M/s Amar Nath Achal Kumar, Barnala v. ACIT, Sangrur

ITA 750/CHANDI/2011 | 2007-2008
Pronouncement Date: 27-12-2011 | Result: Allowed

Appeal Details

RSA Number 75021514 RSA 2011
Bench Chandigarh
Appeal Number ITA 750/CHANDI/2011
Duration Of Justice 5 month(s) 9 day(s)
Appellant M/s Amar Nath Achal Kumar, Barnala
Respondent ACIT, Sangrur
Appeal Type Income Tax Appeal
Pronouncement Date 27-12-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted B
Tribunal Order Date 27-12-2011
Date Of Final Hearing 26-12-2011
Next Hearing Date 26-12-2011
Assessment Year 2007-2008
Appeal Filed On 18-07-2011
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH B CHANDIGARH BEFORE SHRI H.L.KARWA VICE PRESIDENT AND SHRI MEHAR SINGH ACCOUNTANT MEMBER ITA NO. 750/CHD/2011 ASSESSMENT YEAR: 2007-08 M/S AMAR NATH ACHAL KUMAR V ACIT CIRCLE SADAR BAZAR SANGRUR. BARNALA. PAN: AACFA-3962F (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAKESH KUMAR GUPTA RESPONDENT BY: SHRI N.K.SAINI DATE OF HEARING : 26.12.2011 DATE OF PRONOUNCEMENT : 27.12.2011 ORDER PER MEHAR SINGH AM THE PRESENT APPEAL FILED BY THE ASSESSEE IS DIRECTE D AGAINST THE ORDER DATED 09.06.2011 PASSED BY THE LD . CIT(A) PATIALA U/S 250(6) OF THE INCOME-TAX ACT 1961 (IN S HORT 'THE ACT'). 2. IN THIS APPEAL THE ASSESSEE HAS RAISED THE FOLL OWING GROUNDS OF APPEAL: 1. THAT THE LD. CIT(A) HAS ERRED IN LAW AND ON FACTS IN UPHOLDING THE PENALTY OF RS.60 756/- U/S 271(1)(C) OF THE INCOME-TAX ACT 1961 IMPOSED BY THE LD. ACIT ON ACCOUNT OF DISALLOWANCE OF LABOUR PAID FOR JOB WORK AMOUNTING TO RS.1 80 250/- PAID TO THREE GOLDSMITHS UNDER THE DEEMING PROVISIONS OF SECTION 40(A)(IA) READ WITH SECTION 194C OF THE ACT IBID AND FURTHER ERRED IN LAW AND ON FACTS IN IGNOR ING THE WRITTEN SUBMISSIONS FILED BEFORE THE LD. CIT(A) 2 WHILE THE GENUINENESS OF THE LABOUR PAID TO THE ABOVESAID THREE GOLDSMITHS HAS NEVER BEEN IN DOUBT EITHER BEFORE THE LD. CIT(A) OR BEFORE THE AO. 2. THAT THE LD. CIT(A) HAS FURTHER ERRED IN PLACING HIS RELIANCE ON THE CASE OF CIT V MANGHA RAM OM PARKASH (2005) 276 ITR 362 (P&H) ON THE BASIS OF WHICH HE WENT AHEAD IN CONFIRMING THE PENALTY ARE COMPLETELY DISTINCT FROM THE CASE OF YOUR APPELLANT BOTH ON LAW FACTS AND CIRCUMSTANCES APPLICABLE IN THE INSTANT CASE BECAUSE OF WELL DISTINGUISHED POSITION AND SITUATION OF YOUR APPELLANTS CASE AND FURTHER GROSSLY ERRED IN NOT FOLLOWING THE JUDGMENT WHICH IS DIRECT ON THE ISSUE IN THE CASE OF ACIT V BHORUKA LOGISTICS (P) LTD. REPORTED IN (2010) 34 (I I) ITCL 552 (MUM-B) QUOTED BEFORE HIM SUPPORTED BY VARIOUS OTHER JUDGMENTS WHICH HAVE A DIRECT BEARING IN THE CASE OF YOUR APPELLANT. THAT UPHOLDING OF PENALTY BY THE LD. CIT(A) U/S 271(1)(C) IS ARBITRAR Y AND IS AGAINST THE BASIC PROVISIONS OF LAW AND IS BASED ON SURMISES CONJECTURES AND IS NOT AT ALL WARRANTED UNDER THE LAW AND FACTS OF THE CASE. 3. THAT THE LD. CIT(A) FURTHER ERRED IN LAW AND ON FACTS IN NOT GIVING ANY FINDING ON THE ISSUE THAT T HE LD. AO FAILED TO STRIKE THE ALTERNATIVE AS TO WHETH ER THE DEFAULT OF YOUR APPELLANT IS TO CONCEAL THE INC OME OR THE DEFAULT IS OF FURNISHING OF INACCURATE PARTICULARS OF INCOME. 