The ACIT, Circle-5,, Baroda v. Shri Vasant C.Soni, Baroda

ITA 1413/AHD/2006 | 2002-2003
Pronouncement Date: 26-02-2010 | Result: Allowed

Appeal Details

RSA Number 141320514 RSA 2006
Assessee PAN AJMPS8862K
Bench Ahmedabad
Appeal Number ITA 1413/AHD/2006
Duration Of Justice 3 year(s) 8 month(s) 26 day(s)
Appellant The ACIT, Circle-5,, Baroda
Respondent Shri Vasant C.Soni, Baroda
Appeal Type Income Tax Appeal
Pronouncement Date 26-02-2010
Appeal Filed By Department
Order Result Allowed
Bench Allotted B
Tribunal Order Date 26-02-2010
Date Of Final Hearing 23-02-2010
Next Hearing Date 23-02-2010
Assessment Year 2002-2003
Appeal Filed On 30-05-2006
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH AHMEDABAD (BEFORE S/ SHRI BHAVNESH SAINI JM AND A. N.PAHUJA AM) ITA NO.1413/AHD/2006 A. Y.: 2002-03 THE A. C. I.T. CIRCLE-5 BARODA VS SHRI VASANT C. SONI B/4 RAGHUNATH SOCIETY NR. NUTAN SAURABH HOSING SOCIETY OPP. VIJAY NAGAR HARNI ROAD BARODA PA NO. AJMPS 8862K (APPELLANT) (RESPONDENT) APPELLANT BY SMT. NEETA SHAH DR RESPONDENT BY NONE O R D E R PER BHAVNESH SAINI: THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF THE LEARNED CIT(A)-V BARODA D ATED 22-03-2006 FOR ASSESSMENT YEAR 2002-03 CHALLENGING THE CANCELLATIO N OF PENALTY U/S 271 (1) ( C ) OF THE IT ACT ON THE FOLLOWING GROUND S: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE THE LEARNED CIT(A) ERRED IN CANCELING THE PENALTY OF RS.16 34 000/- IMPOSED U/S 271 (1) ( C ) READ WITH EXPLANATION 1. 2. THE LEARNED CIT(A) FAILED TO TAKE NOTE OF THE DE CISION OF THE APEX COURT IN THE CASES OF B. A. BALSUBRAMANIAM AND BROTHERS CO. VS CIT (1999) 236 ITR 977 978 (SC ); CIT VS MUSSADILAL RAM BHAROSE (1987) 165 ITR 14 20 (SC); CIT VS K. R. SADYAPPAN (1990) 185 ITR 49 (SC) ; CIT (ADDL.) VS JEEVAN LAL SHAH (1994) 205 ITR 244 ( SC) AND K. P. MADHUSUDANA VS CIT (2001) 251 ITR 99 (SC) LAYING DOWN THAT AFTER THE OMISSION OF THE WORD DELIBERATELY IN SECTION 271 (1) ( C ) AND INSERTI ON OF THE EXPLANATION W. E .F. 01-04-1964 THE ONUS IN CASE O F ANY IN ITA NO.1413/AHD/06 SHRI VASANT C. SONI 2 ADDITION IS ON THE ASSESSEE TO PROVE THAT THE SAME DOES NOT INVOLVE CONCEALMENT. 3. THE LEARNED CIT(A) ERRED IN DELETING THE PENALTY ON THE GROUND THAT IT WAS A BEST JUDGEMENT ASSESSMENT IN WHICH THE INCOME WAS DETERMINED BY ESTIMATE WITHOU T APPRECIATING THAT EXPLANATION 1 TO SECTION 271 (2) ( C ) TAKES CARE OF SUCH SITUATION AS SETTLED IN THE CASE OF CIT VS T.J. MATHAI 269 492 (KER) AND CIT VS SMT. SHAKUNTALA DEVI 270 ITR 590 (RAJ). 2. WE HAVE HEARD THE LEARNED DR AND PERUSED THE FIN DINGS OF THE AUTHORITIES BELOW. HOWEVER NONE APPEARED ON BEHALF OF THE ASSESSEE DESPITE SERVICE OF THE NOTICE THROUGH REGISTERED PO ST. WE MAY ALSO NOTE THAT EARLIER THE LEARNED COUNSEL FOR THE ASSESSEE W AS APPEARING IN THIS CASE. BUT HE WITHDREW HIS POWER OF ATTORNEY ON BEHA LF OF THE ASSESSEE. IT WOULD THEREFORE SHOW THAT THE ASSESSEE IS NOT INT ERESTED IN DEFENDING THE APPEAL. THE ASSESSEE IS THEREFORE PROCEEDED E X-PARTE. 