Smt. Mita J.Parekh, Ahmedabad v. The Income tax Officer,Ward-6(3),, Ahmedabad

ITA 2190/AHD/2010 | 2006-2007
Pronouncement Date: 24-08-2010 | Result: Allowed

Appeal Details

RSA Number 219020514 RSA 2010
Assessee PAN AFQPS0429G
Bench Ahmedabad
Appeal Number ITA 2190/AHD/2010
Duration Of Justice 1 month(s) 26 day(s)
Appellant Smt. Mita J.Parekh, Ahmedabad
Respondent The Income tax Officer,Ward-6(3),, Ahmedabad
Appeal Type Income Tax Appeal
Pronouncement Date 24-08-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 24-08-2010
Date Of Final Hearing 24-08-2010
Next Hearing Date 24-08-2010
Assessment Year 2006-2007
Appeal Filed On 28-06-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL : SMC BENCH : AHMEDABA D (BEFORE HON'BLE SHRI T.K. SHARMA JUDICIAL MEMBER ) I.T.A. NOS. 2189 & 2190/AHD./2010 ASSESSMENT YEAR : 2006-2007 SMT. MITA J. PAREKH -VS.- INCOME TAX OFFICER WARD-6(3) AHMEDABAD (PAN : AFQPS 0429 G) AHMEDABAD (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJESH KUMAR J . SONI RESPONDENT BY : SHRI K.M. MAHESH SR. D.R. O R D E R THESE TWO APPEALS FILED BY THE ASSESSEE ARE AGAINS T THE ORDERS BOTH DATED 22.04.2010 OF LEARNED COMMISSIONER OF INCOME TAX (APPEALS)-XXI A HMEDABAD CONFIRMING THE PENALTY OF RS.10 000/- LEVIED BY THE ASSESSING OFFICER UNDER S ECTION 271(1)(B) OF THE INCOME TAX ACT 1961 AND RS.10 164/- IN RESPECT OF PENALTY FOR CONCEALME NT OF PARTICULARS OF INCOME UNDER SECTION 271(1)(C) LEVIED BY THE ASSESSING OFFICER RESPECTIV ELY. BOTH THESE APPEALS WERE HEARD ON THE SAME DATE ARGUED BY COMMON LD. REPRESENTATIVE THE REFORE THESE ARE DECIDED BY THIS COMMON ORDER FOR THE SAKE OF CONVENIENCE. 2. BRIEFLY STATED THE FACTS ARE THAT THE ASSESSEE I S A WOMAN AND LIC AGENT. FOR THE ASSESSMENT YEAR UNDER APPEAL SHE FILED THE RETURN OF INCOME DECLARING TOTAL INCOME OF RS.1 52 534/- THE ASSESSING OFFICER FRAMED THE ASSE SSMENT UNDER SECTION 144 AND DISALLOWED 25% OUT OF EXPENSES CLAIMED IN THE PROFIT & LOSS A/ C. THE TOTAL DISALLOWANCE MADE BY THE ASSESSING OFFICER WAS RS.49 822/-. IN THE ASSESSMEN T ORDER THE ASSESSING OFFICER ALSO INITIATED THE PENALTY PROCEEDINGS UNDER SECTIONS 271(1)(B) AN D 271(1)(C) OF THE INCOME TAX ACT 1961. 2.1. SUBSEQUENTLY THE ASSESSING OFFICER LEVIED PEN ALTY OF RS.10 000/- UNDER SECTION 271(1)(B) ON 15.06.2009. ON APPEAL IN THE IMPUGNED ORDER THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) CONFIRMED THE SAID PENALTY. AGG RIEVED BY THIS ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) THE ASSESSEE I S IN APPEAL BEFORE THE TRIBUNAL VIDE ITA NO. 2189/AHD/2010. 2 ITA NOS . 2189 & 2190/AHD/2010 2.2. IN RESPECT OF DISALLOWANCE OF RS.10 164/- OUT OF VARIOUS EXPENSES DEBITED IN THE PROFIT & LOSS A/C. THE ASSESSING OFFICER LEVIED THE PENALTY UNDER SECTION 271(1)(C) VIDE ORDER DATED 26.06.2009. THIS PENALTY IS ALSO CONFIRMED BY THE L EARNED COMMISSIONER OF INCOME TAX(APPEALS) IN THE IMPUGNED ORDER ON 22.04.2010. A GGRIEVED BY THIS ORDER OF LEARNED COMMISSIONER OF INCOME TAX(APPEALS) THE ASSESSEE I S IN APPEAL BEFORE THE TRIBUNAL VIDE ITA NO. 2190/AHD/2010. 