Ranjita Jena, Angul v. ACIT, Central Circle,Cuttack, Cuttack

ITSSA 15/CTK/2019 | 2010-2011
Pronouncement Date: 11-03-2021 | Result: Allowed
Expert Summary: In the given case, the assessee was running and managing a nursing home. A search and seizure u/s 132 was conducted on the premises of the assessee resulting in the assessee being framed on the assessee by the AO u/s 143(3) for A.Y 2016-17. During the assessment proceedings, on perusal of the documents found during the search and seizure the AO found that the assessee has filed return u/s 139(1) for A.Y 11-12 and later in the response of notice u/s 153. Also, no books of accounts u/s 44AA were maintained by the assessee although her main source of income was from the medical profession even when she doesn’t have any professional degree. Keeping the above grounds as the basis the AO made certain additions in the assessee’s total income and also levied penalty under Sec.271 for non-maintenance of books were compulsorily required u/s 44AA. Aggrieved by this, the assessee sought for an appeal to CIT(A) on the grounds that the assessee is covered u/s 44AD and so not required to maintain books and no notice u/s 139(9) was given by AO for levying penalty so no addition can be made. But CIT(A) upheld the AO’s order quashing the grounds of appeal by the assessee. In second Appeal Proceedings the tribunal held that AO has not accepted the returned income of the assessee while calculating the taxable income of the assessee. Therefore, no need to issue defect notice by the AO u/s.139(9)(f) of the Act before initiating penalty u/s.271A of the Act and the assessee could not produce any accounts which were required to be maintained by the assessee for earning the impugned income from the operation of the nursing home. It is not necessary that the proprietor of the institution must have a qualified degree. Hence the tribunal decided in the favor of the revenue and the appeal of the assessee was dismissed.

Appeal Details

RSA Number 1522116 RSA 2019
Assessee PAN ACVPJ3787A
Bench Cuttack
Appeal Number ITSSA 15/CTK/2019
Duration Of Justice 1 year(s) 11 month(s) 29 day(s)
Appellant Ranjita Jena, Angul
Respondent ACIT, Central Circle,Cuttack, Cuttack
Appeal Type Income Tax (Search & Seizure) Appeal
Pronouncement Date 11-03-2021
Appeal Filed By Assessee
Tags 40(a)(ia0
Order Result Allowed
Bench Allotted DB
Tribunal Order Date 11-03-2021
Last Hearing Date 24-03-2020
First Hearing Date 08-03-2021
Assessment Year 2010-2011
Appeal Filed On 12-03-2019
Judgment Text
P A G E 1 | 5 IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK BENCH CUTTACK BEFORE S/ SHRI C HANDRA MOHAN GARG JUDICIAL MEMBER AND LAXMI PRASAD SAHU ACCOUNTANT MEMBER IT (SS) A NO . 15 /CTK/201 9 ASSESSMENT YEAR : 2010 - 2011 RANJITA JENA AT - SMALAPADA TALACHER ANGUL. VS. ACIT CENTRAL CIRCLE CUTTACK PAN/GIR NO. ACVPJ 3787 A (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI J.M.PATNAIK AR REVENUE BY : SHRI M.K.GAUTAM CIT DR DATE OF HEARING : 8 / 3 / 20 2 1 DATE OF PRONOUNCEMENT : 11 / 3 /20 2 1 O R D E R PER BENCH THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT(A) - 2 BHUBANESWAR DATED 19.12.2018 FOR THE ASSESSMENT YEAR 2010 - 2011 . 