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Income Tax Appellate Tribunal, CHANDIGARH
Before: Sh. SANJAY GARG
आदेश/ORDER
The present appeal has been preferred by the assessee against the order dated 16.05.2018 of the Commissioner of Income Tax (Appeals)-I, Ludhiana [hereinafter referred to as CIT(A)] agitating the confirmation of the penalty levied by the AO u/s 271(1)(c) of the Income Tax Act, 1961 ( in short 'the Act').
The brief facts relating to the issue are that the assessee is in the business of civil contractor. The assessee filed its return of income u/s 139(1) of the Act declaring gross profit rate @ 8%, however since the assessee could not produce certain bills and vouchers when demanded by the AO, the AO rejected the books of Accounts and estimated the gross profit rate @ 12%. Being aggrieved by the above order of the AO, the assessee preferred appeal before the CIT(A).
ITA-1006/CHD/2018 Page 2 of 3
The ld. CIT(A) considering the overall facts and
circumstances of the case and after hearing the ld.
Representative of the assessee restricted the estimation of
gross profit @ 10% of the turnover. In the meantime, the AO
initiated penalty proceedings u/s 271(1)(c) of the Act and
levied the impugned penalty of Rs. 1,35,586/- in respect of
the addition confirmed by the ld. CIT(A). The assessee
unsuccessfully contested the aforesaid levy of penalty before
the CIT(A).
Before us, ld. counsel for the assessee has submitted
that there was no act on the part of the assessee of
concealment of particulars of income or furnishing of
inaccurate particulars of income. That since the assessee
was a Civil Contractor and most of the payments were made
to small contractors/parties, hence those parties did not
issue bills and vouchers and hence the assessee could not
produce the said bills and vouchers. However, there was no
fact on the file that the assessee had furnished inaccurate
particulars of income or had concealed his income. That the
aforesaid disallowance and consequently addition was made
on estimation basis because of certain lack of evidence,
however any fact on the file or explanation given by the
assessee has not been disproved by the AO.
The ld. DR on the other hand, has relied upon findings
of the lower authorities and has submitted that the penalty
has rightly been levied in this case.
After considering the rival submissions, this Bench is of
the view that this is not a fit case for levy of penalty u/s
ITA-1006/CHD/2018 Page 3 of 3
271(1)(c) of the Act. The lower authorities have not proved or
established on the file any fact which can be said to be an act
on the part of the assessee to conceal his income or of
furnishing of inaccurate particulars of income. The
estimated addition in this case has been made by the lower
authorities on account of failure of the assessee to furnish
certain documents regarding which one assessee has given
explanation also. However, it has not been proved on file
that any fact, submission or evidence furnished by the
assessee was false or inaccurate inviting penal action under
the provisions of Section 271(1)(c) of the Act.
In view of this, the penalty levied in this case is set
aside. The appeal of the assessee is hereby allowed.
Order pronounced in the Open Court.
Sd/- ( संजय गग� ) (SANJAY GARG) �या�यक सद�य/ Judicial Member
Dated: 21.01. 2019 “Poonam” आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : अपीलाथ�/ The Appellant 1. ��यथ�/ The Respondent 2. आयकर आयु�त/ CIT 3. आयकर आयु�त (अपील)/ The CIT(A) 4. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 5. गाड� फाईल/ Guard File 6.
आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar