M/s. Krishi Upaj Mandi Samiti,, Khargone v. The I..T.O., Khargone

ITA 37/IND/2010 | 2005-2006
Pronouncement Date: 02-03-2011 | Result: Dismissed

Appeal Details

RSA Number 3722714 RSA 2010
Bench Indore
Appeal Number ITA 37/IND/2010
Duration Of Justice 1 year(s) 1 month(s) 11 day(s)
Appellant M/s. Krishi Upaj Mandi Samiti,, Khargone
Respondent The I..T.O., Khargone
Appeal Type Income Tax Appeal
Pronouncement Date 02-03-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted DB
Tribunal Order Date 02-03-2011
Date Of Final Hearing 09-02-2011
Next Hearing Date 09-02-2011
Assessment Year 2005-2006
Appeal Filed On 21-01-2010
Judgment Text
1 IN THE INCOME TAX APPELLATE TRIBUNAL INDORE BENCH INDORE BEFORE SHRI JOGINDER SINGH JUDICIAL MEMBER AND SHRI R.C. SHARMA ACCOUNTANT MEMBER ITA NO.36 AND 37/IND/2010 A.YS.2004-05 AND 2005-06 KRISH UPAJ MANDI SAMITI KARHI PAN AAALK-0249F APPELLANT VS INCOME TAX OFFICER KHARGONE RESPONDENT APPELLANT BY : SHRI T.N. UNNI CA RESPONDENT BY : SHRI P.K. MITRA O R D E R PER JOGINDER SINGH JUDICIAL MEMBER THESE ARE THE APPEALS BY THE ASSESSEE AGAINST THE C OMMON ORDER OF THE LEARNED CIT DATED 27.11.2009 ON THE GROUND THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LEARNED COMMI SSIONER OF INCOME- TAX (APPEALS) ERRED IN CONFIRMING THE LEVY OF PENAL TY IMPOSED U/S 271(1) OF THE ACT ESPECIALLY WHEN THE FACTS WERE N OT APPRECIATED IN A REQUIRED MANNER. 2 2. DURING HEARING WE HAVE HEARD SHRI T.N. UNNI LD . COUNSEL FOR THE ASSESSEE AND SHRI P.K. MITRA LEARNED SENIOR DEPART MENTAL REPRESENTATIVE. THE CRUX OF ARGUMENTS ON BEHALF OF THE ASSESSEE IS THAT THE ASSESSEE IS A CREATION OF STATUTE AND THE MEMBE RS OF THE ASSESSEE SOCIETY ARE FARMERS WHOSE PRODUCE IS MARKETED AT TH E PREMISES OF THE ASSESSEE THE ASSESSEE SOCIETY WHICH IS MANAGED BY OFFICERS OF THE STATE GOVERNMENT HAS BEEN GRANTED REGISTRATION UND ER SECTION 12A OF THE ACT. THE INTEREST INCOME WAS CLAIMED TO BE DUL Y ACCOUNTED ON THE BASIS OF METHOD REGULARLY AND CONSISTENTLY FOLLOWED BY THE ASSESSEE AND NON-INCLUSION OF INTEREST INCOME WAS NOT DUE TO FRA UD OR ANY NEGLIGENCE ON THE PART OF THE ASSESSEE. A STRONG PLEA WAS RAI SED THAT UP TO ASSESSMENT YEAR 2002-03 THE INCOME OF THE ASSESSEE WAS EXEMPT U/S 10(20) OF THE ACT. OUR ATTENTION WAS INVITED TO PA GES 3 TO 6 OF THE PAPER BOOK CONTAINING DETAILS OF INTEREST INCOME. IT WAS ALSO PLEADED THAT THE ASSESSEE HAS NO CONTROL OVER 2/3 RD OF SATHAI NIDHI AMOUNT AND REGISTRATION U/S 12A WAS GRANTED FROM THE DATE OF C REATION BY THE TRIBUNAL VIDE ORDER DATED 14.12.2007. THE LD. COUN SEL FOR THE ASSESSEE ALSO CANVASSED THAT IT WAS NOT THE INCOME OF THE AS SESSEE. ON THE OTHER HAND THE LEARNED SENIOR