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Income Tax Appellate Tribunal, CHANDIGARH BENCHES ‘A’, CHANDIGARH
Before: SHRI SANJAY GARG & Ms. ANNAPURNA GUPTA
Per Sanjay Garg, Judicial Member:
The captioned appeals have been preferred by the assessee against the separate orders dated 16.02.2016 of Commissioner of Income Tax (Appeals), [hereinafter referred to as ‘CIT(A)’]-2, Gurgaon. The assessee is aggrieved in both the appeals by the action of CIT(A) in confirming the levy of penalty u/s 271(1)(c) of the Income-tax Act, 1961 (in short 'the Act').
At the outset, Ld. Counsel for the assessee has submitted that assessee is a transporter. That in the case of the assessee for assessment year under considerations, additions have been made on estimating the GP
ITA Nos. 503 & 504/Chd/2016 Haryana Kashmir Transport Carriers, Yamunanagar 2
rate after rejecting the books of account of the assessee. He has further
submitted that identical additions were made by the Department for
assessment year 2006-07 also i.e. by estimating the GP rate, however, no
penalty proceedings were initiated by the Department for assessment year
2006-07. He has further submitted that so far as assessment year 2008-09
is concerned, the Assessing officer had made addition by way of estimating
the GP, however, no penalty proceeding were initiated. Subsequently, the
case was examined by the Ld. Commissioner of Income tax by exercising
his revisionary jurisdiction u/s 263 of the Act, in consequence of which,
addition to the income of the assessee on account of insurance claim was
made. The Ld. Assessing officer has levied the penalty in respect of the
addition made by the him in respect of insurance claim. He has further
submitted that so far as assessment year 2011-12 is concerned, penalty has
been levied for the first time by the Department in respect of additions
made on account of estimation of GP profit. The Ld. Counsel has submitted
that for the assessment years i.e. assessment year 2008-09 & assessment
year 2011-12, there was neither a case of furnishing of inaccurate
particulars of income nor of concealment of income.
The Ld. DR, on the other hand, has relied on the findings of the
lower authorities.
We have heard the rival submissions. Admittedly, the addition for
assessment year 2008-09 was made on account of insurance claim received
by the assessee. Ld. Counsel for the assessee has submitted that even the
issue of making addition into the income of the assessee on account of
insurance calm is a debatable issue. He has further relied upon the
ITA Nos. 503 & 504/Chd/2016 Haryana Kashmir Transport Carriers, Yamunanagar 3
decision of the Hon'ble Jurisdictional High Court of Punjab & Haryana
High Court in the case of ,CIT Vs. Sangrur Vanaspati Mills Ltd’ (2008) (2)
TMI 285 (P&H) in this respect.
At this stage, a Court query was put to the Ld. counsel, as to if the
books of account of the assessee were rejected in the earlier assessment
year also and further the income was estimated on GP rate, why did not
the assessee take necessary steps to maintain the proper accounts and
remove the discrepancy because of which the books of account were
rejected. Ld. counsel in this respect has submitted that for assessment year
2006-07, the order of the Tribunal upholding the addition on estimation
basis had been passed on 27.4.2011, whereas, the return for assessment
year 2008-09 had filed by the assessee on 29.9.2008. So far as the
assessment year 2011-12 is concerned, the Ld. Counsel has submitted that
the financial year was already over on 30.4.2011 and the accounts had
already been finalized, and the assessee was under the bona fide belief that
the books of account maintained by it would be accepted as such by the
Assessing officer. The Ld. Counsel has further submitted that even
subsequent to assessment year 2011-12, no such additions have been made
by the income tax authorities into the income of the assessee.
Considering the submissions of the Ld. Counsel for the assessee and
overall facts and circumstances of the case, we do not find that this is a
case of furnishing of inaccurate particulars of income or concealment of
income on the part of the assessee. Therefore, the penalty levied by the
lower authorities u/s 271(1)(c) of the Act for the assessment years under
ITA Nos. 503 & 504/Chd/2016 Haryana Kashmir Transport Carriers, Yamunanagar
consideration, in our view, is not sustainable in the eyes of law; the same
is accordingly ordered to be deleted.
In the result, both the appeals of the assessee are hereby allowed.
Order pronounced in the Open Court on 26.03.2018
Sd/- Sd/- (ANNAPURNA GUPTA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated : 26.03.2018 Rkk Copy to: 1. The Appellant 2. The Respondent 3. The CIT 4. The CIT(A) 5. The DR