2. THE ONLY GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS THAT THE LD CIT(A) IS NOT JUSTIFIED IN PARTLY CONFIRMING THE ADDITION OF RS.7 85 200/ - DUE TO NON - DEDUCTION OF T DS U/S.40(A)(IA) OF THE ACT EVEN THE RECIPIENTS ARE THE EXISTING INCOME TAX ASSESSEES ASS ESSED BY THE DEPARTMENT ON THE SAID AMOUNT. IT(SS)A NO.15 /CTK/2019 ASSESSMENT YEAR : 2010 - 2011 P A G E 2 | 5 3. FACTS IN BRIEF ARE THAT THE ASSESSEE IS IN NURSING HOME BUSINESS AT TALCHER ODISHA AND SUBJECTED TO SEARCH U/S.132 OF THE ACT ON 3.9.2015 IN HER BUSINESS PREMISES AND RESIDENCE. DURING THE COURSE OF SEARCH OPERATION SOME ALLEGED INCREMENTAL DOCUMENTS WERE SEIZED AS UNDER: J & J - 7 & 8 - INCOME FROM OPERATION. J&J - 1 & 3 - INCOME FROM OPD. J & J - 9 & 10 INCOME FROM ULTRA SOUND J & J - 4 - INCOME FROM ABORATION DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE HAS FURNISHED THE DETAILS OF DOCTORS TO WHOM FEES WERE PAID DURING THE YEAR AS UNDER: NAMES FEES PAID PAN NUMBER DR. SUKLAMBAR PANDA RS. 2 80 000/ - AFQPP5683M (ITO WARD ANGUL) DR. SUREKHA MOHAPATRA RS. 2 50 000/ - ADDPM0836G (ITO WARD DHENKANAL) DR. SUNIT KUMAR MISHRA RS. 2 55 200/ - ABLPM3849F (ITO WARD DHENKANAL) DR SUBASH CH JENA RS. 3 25 000/ - ABRPJ2247E (ITO 3(5) BBSR) TOTAL: 11 10 200/ - THE ASSESSING OFFICER REQUIRED THE ASSESSEE TO FURNISH EVIDENCE IN SUPPORT OF DEDUCTION AND DEPOSIT IN GOVERNMENT ACCOUNT OF TAX AT SOURCE ON SUCH PAYMENT. HOWEVER THE ASSESSEE FAILED TO FURNISH ANY SUCH EVIDENCE. ACCORDINGLY THE ASSESSING OFFICER OBSERVED THAT AS PE R THE PROVISIONS OF SECTION 194J OF THE ACT IF AN INDIVIDUAL WHOSE GROSS RECEIPTS EXCEED THE IT(SS)A NO.15 /CTK/2019 ASSESSMENT YEAR : 2010 - 2011 P A G E 3 | 5 MINIMUM AMOUNT FOR WHICH ACCOUNTS ARE REQUIRED TO BE AUDITED U/S.44AB HE OR SHE IS REQUIRED TO DEDUCT AND DEPOSIT6 TAX AT SOURCE ON PAYMENT OF PROFESSIONAL FEES EXCEEDING RS.30 000/ - IN A YEAR. SINCE THE ASSESSEE FAILED TO DO SO THE ASSESSING OFFICER DISALLOWED THE SAME U/S.40(A)(IA) OF THE ACT AND COMPLETED THE ASSESSMENT U/S. 153 A OF THE I.T. ACT ON 29/12/2017 BY DETERMINING THE TOTAL INCOME AT RS. 50 06 180/ - AS AGAINST THE DISCLOSED INCOME AT RS. 7 18 072/ - THEREBY MAKING ADDITION OF RS. 42 88 108/ - INCLUDING ADDITION OF RS.11 10 200/ - U./S .40(A)(IA) OF THE ACT. 4. THE ASSESSEE HAS PREFERRED APPEAL AGAINST ADDITION OF RS.11 10 200/ - BEFORE THE L D CIT(A). THE CIT(A) FOUND THAT THE ASSESSMENT IN THE CASE OF DR. SUBHAS CHANDRA JENA HAS BEEN COMPLETED U/S.153A OF THE ACT AND NO ADVERSE FINDING OF NON - DISCLOSURE OF RS.3 25 000/ - PAID BY THE ASSESSEE HAS COME TO THE NOTICE. THEREFORE THE LD CIT(A) DELETED THE ADDITION OF RS.3 25 000/ - . HOWEVER IN RESPECT OF BALANCE AMOUNT OF RS. 7 85 200/ - SINCE THE ASSESSEE DID NOT FILE ANY EVIDENCE TO SUBSTANTIATE THE CLAIM THE LD CIT(A) CONFIRMED THE SAME. 5. BEFORE US LD A.R. OF THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS SUBMITTED