DEPARTMENTAL REPRESENTATIVE STRONGLY DEFENDED THE IMPUGNED ORDER BY CONTENDING THAT THE ASSESSEE HAS FAILED TO OFFER ANY REASONABL E AND ACCEPTABLE EXPLANATION FOR NON-INCLUSION OF HUGE ACCRUED INTER EST IN THE INCOME OF 3 THE ASSESSEE AND THE PLEA OF THE ASSESSEE THAT SUCH INCOME WAS NOT LIABLE TO BE TAXED ON ACCRUAL BASIS IS NOT SUBSTANT IATED IN ANY MANNER. A STRONG PLEA WAS RAISED THAT THE FACT OF NON-INCLUSI ON OF SUCH INCOME WAS NOT BROUGHT ON RECORD IN ITS RETURN FILED BY THE AS SESSEE. 3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF LD. REP RESENTATIVES OF BOTH SIDES AND PERUSED THE MATERIAL AVAILABLE ON RE CORD. BRIEF FACTS ARE THAT THE ASSESSEE IS A LOCAL AUTHORITY ENGAGED IN P ROVIDING FACILITIES TO THE FARMERS TO SELL OUT THEIR AGRICULTURAL PRODUCES . THE ASSESSEE SHOWED INCOME FROM MANDI FEE INTEREST ETC. THE ASSESSEE IS HAVING RECEIPT OF MANDI TAX AMOUNTING TO RS.92 64 108/- BESIDES OTHER INCOME. AS PER THE REVENUE THE ASSESSEE WAS SUPPOSED TO GET ITS ACCOU NTS AUDITED AS PER THE PROVISIONS OF SECTION 44AB OF THE ACT AND THE A SSESSEE COMMITTED A DEFAULT BY NOT INCLUDING THE ACCRUED INTEREST OF FI XED DEPOSITS ACCRUED ON YEARLY BASIS. DURING HEARING THE LD. COUNSEL FOR T HE ASSESSEE CONTENDED THAT THERE WAS NO MENS REA ON THE PART OF THE ASSES SEE SOCIETY NOT TO INCLUDE INTEREST INCOME. HE THEREFORE SUBMITTED T HAT THE PENALTY SHOULD NOT BE LEVIED. HOWEVER IN VIEW OF THE DECISION OF THE HONBLE APEX COURT IN THE CASE OF UNION OF INDIA AND OTHER V. DH ARMENDRA TEXTILES PROCESSORS AND OTHERS (295 ITR 244) MENS REA IS NO T REQUIRED TO BE PROVED FOR DEFAULT. IN THE PRESENT APPEAL THERE IS A CLEAR CUT OMISSION ON THE PART OF THE ASSESSEE IN NOT INCLUDING THE ACCRUED INTEREST ON FIXED DEPOSITS WHICH ACCRUED ON YEARLY BASIS. EVEN THE ASSESSEE IS 4 FOLLOWING THE SYSTEM ON RECEIPT BASIS. THEREFORE T HE PENALTY IS ATTRIBUTABLE ON THE INTEREST AMOUNT. IT IS PERTINE NT TO MENTION HERE THAT THE FDRS FROM WHICH THE INTEREST ACCRUED IS SHOWN I N THE BALANCE-SHEET OF THE ASSESSEE MEANING THEREBY IT IS PART OF THE B OOKS OF THE ASSESSEE THEREFORE THE ARGUMENT OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT IT IS NOT THE INCOME OF THE ASSESSEE IS FACTUALLY INCORRE CT THEREFORE IN OUR CONSIDERED OPINION THE PENALTY WAS RIGHTLY IMPOSED. THE ACTIVITIES AND AFFAIRS OF THE ASSESSEE SAMITI ARE MANAGED BY THE O FFICERS AND STAFF DEPUTED BY THE GOVERNMENT. THE ASSERTION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE STAFF WAS NOT AWARE OF THE PROVIS IONS OF THE INCOMETAX ACT IS ALSO NOT SO CONVINCING BECAUSE THE ASSESSEE IS ASSISTED BY THE ADVICE OF TAX EXPERTS. THE OFFICERS AND STAFF ARE EXPECTED TO MAKE THE LEGAL