Income Tax Appellate Tribunal - Jaipur
Shri Rajendra Kumar Goyal, Jaipur vs Income Tax Officer, Ward-1-2, Ajmer on 18 August, 2020
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IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR
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BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM
vk;dj vihy la-@ITA No. 106/JP/2019
fu/kZkj.k o"kZ@Assessment Year :2010-11
Shri Rajendra Kumar Goyal, cuke ITO,
Prop. M/s Rajendra Trading Vs. Ward-1(2),
Company, Kesar Ganj, Ajmer Ajmer
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ACZPG2181R
vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrh dh vksj l@
s Assessee by : Sh. Mahendra Gargieya (Adv.) &
Sh. Devang Gargieya (ITP)
jktLo dh vksj ls@ Revenue by : Ms. Chanchal Meena (Addl. CIT)
lquokbZ dh rkjh[k@ Date of Hearing : 17/08/2020
mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 18/08/2020
vkns'k@ ORDER
PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. CIT(A), Ajmer dated 24.09.2018 wherein the assessee has taken the following grounds of appeal:-
"1. The impugned penalty order u/s 271(1)(c) of the Act dated 03.03.2017 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be quashed.
2. The ld. CIT(A) erred in law as well as on the facts of the case in confirming the order of AO dated 03.03.2017 imposing penalty u/s 271(1)(c) of the Act of Rs. 2,00,000/-. The penalty so imposed, being totally contrary to the provisions of law and facts, hence the same kindly be deleted in full.
2 ITA No. 106/JP/2019Sh. Rajendra Kumar Goyal, Ajmer vs. ITO, Ajmer
3. That the impugned show case notice issued u/s 274 r/w 271(1)(c) of the Act, is quite vague and did not at all specify under which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment particulars of income or furnishing of inaccurate particulars of income. The impugned penalty based on such a notice being contrary to the provisions of law & facts kindly be quashed."
2. At the outset, it is noted that there is a delay in filing the present appeal by 56 days. In this regard, the ld. AR submitted that there is no dispute that the order passed by the ld CIT(A) was duly served upon the assessee. Thereafter, the assessee handed over the same to his regular tax consultant Shri R. N. Agarwal, Advocate. Unfortunately, however, Shri Agrawal, though received the same but at that point of time remaining in a haste to attend a hearing, misplaced the papers somewhere and even thereafter forgot that any such order was ever received by him. That it is only sometime in the first week of January where the assessee reported a recovery pressure exerted by the department and when the matter was being discussed by the assessee with the Shri R. N. Agrawal, Advocate, this reminded him of the receipt of the CIT(A) order and also of the fact that further appeal was to be filed before the Hon'ble ITAT, however, by his oversight, could not be done and thereafter, immediate efforts were made to search out these papers, which fortunately could be located in his cabin itself. That thereafter, the papers were handed over to a different Counsel, who prepared the appeal. However, this entire exercise delayed the filing. Finally the appeal could be filed on 30.01.2019, with a delay of 56 days. That in support of the aforesaid facts, affidavit of the assessee is placed on record. That under these circumstances, it was submitted that firstly, there was no delay attributable on the part of the applicant assessee. In any case, these circumstances were beyond the control and anticipation of the humble applicant assessee. The delay occurred because of the misplacing of papers, as stated above and the poor assessee was helpless. It was further 3 ITA No. 106/JP/2019 Sh. Rajendra Kumar Goyal, Ajmer vs. ITO, Ajmer submitted that there was no willful attempt on the part of the assessee to cause delay nor did he has any vested interest in the delay more so where the matter in the quantum proceedings has been decided in his favour. The Hon'ble Supreme Court in a catena of judicial pronouncements including that of Collector Land Acquisition vs M. Katiji & Others has held that delay in filing an appeal may be condoned if there is sufficient cause for the delay. The Hon'ble Supreme Court has also held that a liberal view may be taken on this issue since the primary duty of the Courts is to dispense justice and not to dismiss appeals on mere technicalities. It was accordingly submitted that the prayer of the assessee for condonation of the delay may be accepted and appeal may be admitted for adjudication on merits.
3. Per contra, the ld DR opposed the prayer for condonation of delay so submitted by the assessee. It was submitted that the assessee has been very causal in his approach and should have taken necessary steps in terms of reaching out to his Counsel and in filing the present appeal in time which he failed to do so in the instant case. It was submitted that no sufficient cause has been submitted which calls for any indulgence by the Bench in condoning the delay so happened in filing the present appeal.
4. After hearing both the parties and perusing the material available on record, we find that the assessee has reasonably explained the reasons for the delay in filing the present appeal due to oversight on part of the Counsel of the assessee as submitted in his affidavit which is placed on record. Hence, the delay in filing the present appeal is hereby condoned and the appeal is admitted for adjudication.
5. Now, coming to the merits of the case. During the course of hearing, the ld. AR submitted that the assessee derives income from business of wholesale trading of vegetable oils, ghee, coconut and salt etc. in the name and style M/s 4 ITA No. 106/JP/2019 Sh. Rajendra Kumar Goyal, Ajmer vs. ITO, Ajmer Rajendra Trading Company, Ajmer. The assessee has filed ROI on 15.10.2010 declaring total income of Rs. 3,61,125/-. A Survey u/s 133A was conducted on 15.09.2009 on the business premises at Ajmer. During the course of survey the assessee offered for taxation the amounts of undisclosed income on account of Cash, Stock and undisclosed purchases, totaling to Rs. 6,30,626/-. But the same were not included by the assessee in its return of income. However, assessment was completed at total income of Rs. 9,91,750/-, by making trading additions of Rs. 18,566/-, the alleged investments in the unaccounted purchases of Rs. 5,50,000/- and other disallowances of Rs. 62,060/-. The ld. CIT(A) confirmed the additions made by the AO which on further appeal, the Tribunal has deleted the addition of Rs 5,50,000/- but confirmed the trading addition of Rs 18,566/-.