4. THAT THE PENALTY U/S 271(1)(C) CONFIRMED BY THE CIT(A) BEING ILLEGAL MAY BE ABROGATED OR ANY OTHER SUITABLE ORDER PASSED GIVING MAXIMUM RELIEF TO YOUR APPELLANT. 5. THAT YOUR APPELLANT CRAVES TO LEAVE OR TO ADD ANY GROUND OF APPEAL BEFORE THE SAME IS HEARD AND DISPOSED OF. 3 3. LD. 'AR' CONTENDED THAT THE PENALTY OF RS.60 756 /- U/S 271(1)(C) OF THE ACT UPHELD BY THE CIT(A) IS NOT IN CONSONANCE WITH PROVISIONS OF THIS SECTION AND RELE VANT EXPLANATIONS THEREUNDER. HE WAS OF THE OPINION THA T MERE DISALLOWANCE WOULD NOT LEAD TO LEVY OF PENALTY IN A CASE WHERE ALL THE RELEVANT PARTICULARS OF INCOME HAVE B EEN DULY DISCLOSED BY THE ASSESSEE. HE FURTHER ARGUED THAT THE EXPLANATION FILED BY THE ASSESSEE IS BONAFIDE AND B ASED ON THE FOUNDATION OF FACTS OF THE PRESENT CASE. THE AS SESSEE COULD NOT DEDUCT TAX IN RESPECT OF THREE GOLDSMITHS UNDER THE DEEMING PROVISIONS OF SECTION 40(A)(IA) READ WI TH SECTION 194C OF THE ACT BECAUSE OF IGNORANCE IN THE MATTER. IT WAS FURTHER ARGUED THAT THE GENUINENESS OF THE LABOUR C HARGES PAID BY THE ASSESSEE IS NOT IN DOUBT AT ANY LEVEL. THE LD. 'AR' PLACED RELIANCE ON THE DECISION IN THE CASE OF ACIT V BHORUKA LOGISTICS P.LTD. (2010) 34 (II) ITCL 552 (M UM-B). LD. 'AR' ALSO STATED THAT THE CASE LAWS RELIED UPON BY THE CIT(A) IN THE CASE OF CIT V MANGHA RAM OM PARKASH ( 2005) 276 ITR 362 (P&H) IS NOT APPLICABLE TO THE FACTS OF THE PRESENT CASE. 4. LD. 'DR' PLACED RELIANCE ON THE ORDER PASSED BY THE AO. 5. WE HAVE CAREFULLY PERUSED THE RIVAL SUBMISSIONS AND FACTS OF THE CASE. IN OUR CONSIDERED OPINION IT I S NOT A CASE OF CONCEALING PARTICULARS OF INCOME OR FURNISHING I NACCURATE PARTICULARS OF INCOME AS CONTEMPLATED U/S 271(1)(C ) OF THE ACT. IT IS A CASE WHERE THE AO HAS MADE DISALLOWAN CE ON THE NON-COMPLIANCE OF TDS PROVISIONS AS DISCUSSED EARL IER. THE ASSESSEE HAS FILED EXPLANATION CLEARLY STATING THA T THE 4 TRANSACTIONS ARE GENUINE AND THE IMPUGNED TRANSACTI ON OF JOB WORK HAS NOT BEEN DOUBTED BY THE LOWER AUTHORIT IES. THE AO REJECTED THE EXPLANATION FILED BY THE ASSESS EE WHICH WAS DULY SUBSTANTIATED BY THE ASSESSEE ON THE FOUN DATION OF FACT-SITUATION OF THE CASE AS BEING BONAFIDE EX PLANATION. FINDINGS OF THE LD. CIT(A) ARE NOT BASED ON PROPER APPRECIATION OF THE JURISPRUDENCE AND RATIONALE OF PROVISIONS OF SECTION 271(1)(C) OF THE ACT. HE HAS UPHELD THE LEVY OF PENALTY BY THE AO IN RESPECT OF MERE DISALLOWANCE OF PAYMENTS WHICH ARE GENUINE IN NATURE AND DULY DISC LOSED IN THE RETURN OF INCOME. CONSEQUENTLY THE IMPUGNED ORDER OF THE CIT(A) CANNOT BE SUSTAINED. IN VIEW OF THE ABOVE LEGAL AND FACTUAL DISCUSSIONS WE ARE OF THE CONSIDERED O PINION THAT PENALTY U/S 271(1)(C) OF THE ACT CANNOT BE LE VIED MERELY ON THE BASIS OF DISALLOWANCE MADE BY THE AO. IN THIS CASE THE ASSESSEE HAS NOT MADE A FALSE CLAIM OF PA YMENTS MADE TO GOLDSMITHS. HENCE THE ASSESSEE SUCCEEDS IN THIS GROUND OF APPEAL. 6. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 27 TH DEC. 2011. SD/- SD/- (H.L.KARWA) (MEHAR SINGH) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 27 TH DEC. 2011. POONAM COPY TO: THE APPELLANT THE RESPONDENT THE CIT(A) THE CIT DR ASSISTANT REGISTRAR ITAT CHANDIGARH