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Income Tax Appellate Tribunal, CUTTACK BENCH, CUTTACK
Before: SHRI CHANDRA MOHAN GARG
These appeals are filed by the assessee against the separate
orders of the Commissioner of Income Tax(Appeals)-2,
Bhubaneswar dated 30.4.2019 confirming the penalty
u/s.271(1)(c) of the Act and order dated 29.4.2019 confirming the
penalty 271A and 271F of the Act for the assessment year 2013-
14.
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ITA No.125/CTK/2019:
The grievance in this appeal is that the CIT(A) is not
justified in confirming the penalty of Rs.2,19,415/- imposed
u/s.271(1)(c) of the Act.
The facts of the case are that on verification of the bank
account, the Assessing Officer noted that there are credits of
Rs.73,13,808/- in the bank account of the assessee, which
includes cash deposits of Rs.19,17,000/- As there was no
compliance during the assessment proceedings, the Assessing
Officer computed income of the assessee at Rs.14,62,762/- being
@ 20% of the gross turnover of Rs.73,13,808/-. On appeal, the
CIT(A) reduced the computation of income to 10% being
Rs.7,31,880/- as against 20% computed by the Assessing Officer.
Therefore, the Assessing Officer levied penalty of
Rs.4,38,830/- holding that total income assessed of
Rs.14,62,760/- is the concealed income of the assessee.
On appeal, the CIT(A) directed the Assessing Officer to
reduce the quantum of penalty by taking concealed income of
Rs.7,31,880/- determined by the CIT(A) in quantum proceedings.
Still further, the assessee is in appeal before the Tribunal.
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Having heard the rival submissions, I observe that there
were deposits of Rs.73,13,808/-m in HDFC bank accounts and the
assessee did not file the details before the Assessing Officer
despite various opportunities given. It was in this backdrop that
the authorities below were of the opinion that the assessee has
concealed the particulars of its income. However, the CIT(A) felt
that the estimation of income is unreasonable and, accordingly,
reduced the same to 10% and confirmed the addition of
Rs.7,31,880/-.
From the above, it is clear that the assessee has concealed
the particulars of income because the assessee did not file return
of income and also did not file the details as called for by the
Assessing officer. Accordingly, I concur with the findings of the
lower authorities and confirm the levy of penalty of Rs.2,19,415/-
and dismiss the ground of appeal of the assessee. Consequently,
the appeal is dismissed.
ITA No.126/CTZK/2019
The grievance of the assessee is that the CIT(A) is not
justified in confirming the penalty of Rs.25,000/- levied u/s.271A
of the Act for non-maintenance of books of account.
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Ld A.R. of the assessee submitted that due to serious
dispute between the partners, the assessee could not maintain the
books of account.
I have heard the rival submissions and perused the
materials available on record of the Tribunal. The undisputed
facts of the case are that the Assessing Officer observed that the
assessee failed to keep and maintain books of account as per
provisions of section 44AA of the Income tax Act, 1961 and,
therefore, he levied penalty of R.25,000/- u/s.271A of the Act for
non-maintenance of books of account in violation of section 44AA
of the Act, which was confirmed in first appeal.
Section 273B provides as under:
“"273B. Notwithstanding anything contained in the provisions of clause (b) of subsection (1) of section 271, section 271A, section 271B, section 271BB, section 271C, section 271D, section 271E, clause (c) or clause (d) of sub section (1) or subsection (2) of section 272A, subsection of section 272AA or subsection (1) of section 272BB or clause (b) of subsection (1) or clause (b) or clause (c) of subsection (2) of section 273, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provisions if he proves that there was reasonable cause for the said failure."
The above section provides that if the assessee proves that
there is a reasonable cause, he is not subject to levy of penalty.
The case of the assessee is that due to serious dispute among the
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partners, the assessee could not maintain books of account.
However, it is the contention of the Assessing Officer that the
assessee derives income from retail trading in tyres, batteries,
lubricants and motor accessories alongwith doing four wheeler
alignment works and the turnover was more than Rs.73,00,000/-.
Had there been any dispute among the partners, it was not
possible to achieve a turnover more than Rs.73,00,000/- and the
closure of business. I find that the assessee has shown a
reasonable cause that due to disturbance among the partners, the
books of account were not maintained. Hence, I am of the view
that in view of provisions of section 273B of the Act, no penalty
shall be imposable and allow the ground of appeal of the
assessee. Consequently, the appeal of the assessee is allowed.
ITA No.127/CTK/2019
In this appeal, the assessee agitated the confirmation of
penalty of Rs.5000/- levied u/s.271F of the Act.
I have the rival submissions and perused the record of the
case.
The Assessing Officer has levied penalty u/s.271F of the Act
on the ground that the assessee has failed to furnish return of
income on or before 31.3.2014 without a reasonable cause. I find
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that Section 271F of the Act provides that “If a person who is
required to furnish a return of his income, as required under sub-
section (1) of section 139 or by the provisions to that sub-section,
fails to furnish such return before the end of the relevant
assessment year, the Assessing Officer may direct that such
person shall pay, by way of penalty, a sum of five thousand
rupees.”
The disturbance caused among the partners steps
compelled to closure of the business could not constitute a valid
ground for the delay in furnishing the return of income, as income
from the said concern, a partnership firm, if any, is exempt under
s. 10(2A) of the Act. In other words, the assessee could well have
filed his return of income, clearly stating that the income from the
partnership firm, if any, is tax exempt, is not being disclosed,
being indeterminate, if indeed so at the relevant date. I am of the
view that the assessee has not been able to show any reasonable
cause(s) for not furnishing the return of income by 31st March,
2004 and, thus, the levy is not saved by s. 273B. As such, the
impugned default can only be considered as a conscious disregard
of one’s statutory obligations, and therefore, the penalty levied by
the Assessing Officer is confirmed.
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In the result, appeal filed by the assessee is dismissed.
Order pronounced on 16/05/2019. Sd/- (Chandra Mohan Garg) JUDICIALMEMBER Cuttack; Dated 16/05/209 B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellant : Express Wheels, House No.3, Rashmi Garden, Chandrasekharpur, Bhubaneswar
The Respondent. ITO, ward 5(4), Bhubaneswar 3. The CIT(A)-2, Bhubaneswar 4. Pr.CIT- 2, Bhubaneswar 5. DR, ITAT, Cuttack 6. Guard file. //True Copy//
By order
Sr. Pvt. Secretary, ITAT, Cuttack
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