3. BRIEFLY THE FACTS OF THE CASE ARE THAT RETURN O F INCOME FOR THE ASSESSMENT YEAR UNDER APPEAL WAS FILED SHOWING TOTA L INCOME OF RS.7 90 149/-. THE ASSESSEE DID NOT COOPERATE WITH THE AO AND THE STATUTORY NOTICES REMAINED UN-COMPLIED FOR. THE AO NOTED THAT DESPITE GIVING SEVERAL OPPORTUNITIES THE ASSESSEE DID NOT P RODUCE REGULAR BOOKS OF ACCOUNTS AND DETAILS OF THE EXPENDITURE. THEREFO RE BOOK RESULTS COULD NOT BE VERIFIED AND THAT GENUINENESS OF THE EXPENDI TURE IN SEVERAL CRORES COULD NOT BE SUBJECTED TO VERIFICATION. THE AO ACCO RDINGLY APPLIED THE NP RATE OF 8% AND MADE THE ADDITION ACCORDINGLY BY PAS SING EX-PARTE ASSESSMENT ORDER U/S 144 OF THE ACT. PENALTY PROCEE DINGS WERE ALSO INITIATED U/S 271 (1) ( C ) OF THE IT ACT. IT WAS S UBMITTED AT THE PENALTY STAGE BEFORE THE AO THAT THE ASSESSEE HAS NOT RECEI VED ANY ASSESSMENT ORDER AND DID NOT FILE ANY REPLY BEFORE THE AO AT T HE PENALTY STAGE. THE AO ACCORDINGLY IMPOSED PENALTY VIDE SEPARATE ORDER. IN ITA NO.1413/AHD/06 SHRI VASANT C. SONI 3 4. IT WAS SUBMITTED BEFORE THE LEARNED CIT(A) THAT THERE IS NO MATERIAL ON RECORD TO INDICATE THAT THE ASSESSEE FURNISHED I NACCURATE PARTICULARS OF INCOME AND THAT THE LEARNED CIT(A) ON QUANTUM HA S REDUCED THE ADDITION. IT WAS THEREFORE PRAYED THAT ON ESTIMAT E OF INCOME PENALTY SHOULD NOT HAVE BEEN IMPOSED. THE LEARNED CIT(A) CO NSIDERING THE ABOVE FACT AND THE FACT THAT IT IS A CASE OF ESTIMATE OF INCOME ONLY DELETED THE PENALTY BY HOLDING THAT NO POSITIVE EVIDENCE HAS BE EN BROUGHT ON RECORD TO SHOW THAT THE ASSESSEE HAS DELIBERATELY CLAIMED EXCESS EXPENDITURE. PENALTY WAS ACCORDINGLY CANCELLED. 5. THE LEARNED DR REFERRED TO THE ASSESSMENT ORDER PASSED U/S 144 OF THE IT ACT AND SUBMITTED THAT THE ASSESSEE FAILED T O PRODUCE BOOKS OF ACCOUNTS BEFORE THE AO ON ANY OF THE DATE OF HEARIN G AND THAT THE ASSESSEE CLAIMED EXPENDITURE IN SEVERAL CRORES OF W HICH THE GENUINENESS OF THE SAME COULD NOT BE SUBJECTED TO VERIFICATION BECAUSE THE ASSESSEE DID NOT PRODUCE ANY DETAILS BEFORE THE AO. THE LEARNED DR SUBMITTED THAT SIMILAR IS THE POSITION BEFORE THE AO AT THE PENALT Y STAGE WHERE THE ASSESSEE HAS NOT EXPLAINED ANYTHING IN RESPONSE TO THE SHOW CAUSE NOTICE IN THE PENALTY MATTER. THE LEARNED DR THERE FORE SUBMITTED THAT THE LEARNED CIT(A) SHOULD NOT HAVE CANCELED THE PEN ALTY IN THE MATTER. 