3. AT THE TIME OF HEARING BEFORE ME ON BEHALF OF A SSESSEE SHRI RAJESHKUMAR J. SONI LD. COUNSEL APPEARED AND CONTENDED THAT THE HUSBAND OF THE ASSESSEE APPEARED BEFORE THE ASSESSING OFFICER. THE LD. COUNSEL OF THE ASSESSEE VEHEMENTLY ADMITTED THAT SOMETIMES THE ASSESSEES HUSBAND SHRI NAYANBHAI SHAH WAS PREVENTED BY SUFFI CIENT CAUSE FROM ATTENDING AND PRODUCING EVIDENCE ON THE DATES FIXED FOR HEARING AS HE WAS P HYSICALLY UNABLE TO TRAVEL AND ATTEND THE DATES OF HEARING DUE TO REASON THAT THERE WAS SOME FAMILY AND SOCIAL DISPUTES. THE LD. COUNSEL OF THE ASSESSEE FURTHER SUBMITTED THAT IN THE RETURN OF IN COME THE ASSESSEE HAS MERELY DECLARED COMMISSION INCOME FROM LIC. THREE IS NO OTHER MAJOR INCOME EXCEPT LIC COMMISSION INCOME. IN THE ASSESSMENT ORDER THE ASSESSING OFFICER DISA LLOWED 25% OF VARIOUS EXPENSES DEBITED TO THE PROFIT & LOSS A/C. THIS DISALLOWANCE HAS BEEN ACCEP TED BY THE ASSESSEE AND INNOCENTLY PAID TAX AS PER THE ORDER OF ASSESSMENT WITHOUT KNOWLEDGE OF CONSEQUENCES OF THESE BOTH PENALTY PROCEEDINGS. THE LD. COUNSEL OF THE ASSESSEE SUBMIT TED THAT ON FACTS AND CIRCUMSTANCES OF THE CASE BOTH THE DEPARTMENTAL AUTHORITIES BELOW OUGHT TO HAVE TAKEN A LENIENT VIEW IN LEVYING PENALTY UNDER BOTH THESE SECTIONS. HE SUBMITTED THA T NO PENALTY UNDER SECTION 271(1)(C) IS LEVIABLE BECAUSE THE ASSESSEES CASE IS COVERED UND ER SECTION 273B OF THE INCOME TAX ACT 1961. 3.1. WITH REGARD TO DISALLOWANCE OF 25% OF EXPENSES DEBITED TO THE PROFIT & LOSS A/C. THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT NO PENALTY U NDER SECTION 271(1)(C) IS LEVIABLE IN VIEW OF THE RECENT JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. REPORTED IN [2010] 322 ITR 158 (SC). 4. ON THE OTHER HAND SHRI K.M. MAHESH LD. SR. D.R . APPEARING ON BEHALF OF THE REVENUE VEHEMENTLY SUPPORTED THE ORDER OF LEARNED COMMISSIO NER OF INCOME TAX(APPEALS). 3 ITA NOS . 2189 & 2190/AHD/2010 5. HAVING HEARD BOTH THE SIDES WE HAVE CAREFULLY G ONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE THAT DURING THE COUR SE OF ASSESSMENT PROCEEDINGS THE HUSBAND OF THE ASSESSEE SHRI NAYANBHAI SHAH APPEARED AND ALSO FILE D THE DETAILS AS ASKED BY THE ASSESSING OFFICER. ADMITTEDLY THERE WAS NON-COMPLIANCE OF NO TICES ALSO. THE REASONS FOR NON-COMPLIANCE OF NOTICES WERE FURNISHED BY THE ASSESSEE. THIS EX PLANATION HAS BEEN REJECTED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) ON DOUBTS AND S USPICION. BY CONSIDERING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE I AM THER EFORE OF THE VIEW THAT THIS IS NOT A FIT CASE FOR LEVYING PENALTY UNDER SECTION 271(1)(B) OF THE INCO ME TAX ACT 1961. THEREFORE PENALTY OF RS.10 000/- LEVIED BY THE ASSESSING OFFICER UNDER S ECTION 271(1)(B) IS CANCELLED. 