Sh. Yashpal Singh Aulakh, New Delhi v. DCIT, New Delhi

ITA 677/DEL/2010 | 2004-2005
Pronouncement Date: 08-07-2010 | Result: Allowed

Appeal Details

RSA Number 67720114 RSA 2010
Assessee PAN DELOF2010A
Bench Delhi
Appeal Number ITA 677/DEL/2010
Duration Of Justice 4 month(s) 23 day(s)
Appellant Sh. Yashpal Singh Aulakh, New Delhi
Respondent DCIT, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 08-07-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted I
Tribunal Order Date 08-07-2010
Date Of Final Hearing 08-07-2010
Next Hearing Date 08-07-2010
Assessment Year 2004-2005
Appeal Filed On 15-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH I ; NEW DELHI BEFORE SHRI C.L. SETHI JM AND SHRI K.D. RANJAN AM I.T.A. NOS.676 & 677/DEL OF 2010 ASSESSMENT YEAR: 2004-05 SHRI YASHPAL SINGH AULAKH DCIT CIRCLE 24(1 ) B-XI/8002 GROUND FLOOR VS NEW DELHI. VASANT KUNJ NEW DELHI. APPELLANT RESPONDENT APPELLANT BY: SHRI VED JAIN & ASSOCIATES CA RESPONDENT BY: MS ANUSHA KHURANA DR ORDER PER C.L. SETHI JM THESE TWO APPEALS ARE FILED BY THE ASSESSEE AGAINS T TWO SEPARATE ORDERS BOTH DATED 22.12.2009 PASSED BY THE LEARNED CIT(A) IN THE MATTER OF A PENALTY ORDER PASSED BY THE AO U/S 271A AND 271B OF THE INCOME-TAX ACT 1961 (THE ACT) PERTAINING TO THE ASSTT. YEAR 2004-0 5. 2. WE SHALL FIRST TAKE THE APPEAL I.E. ITA NO.676/ DEL/2010 RELATING TO THE PENALTY LEVIED U/S 271A OF THE ACT BY THE AO. 3. IN THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS NOTICED BY THE AO THAT ASSESSEE BEING A CONTRACTOR HAD A GROSS RECEIPTS FROM CONTRACT WORKS OF RS.2 19 29 767/- WHEREUPON THE ASSESSEE DISCLOSED T HE PROFIT BY APPLYING 2 8% RATE OF NET PROFIT. NO PROFIT AND LOSS ACCOUNT BALANCE SHEET ETC. WERE FILED ALONG WITH THE RETURN OF INCOME. IT WAS THUS CLEAR THAT THE ASSESSEE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNT AND THE ASSES SEE HAS SUBMITTED THE RETURN BY APPLYING THE RATE OF NET PROFIT ON GROSS RECEIPTS RECEIVED DURING THE YEAR. AS THE GROSS RECEIPTS OF THE BUSINESS EXCEED ED AMOUNT OF RS.40 LACS AND SINCE THE ASSESSEES GROSS RECEIPTS OF THE BUSI NESS EXCEEDED RS.10 LACS IN ONE OF THE THREE YEARS IMMEDIATELY PRECEDING THE PR EVIOUS YEAR THE AO HAD TAKEN A VIEW THAT THE ASSESSEE WAS REQUIRED TO KEEP AND MAINTAIN SUCH BOOKS OF ACCOUNTS AND OTHER DOCUMENTS AS MAY ENABLE THE A O TO COMPUTE THE TOTAL INCOME IN ACCORDANCE WITH THE PROVISIONS OF THE INC OME-TAX ACT. AS THE ASSESSEE FAILED TO COMPLY WITH THE PROVISIONS OF SE CTION 44AA OF THE ACT BY NOT MAINTAINING THE REGULAR BOOKS OF ACCOUNTS THE AO HAD TAKEN A VIEW THAT PENALTY U/S 271A OF THE ACT WAS IMPOSABLE UPON THE ASSESSEE. HE THEREFORE INITIATED PENALTY PROCEEDINGS U/S 271A AND ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE. NOBODY FOR THE ASSESSEE ATTENDED IN RESP ONSE TO THE SHOW CAUSE NOTICE NOR ANY EXPLANATION WAS FILED. THE AO THER EFORE TAKEN A VIEW THAT ASSESSEE HAD NOTHING TO SAY WITH REGARD TO THE SHOW CAUSE NOTICE ISSUED BY HIM. THE AO THEREFORE LEVIED A PENALTY OF RS.25 0 00/- U/S 271A OF THE ACT VIDE HIS ORDER DATED 25.6.2007. 3 4. BEING AGGRIEVED ASSESSEE PREFERRED AN APPEAL BE FORE THE CIT(A) WHO HAD CONFIRMED THE AOS ORDER BY OBSERVING THAT THE ASSESSEES STAND IN NOT MAINTAINING THE BOOKS OF ACCOUNT CANNOT BE CONSIDE RED TO BE BONAFIDE SO AS TO RELIEVE HIM FROM LEVY OF PENALTY U/S 271A OF THE ACT. 5. STILL AGGRIEVED THE ASSESSEE IS IN APPEAL BEFOR E US. 6. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PER USED THE MATERIAL ON RECORD. IT IS NOT IN DISPUTE THAT THE ASSESSEE HAS NOT FILED AN EXPLANATION GIVING ANY REASON FOR NOT MAINTAINING THE BOOKS OF ACCOUNT REQUIRED TO BE MAINTAINED U/S 44AA OF THE ACT NEITHER THE ASSESSE E HAS GIVEN ANY BONAFIDE EXPLANATION BEFORE US FOR NOT MAINTAINING THE SAME. WE ARE THEREFORE OF THE CONSIDERED VIEW THAT THE AO HAS RIGHTLY LEVIED THE PENALTY U/S 271A OF THE ACT AND ACCORDINGLY THE ORDER OF CIT(A) CONF IRMING THE PENALTY IS UPHELD. 7. NOW WE SHALL TAKE UP APPEAL I.E. ITA NO.677/DE L/2010 RELATING TO THE PENALTY LEVIED U/S 271B OF THE ACT. 8. IN THIS CASE BESIDES LEVYING PENALTY U/S 271A O F THE ACT IN NOT MAINTAINING BOOKS OF ACCOUNT REQUIRED U/S 44AA OF T HE ACT THE AO HAS ALSO LEVIED PENALTY U/S 44AB FOR NOT GETTING THE ACCOUNT S AUDITED AND FILING THE STATUTORY REPORT AS REQUIRED U/S 44AB OF THE ACT. THE MAXIMUM PENALTY OF RS.1 LAC WAS THUS IMPOSED BY THE AO U/S 271B OF T HE ACT FOR NOT 4 COMPLYING WITH THE PROVISIONS OF SECTION 44AB OF TH E ACT. ON AN APPEAL THE PENALTY HAS BEEN CONFIRMED BY THE LEARNED CIT(A ) BY OBSERVING THAT IT WAS THE STATUTORY DUTY OF THE ASSESSEE TO OBTAIN AN AUDIT REPORT REQUIRED U/S 44AB AND TO FURNISH THE SAME ALONG WITH THE RETURN OF INCOME WHICH ASSESSEE HAS NOT DONE. 9. WE HAVE HEARD BOTH THE PARTIES. AFTER HEARING T HE LEARNED REPRESENTATIVES FOR BOTH THE PARTIES AND CONSIDER ING THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE WE ARE OF THE CONSID ERED VIEW THAT PENALTY U/S 271B IN THE PRESENT CASE IS NOT AT ALL CALLED FOR INASMUCH AS THERE WERE NO ACCOUNTS MAINTAINED BY THE ASSESSEE THAT COULD BE G ET AUDITED U/S 44AB OF THE ACT. WHEN IT IS THE CASE OF THE AO THAT ASSESS EE WAS NOT MAINTAINING ANY BOOKS OF ACCOUNTS OR DOCUMENTS AS REQUIRED U/S 44AA OF THE ACT OR OTHERWISE THE QUESTION OF GETTING THE ACCOUNTS AUD ITED AS REQUIRED U/S 44AB DOES NOT ARISE. THE PENALTY U/S 271A FOR NOT MAINT AINING THE BOOKS OF ACCOUNT HAS ALSO BEEN LEVIED BY THE AO WHICH HAS B EEN CONFIRMED BY THE LEARNED CIT(A) AND FURTHER CONFIRMED BY THIS TRIBU NAL VIDE THIS COMMON ORDER. THEREFORE WHEN THE ASSESSEE MAINTAINS NO B OOKS OF ACCOUNT QUESTION OF GETTING THEM AUDITED DOES NOT ARISE AN D AS SUCH NO PENALTY U/S 271B IS ATTRACTED. WE THEREFORE UPHELD THE PENAL TY LEVIED U/S 271B BY THE AO. IN SUPPORT OF THE VIEW WE HAVE TAKEN ABOVE A REFERENCE MAY BE MADE 5 TO THE DECISION OF HONBLE GAUHATI HIGH COURT IN TH E CASE OF SURAJMAL PARSHURAM TODI VS CIT (1996) 222 ITR 691(GAU) WHER E IT HAS BEEN HELD THAT WHERE A PERSON COMMITS AN OFFENCE OF NOT MAINT AINING BOOKS OF ACCOUNTS AS CONTEMPLATED BY SECTION 44AA THE OFFEN CE IS COMPLETE AND AFTER THAT THERE CAN BE NO POSSIBILITY OF ANY OFFE NCE CONTEMPLATED BY SECTION 44AB I.E. NOT GETTING ACCOUNTS AUDITED AND OBTAINI NG AN AUDIT REPORT AND THEREFORE PENALTY CANNOT BE IMPOSED U/S 271B WHEN AN OFFENCE IS ALREADY MADE U/S 44AA FOR NOT MAINTAINING THE BOOKS OF ACC OUNTS. THUS THE ORDER LEVYING PENALTY U/S 271B IS CANCELLED. 10. IN THE RESULT ITA NO.676/DEL/2010 RELATING TO THE LEVY OF PENALTY U/S 271A IS DISMISSED AND ITA NO.677/DEL/2010 RELATING TO THE LEVY OF PENALTY U/S 271B IS ALLOWED. 11. THIS DECISION WAS PRONOUNCED IN THE OPEN COURT ON 8 TH JULY 2010 IMMEDIATELY AFTER THE HEARING WAS OVER. (K.D. RANJAN) (C.L. SETHI) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 8 TH JULY 2010 VIJAY 6 COPY TO: 1. APPELLANT. 2. RESPONDENT. 3. CIT 4. CIT(A)-XXIII NEW DELHI. 5. DR ASSISTANT REGISTRAR