6. WE HAVE CONSIDERED THE SUBMISSIONS OF THE LEARNE D DR AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. IT IS AN ADMITTED FACT THAT THE ASSESSEE WAS SERVED WITH SEVERAL STATUTORY NOTICES AT THE STAGE OF THE ASSESSMENT BUT NEITHER THE ASSESSEE NOR HIS COUNSE L APPEARED ON HIS BEHALF BEFORE THE AO NOR SUBMITTED ANY DETAIL. THE ASSESSEE CLAIMED CARTING HIRING LABOUR CHARGES IN A SUM OF RS.4 83 888/- RS.2 67 901/- AND RS.1 18 44 448/-. SIMILARLY INTEREST WAS CLAIM ED IN A SUM OF RS.15 50 526/- AND TRAVELING EXPENDITURE OF RS.2 18 051/-. THE ASSESSEE DID NOT FILE ANY DETAILS. THEREFORE GENUINENESS OF THE EXPENDITURE COULD NOT BE SUBJECTED TO VERIFICATION. THE ASSESSEE ALSO DID NOT PRODUCE ANY IN ITA NO.1413/AHD/06 SHRI VASANT C. SONI 4 BOOKS OF ACCOUNT BEFORE THE AO AND NO SEPARATE EVID ENCE OR MATERIAL WAS PRODUCED TO PROVE THE GENUINENESS OF THE BOOK RESUL T. AT THE PENALTY STAGE ALSO THE ASSESSEE DID NOT FILE ANY REPLY BEFO RE THE AO TO EXPLAIN AS TO WHY PENALTY SHOULD NOT BE IMPOSED. THE ASSESSEE ONLY PLEADED THAT HE HAS NOT RECEIVED ANY ASSESSMENT ORDER. THE ABOVE FA CTS THEREFORE SHOW THAT THE ASSESSEE HAS BEEN MAKING NON-COMPLIANCE AT EVERY STAGE BEFORE THE AO. THE LEARNED DR ALSO FILED COPY OF THE ORDER OF THE TRIBUNAL IN THE CASE OF THE SAME ASSESSEE DATED 13-10-2009 IN ITA N O. 1162/AHD/2006 WHICH SHOWS THAT THE APPEAL OF THE ASSESSEE WAS ALS O DISMISSED IN DEFAULT OF THE ASSESSEE. THE ABOVE FACTS CLEARLY SH OW THAT THE ASSESSEE AT EVERY STAGE REMAINED NEGLIGENT AND DID NOT FILE ANY EXPLANATION TO EXPLAIN THE ISSUES. THE LEARNED CIT(A) INSTEAD OF GOING INTO THE MERITS OF THE CASE AND NON-COMPLIANCE BY THE ASSESSEE AT EVER Y STAGE HAS MERELY PRESUMED THAT SINCE IT IS A CASE OF ESTIMATE OF INC OME THEREFORE NO POSITIVE EVIDENCE HAS BEEN BROUGHT ON RECORD TO SHO W THAT THE ASSESSEE HAS DELIBERATELY CLAIMED EXCESS EXPENDITURE. THE FI NDINGS OF THE LEARNED CIT(A) ARE CONTRARY TO THE FINDINGS GIVEN BY THE AO IN THE EX-PARTE ASSESSMENT ORDER. THE AO HAS CLEARLY BROUGHT OUT FI NDINGS AGAINST THE ASSESSEE THAT THE ASSESSEE FAILED TO FILE ANY DETAI L TO PROVE GENUINENESS OF THE EXPENDITURE IN RS.1 50 00 000/- APPROXIMATELY WHICH IS VERY MAJOR AS AGAINST RETURNED INCOME FILED BY THE ASSESSEE. THE AO HAS THEREFORE BROUGHT POSITIVE EVIDENCE ON RECORD THAT THE ASSESSEE HAS D ELIBERATELY CLAIMED EXCESSIVE EXPENDITURE. WE THEREFORE DO NOT SUBSCR IBE TO THE VIEW OF THE LEARNED CIT(A) IN DELETING THE PENALTY. WE ACCORDIN GLY SET ASIDE THE ORDER OF THE LEARNED CIT(A) AND RESTORE THE APPEAL TO HIS FILE WITH DIRECTION TO RE-DECIDE THE APPEAL ON PENALTY BY GIVING REASONABL E SUFFICIENT OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AND THE AO. THE LEARNED CIT(A) SHALL GIVE SPECIFIC FINDING IN THE PENALTY O RDER CONSIDERING THE OBSERVATION OF THE AO IN THE ASSESSMENT ORDER. IN ITA NO.1413/AHD/06 SHRI VASANT C. SONI 5 7. AS A RESULT DEPARTMENTAL APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 26-02-2010 SD/- SD/- (A. N. PAHUJA) ACCOUNTANT MEMBER (BHAVNESH SAINI) JUDICIAL MEMBER DATE : 26-02-2010 LAKSHMIKANT/- COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT CONCERNED 4. THE CIT(A) CONCERNED 5. THE DR ITAT AHMEDABAD 6. GUARD FILE BY ORDER D Y. REGISTRAR ITAT AHMEDABAD