THE OTHER HAND THE LD. DR RELIED ON THE ORDE RS OF THE LOWER AUTHORITIES. 5. AFTER HEARING THE RIVAL SUBMISSIONS CAREFULLY P ERUSING THE MATERIAL AVAILABLE ON RECORD AND THE CASE LAWS CITED BY THE LD. COUNSEL F OR THE ASSESSEE WE FIND THAT THIS WAS THE FIRST TIME WHERE THE ASSESSEES TURNOVER REACHE D BEYOND THE PRESCRIBED LIMIT OF RS.40 LACS AS PER SECTION 44AB OF THE I. T. ACT. SO TH ERE IS A REASONABLE CAUSE FOR THE ASSESSEE FOR NOT KNOWING THE MATTER WELL AND FOR TH E SAID DEFICIENCY IN KNOWLEDGE HE WAS PREVENTED FROM GETTING HIS ACCOUNTS AUDITED AND FILE THE SAME ALONG WITH THE RETURN. THEREFORE IT CANNOT BE SAID THAT THERE WAS ANY MAL A FIDE INTENTION OF THE ASSESSEE IN NOT GETTING HIS ACCOUNTS AUDITED AS PER PROVISIONS OF S ECTION 44AB OF THE ACT. THEREFORE THIS CONSTITUTE A REASONABLE CAUSE UNDER SECTION 27 3B OF THE I. T. ACT. WE ALSO FIND THAT THE DELHI C BENCH OF ITAT IN THE CASE OF MADAN LA L GUPTA VS. ITO REPORTED IN (2004) 3 SOT 144 HAS HELD AS UNDER : SECTION 273B READ WITH SECTION 44AB OF THE I. T. ACT 1961 PENALTY - NOT TO BE IMPOSED IN CERTAIN CASES ASSESSMENT YEAR 1998-99 WHETHER WHERE YEAR IN QUESTION WAS FIRST YEAR OF BUSINESS OF ASSESSEE AND QUANTUM OF TURNOVER WAS JUST ABOVE RS.40 LAKHS IT COULD NOT BE SAID THAT THERE WAS ANY MALA FIDE INTENTION OF ASSESSEE IN NOT GETTING HIS ACCOUNTS AUDITED AS HE WAS NOT AWARE O F PROVISION OF SECTION 44AB AND BONA FIDE BELIEF ON PART OF ASSESSEE CONSTITUTED A REASONABLE CAUSE UNDER SECTION 273B HELD YES. 3 IN THIS VIEW OF THE MATTER WE CANCEL THE PENALTY CONFIRMED BY THE LD. CIT(A). 6. IN THE RESULT THE APPEAL OF THE ASSESSEE IS AL LOWED. 7. THE ORDER IS PRONOUNCED IN THE OPEN COURT ON 7.5 .2010 SD/- SD/- (B. C. MEENA) (D. K. TYAGI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 7 TH MAY 2010 COPY TO : 1. SHRI RUP KUMAR BISWAS C/O SHRI SOMNATH GHOSH ADV OCATE SEVEN BROTHERS LODGE BUROSHIBTALA P. S. CHINSURAH DIST HOOGHL Y PIN 712 105 2. ITO WARD-1(1) HOOGHLY 3. CIT(A) KOLKATA. 4. CIT KOLKATA. 5. D.R. ITAT KOLKATA. TRUE COPY BY ORDER DEPUTY REGISTRAR JD.(SR.P.S.) I.T.AT. KOLKATA