5.1. COMING TO THE PENALTY OF CONCEALMENT OF PARTIC ULARS OF INCOME UNDER SECTION 271(1)(C) LEVIED BY THE ASSESSING OFFICER I AM OF THE VIEW T HAT IN THE ASSESSMENT ORDER THE ASSESSING OFFICER HAS DISALLOWED RS.49 822/- OUT OF EXPENSES TOTALING TO RS.1 99 289/-. THESE EXPENSES ARE OFFICE RENT EXPENSES SALARY EXPENSES TELEPHONE EX PENSES MEETING EXPENSES GIFT ARTICLE EXPENSES ETC. THE REASONING GIVEN BY THE ASSESSING OFFICER IS THAT THE ASSESSEE HAS NOT PRODUCED ANY DETAIL / BILLS VOUCHERS BOOKS OF ACCOUNTS ET C. ADMITTEDLY THIS DISALLOWANCE HAS BEEN MADE ON ESTIMATE BASIS. ON THIS DISALLOWANCE IN MY HUMB LE OPINION NO PENALTY UNDER SECTION 271(1)(C) OF THE ACT IS NOT LEVIABLE. IN SUPPORT OF THIS RELIANCE IS PLACED ON THE RECENT JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF RELIANC E PETRO PRODUCTS PVT. LTD. REPORTED IN [2010] 322 ITR 158 (SC). 5.2. IT IS PERTINENT TO NOTE THAT WHATEVER EXPENSES CLAIMED BY THE ASSESSEE FOR THE ASSESSMENT YEAR WAS RECORDED IN THE BOOKS OF ACCOUNTS THEREFO RE ON MERE DISALLOWANCE OF EXPENSES OR ESTIMATION OF INCOME ON ACCOUNT OF LOW GROSS PROFIT POST-SURVEY IS NO GROUND TO LEVY PENALTY UNDER SECTION 271(1)(C) OF THE INCOME TAX ACT 1961 . 5.3. THIS VIEW IS ALSO SUPPORTED BY THE RECENT JUD GMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF RELIANCE PETRO PRODUCTS PVT. LTD. REPORTED IN [2010] 322 ITR 158 (SC) WHEREIN THE HON'BLE SUPREME COURT HELD THAT MAKING INCORRECT C LAIM DOES NOT AMOUNT TO CONCEALMENT OF PARTICULARS OF INCOME. THE HEAD-NOTES OF THE SAID DECISION READS AS UNDER :- 4 ITA NOS . 2189 & 2190/AHD/2010 A GLANCE AT THE PROVISIONS OF SECTION 271(1)(C) OF THE INCOME TAX ACT 1961 SUGGESTS THAT IN ORDER TO BE COVERED BY IT THERE H AS TO BE CONCEALMENT OF THE PARTICULARS OF THE INCOME OF THE ASSESSEE. SECONDLY THE ASSESSEE MUST HAVE FURNISHED INACCURATE PARTICULARS OF HIS INCOME. THE MEANING OF THE WORD PARTICULARS USED IN SECTION 271(1)(C) WOULD EMBRA CE THE DETAILS OF THE CLAIM MADE. WHERE NO INFORMATION GIVEN IN THE RETURN IS F OUND TO BE INCORRECT OR INACCURATE THE ASSESSEE CANNOT BE HELD GUILTY OF F URNISHING INACCURATE PARTICULARS. IN ORDER TO EXPOSE THE ASSESSEE TO PEN ALTY UNLESS THE CASE IS STRICTLY COVERED BY THE PROVISION THE PENALTY PROVISION CAN NOT BE INVOKED. BY NO STRETCH OF IMAGINATION CAN MAKING AN INCORRECT CLAIM TANTAMOUN T TO FURNISHING INACCURATE PARTICULARS. THERE CAN BE NO DISPUTE THAT EVERYTHIN G WOULD DEPEND UPON THE RETURN FILED BY THE ASSESSEE BECAUSE THAT IS THE ONLY DOC UMENT WHERE THE ASSESSEE CAN FURNISH THE PARTICULARS OF HIS INCOME. WHEN SUCH PA RTICULARS ARE FOUND TO BE INACCURATE THE LIABILITY WOULD ARISE. TO ATTRACT P ENALTY THE DETAILS SUPPLIED IN THE RETURN MUST NOT BE ACCURATE NOT EXACT OR CORRECT NOT ACCORDING TO THE TRUTH OR ERRONEOUS. WHERE THERE IS NO FINDING THAT ANY DETAILS SUPPLIE D BY THE ASSESSEE IN ITS RETURN ARE FOUND TO BE INCORRECT OR ERRONEOUS OR FA LSE THERE IS NO QUESTION OF INVITING THE PENALTY UNDER SECTION 271(1)(C). A MER E MAKING OF A CLAIM WHICH IS NOT SUSTAINABLE IN LAW BY ITSELF WILL NOT AMOUNT TO FURNISHING INACCURATE PARTICULARS REGARDING THE INCOME OF THE ASSESSEE. S UCH A CLAIM MADE IN THE RETURN CANNOT AMOUNT TO FURNISHING INACCURATE PARTICULARS . 