REPRESENTATIVE AWARE ABOUT THE FACTUAL POSITI ON. THE ASSESSEE IS ASSISTED BY THE CHARTERED ACCOUNTANTS/ADVOCATES WHO ARE EXPECTED TO BE WELL VERSED WITH THE TAX LAWS. THEREFORE THE C ONTENTION OF THE ASSESSEE THAT THEY ARE NOT AWARE OF THE INCOME TAX ACT IS NOT BASED ON FACTS. THE LD. COUNSEL FOR THE ASSESSEE TOOK ANOTH ER PLEA THAT THE AMOUNT OF SATHAI NIDHI IS UNDER THE CONTROL DIRECT ION AND MANAGEMENT OF THE MANDI BOARD BHOPAL IS ALSO NOT CONVINCING BECAUSE THE IMPUGNED INTEREST INCOME IS NOT SHOWN IN THE ACCOUN T OF THE APEX BOARD/MANDI BOARD RATHER IT IS VERY MUCH PART OF TH E INCOME OF THE ASSESSEE. THEREFORE ON THIS PLEA ALSO THE CASE O F THE ASSESSEE IS ON 5 SLIPPERY WICKET. SINCE THE INTEREST INCOME ACCRUED TO THE ASSESSEE FROM FIXED DEPOSITS ON YEARLY BASIS THERE IS A CLEAR CU T OMISSION ON THE PART OF THE ASSESSEE NOT TO INCLUDE THE SAME IN ITS TOTAL I NCOME. IN VIEW OF THESE FACTS THE ASSESSEE FURNISHED INACCURATE PART ICULARS OF ITS INCOME BY CONCEALING THE INTEREST INCOME THEREFORE IT IS A CLEAR CASE OF IMPOSITION OF PENALTY U/S 271(1) OF THE ACT BECAUS E A DUTY HAS BEEN ENJOINED UPON THE ASSESSEE TO MAKE CORRECT DISCLOSU RE OF ITS INCOME. CONCEALMENT REFERS TO A DELIBERATE ACT ON THE PART OF THE ASSESSEE. THE EXPRESSION INCOME MEANS THE TOTAL INCOME FOR WHIC H THE ASSESSEE IS BOUND TO FILE THE RETURN U/S 139(1) OF THE ACT AND INCLUDES THE INCOME WHICH IS INCLUDIBLE IN ITS INCOME U/S 64. WE ARE A WARE THAT FOR IMPOSING PENALTY U/S 271(1) OF THE ACT A DEFINITE FINDING ABOUT CONCEALMENT IS NECESSARY. IN THE PRESENT APPEAL THE ASSESSEE NEI THER INCLUDED THE INTEREST INCOME WHILE FILING THE RETURN OF INCOME N OR A NOTE WAS APPENDED TO THE COMPUTATION OF INCOME THAT THE FIXE D DEPOSIT OR SATHAI NIDHI IS THE INCOME OF THE APEX BODY OR NOT THE INC OME OF THE ASSESSEE. THEREFORE IT IS A CLEAR CASE OF FURNISHING OF INAC CURATE PARTICULARS OR CONCEALING OF INCOME. THE PRIMARY ONUS THAT THERE W AS NO CONCEALMENT IN VIEWS OF EXPLANATION 1 TO SECTION 271(1) IS ON THE ASSESSEE AND THE ASSESSEE IS FURTHER EXPECTED TO EXPLAIN ITS BONAFID ES THAT ALL THE FACTS AND THE MATERIAL OF COMPUTATION OF TOTAL INCOME HAV E BEEN CORRECTLY 6 DISCLOSED. SUCH ONUS HAS NOT BEEN DISCHARGED. THERE FORE THE STAND OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) IS AFFIRMED. IN THE RESULT BOTH THESE APPEALS OF THE ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN OPEN COURT IN THE PRESENCE OF LEARNED REPRESENTATIVES OF BOTH THE SIDES AT THE CONCLUSION OF THE HEARING ON 2 ND MARCH 2011. (R.C.SHARMA) (JOGINDE R SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 2 ND MARCH 2011 COPY TO: APPELLANT RESPONDENT CIT CIT(A) DR G UARD FILE 7