ALL RELEVANT DETAILS OF FOUR PAYEES I.E. DR. SUBAS CHANDRA JENA DR. SUKLAMBAR PANDA DR SUREKHA MOHAPATRA AND DR SUNITA KUMAR MISHRA BEFORE THE AO AS WELL AS LD CIT(A) INCLUDING THEIR PAN NOS. COPIES OF RESPECTIVE INCOME TAX RETURNS WHEREIN THEY HAVE OFFERED THE IMPUGNED AMOUNT AS INCOME FOR TAXATION. LD COUNSEL FURTHER SUBMITTED THAT IT(SS)A NO.15 /CTK/2019 ASSESSMENT YEAR : 2010 - 2011 P A G E 4 | 5 HOWEVER LD CIT(A) IN PARAS 4.1 4.2 & 4.3 OF HIS ORDER ONLY ACCEPTED THE PAYMENT MADE TO SHR I SUBHAS CHANDRA JENA AMOUNTING TO RS.3 25 000/ - AND REMAINING AMOUNT OF RS.7 85 200/ - WHICH PERTAINED TO OTHER THREE DOCTORS HAVE BEEN CONFIRMED U/S.40(A)(IA) OF THE ACT. LD COUNSEL SUBMITTED THAT WHEN THE ASSESSEE HAS SUBMITTED ALL RELEVANT DETAILS OF T HE RECIPIENTS OF AMOUNT INCLUDING THEIR PAN NOS COPIES OF INCOME TAX RETURNS AND OFFERED THE INCOME FOR TAXATION THEREFORE NO ADDITION IS CALLED FOR IN THE HANDS OF THE ASSESSEE IN THIS REGARD. 6. REPLYING TO ABOVE LD CIT DR STRONGLY SUPPORTED THE ORD ER OF THE LD CIT(A). HOWEVER IN ALL FAIRNESS LD CIT DR SUBMITTED THAT THE DEPARTMENT HAS NO SERIOUS OBJECTION IF THE ISSUE IS RESTORED TO THE FILE OF THE AO FOR VERIFICATION AS TO WHETHER THE RESPECTIVE RECIPIENTS OF THE AMOUNT HAVE OFFERED THE INCOME FOR TAXATION IN THEIR RESPECTIVE INCOME TAX RETURNS. 7. ON CAREFUL CONSIDERATION OF THE RIVAL SUBMISSIONS AND KEEPING IN VIEW THE ORDER OF THE FIRST APPELLATE ORDER ESPECIALLY IN PARAS 4.1 4.2 & 4.3 WE FIND THAT THE LD CIT(A) HAS ALLOWED PAYMENT OF RS. 3 25 000/ - PAID TO DR. SUBHASH CHANDRA JENA AND DELETED THE SAME. LD CIT(A) FURTHER NOTED THAT WITH REGARD TO OTHER THREE DOCTORS THE APPELLANT HAS NOT FILED ANY EVIDENCE THAT THEY HAVE DISCLOSED THE AMOUNTS PAID BY THE ASSESSEE IN THEIR RESPECTIVE RET URNS FOR TAXATION AND TAXES HAVE BEEN PAID THEREON. IN VIEW OF THIS FINDING RECORDED BY LD IT(A) AND SUBMISSION OF LD CIT DR WE ARE OF THE CONSIDERED OPINION THAT TO M EET ENDS OF JUSTICE THE ISSUE IS REQUIRED TO IT(SS)A NO.15 /CTK/2019 ASSESSMENT YEAR : 2010 - 2011 P A G E 5 | 5 RESTORED TO THE FILE OF THE AO FOR EXAMINATION AND VERIFICATION AS TO WHETHER THE RESPECTIVE DOCTORS HAVE OFFERED THE INCOME RECEIVED FROM THE ASSESSEE IN THEIR RETURN OF INCOME FOR TAXATION. IF AFTER VERIFICATION THE AO FINDS THAT THE INCOME RECEIVED BY THE RESPECTIVE DOCTORS HAVE BEEN OFFERED FOR TAXATION AND SAME HAVE BEEN DEPOSITED IN GOVERNMENT EXCHEQUER THEN HE IS DIRECTED TO DELETE THE ADDITION . WITH THESE OBSERVATIONS THE ISSUE IS RESTORED TO THE FILE OF THE AO. 8. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED ON 11 / 3 /20 2 1 . S D/ - SD/ - ( LAXMI PRASAD SAHU ) ( CHANDRA MOHAN GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER CUTTACK; DATED 11 / 3 /20 2 1 B.K.PARIDA SPS (OS) COPY OF THE ORDER FORWARDED TO : BY ORDER SR . PVT. S ECRETARY ITAT CUTTACK 1. THE APPELLANT : RANJITA JENA AT - SMALAPADA TALACHER ANGUL. 2. THE RESPONDENT. ACIT CENTRAL CIRCLE CUTTACK 3. THE CIT(A) - 2 BHUBANESWAR 4. PR.CIT - 2 BHUBANESWAR 5. DR ITAT CUTTACK 6. GUARD FILE. //TRUE COPY//