5.4. ON PERUSAL OF THE REASONING GIVEN BY THE ASSES SING OFFICER IN THE ASSESSMENT ORDER AND LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IN QUAN TUM APPEAL AND KEEPING IN VIEW THAT IN QUANTUM APPEAL THE ADDITION WHICH WERE MADE BY TH E ASSESSING OFFICER AND CONFIRMED BY THE LEARNED COMMISSIONER OF INCOME TAX(APPEALS) WAS MA DE ON ACCOUNT OF DIFFERENCE OF OPINION BETWEEN THE ASSESSEE AND ASSESSING OFFICER. ALL THE MATERIAL FACTS WERE DISCLOSED IN THE RETURN AND THEREFORE IT CANNOT BE SAID THAT ASSESSEE HAD FURNISHED INACCURATE PARTICULARS OR CONCEALED INCOME. ADMITTEDLY THE CASE OF THE ASSESSEE DOES NOT FALL WITHIN THE MISCHIEF OF MAIN PROVISION OF SECTION 271(1)(C) OF THE INCOME TAX ACT 1961 BE CAUSE MERE REJECTION OF ASSESSEES CLAIM WOULD NOT BE SUFFICIENT TO HOLD THE ASSESSEE TO BE GUILTY OF CONCEALMENT. THE HON'BLE GUJARAT HIGH COURT IN THE CASE OF SARABHAI CHEMICAL (P) LTD . [2002] 257 ITR 355 (GUJ.) HELD AS UNDER :- THE DEEMING FICTION THAT THE ADDED/ DISALLOWED AMO UNTS REPRESENT THE INCOME IN RESPECT OF WHICH PARTICULARS HAVE BEEN CONCEALED CONTAINED IN EXPLANATION 1 WILL NOT APPLY IF THE EXPLANATION THAT WAS GIVEN BY THE ASSESSEE IN THE Q UANTUM PROCEEDINGS WHICH HE COULD NOT SUBSTANTIATE IN THOSE PROCEEDINGS WAS (I) BONA FIDE AND (II) IF HE HAD DISCLOSED ALL THE FACTS RELATING TO THE SAME AND MATERIAL TO THE COMPUTATIO N OF HIS TOTAL INCOME. IN CASES WHERE EXPLANATION WAS OFFERED BUT WAS REJECTED AS IT COU LD NOT BE SUBSTANTIATED BY THE ASSESSEE THERE WOULD ARISE NO PRESUMPTION OF CONCEALMENT OF THE PARTICULARS OF INCOME THAT WAS ADDED OR DISALLOWED AND SUCH ASSESSEE CAN SHOW THAT THE SAID EXPLANATION OFFERED BY HIM WAS A BONA FIDE ONE AND THAT HE HAD DISCLOSED ALL F ACTS RELATING TO SUCH EXPLANATION AND MATERIAL TO THE COMPUTATION OF HIS TOTAL INCOME DUR ING THE QUANTUM PROCEEDINGS. 5 ITA NOS . 2189 & 2190/AHD/2010 IN THE PRESENT CASE THE ASSESSEE HAS DISCLOSED AL L THE MATERIAL FACTS. I THEREFORE BY RELYING ON THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CA SE OF RELIANCE PETRO PRODUCTS PVT. LTD. (SUPRA) ARE OF THE VIEW THAT LEARNED COMMISSIONER OF INCOME TAX(APPEALS) IS NOT LEGALLY AND FACTUALLY CORRECT IN LEVYING THE PENALTY ON THE ASS ESSMENT YEAR UNDER APPEAL. I THEREFORE CANCEL THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER S ECTION 271(1)(C) FOR THE ASSESSMENT YEAR UNDER APPEAL. 6. IN THE RESULT BOTH THE APPEALS FILED BY THE ASS ESSEE ARE ALLOWED. THE ORDER WAS PRONOUNCED IN THE COURT ON 24.08.20 10 SD/- (T.K. SHARMA) JUD ICIAL MEMBER DATED : 24/ 08 / 2010 COPY OF THE ORDER IS FORWARDED TO : (1) THE ASSESSEE (2) THE DEPARTMENT. (3) CIT(A.) CONCERNED (4) CIT CONCERNED (5) D.R . ITAT AHMEDABAD. TRUE COPY BY ORDER DEPUTY REGI STRAR ITAT AHMEDABAD LAHA/SR.P.S.