6. Our reference was drawn to the Tribunal's order dated 10.02.2020 in ITA No. 129/JP/2016 and it was submitted that he Tribunal in the quantum proceeding has rejected the approach of the lower authorities and restored the income as declared in the return of income and the relevant findings of the Tribunal reads as under:-
"10. The Co-ordinate Jaipur Bench of ITAT has already been taking this view in the case of ITO vs. Suresh Chandra Koolwal (2004) 32 TW 23 (Jp). Various Benches of the ITAT have taken similar view such as in the cases of R. K. Synthetics 30 TW 228 (Jd). Ashok Kumar Soni vs. DCIT (2001) 72 TTJ 323 (Jd), Karam Chand vs. ACIT (2000) 73 ITD 434 (Chd): (2000) 68 TTJ 789 (Chd) & Rishab Kumar Jain vs. ACIT (1999) 63 TTJ 236 (Del). In the case of Rajesh Jain vs. DCIT (2006) 100 TTJ 929 (Del), held that computation of undisclosed income solely on the basis of confessional statement of the assessee was not justified.
11. From a bare reading of the example given by ld. CIT(A), it is evidently clear that he has proceeded on the presumption that the entire 5 ITA No. 106/JP/2019 Sh. Rajendra Kumar Goyal, Ajmer vs. ITO, Ajmer purchases and entire sales were out of the books which is not the case here in as much as admittedly the shortage of stock was the result of the undisclosed sales only as stated above.
12. It is admittedly a case of recorded purchases wherein only profit of purchase and sales could be added. Accordingly, I direct the A.O to restrict addition only to the extent of profit on the alleged sales amounting to Rs. 18,566/-. I direct accordingly.
13. In the result, appeal of the assessee is allowed in part."
7. It was accordingly submitted that only basis of imposition of the penalty vide the impugned penalty order is the addition of Rs. 5,50,000/- being alleged unexplained investment made in the purchase of stock and which has since has been deleted by the Tribunal and the consequent penalty levied deserves to be deleted.
8. Per contra, the ld. DR submitted that the addition has been made by the AO pursuant to survey conducted by the Department and it is therefore, not a case of voluntarily disclosure by the assessee. It was further submitted that the Tribunal has recorded a categorical finding that it is a case of unrecorded sales which is clearly a case for levy of penalty. Given that in the quantum proceedings, the Tribunal has restricted the trading addition made by the AO to the extent of Rs 18,566/-, it was submitted that the matter may be set-aside to the file of the AO to recalculate the quantum of penalty so levied u/s 271(1)(c) of the Act.
9. We have heard the rival submissions and perused the material available on record. We find that the penalty has been levied on addition of Rs 5,50,000/-, being investment in unaccounted purchases made by the AO 6 ITA No. 106/JP/2019 Sh. Rajendra Kumar Goyal, Ajmer vs. ITO, Ajmer pursuant to survey conducted at the premises of the assessee. The Tribunal in the quantum proceedings has however held that it was not a case of unexplained investment/unaccounted purchases as wrongly understood by the authorities below and it was a case of suppressed sales made out of recorded purchases and in respect of undisclosed sales, only profit element can be added and the AO was accordingly directed to restrict the addition to the extent of Rs 18,566/-, being the profit element on unaccounted sales. Therefore, on perusal of the order passed by the Tribunal, we find that there is a clear finding recorded that it is a case of unrecorded sales which has not been disclosed by the assessee at the time of filing of return of income and we therefore agree with the contention of the ld DR that the penalty has been rightly levied in this case invoking provisions of section 271(1)(c) of the Act. We also donot agree with the contention of the ld AR that the Tribunal has restored the income as declared in the return of income in view of the clear finding of the Tribunal where the AO is directed to restrict the addition to the extent of profit of Rs 18,566/- on undisclosed sales. At the same time, where the very basis of levy of penalty, being the quantum addition, has been restricted by the Tribunal to Rs 18,566/- in the quantum proceedings, the consequent levy of penalty u/s 271(1)(c) shall also be required to be computed on the said amount of Rs 18,566/- as against the addition made by the AO.
10. No other arguments have been taken or canvassed during the hearing in support of ground no. 2, hence the same is dismissed.
11. In the result, the AO is directed to recompute the penalty u/s 271(1)(c) by taking the quantum addition of Rs 18,566/- as the basis for such levy as confirmed by the Tribunal in the quantum proceedings and the remaining penalty is hereby directed to be deleted.
The appeal is disposed off in light of aforesaid directions.
7 ITA No. 106/JP/2019Sh. Rajendra Kumar Goyal, Ajmer vs. ITO, Ajmer Order pronounced in the open Court on 18/08/2020.
Sd/- Sd/-
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(Vijay Pal Rao) (Vikram Singh Yadav)
U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member
Tk;iqj@Jaipur
fnukad@Dated:- 18/08/2020
*Ganesh Kr.
vkns'k dh izfrfyfi vxzfs 'kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- Shri Rajendra Kumar Goyal, Ajmer
2. izR;FkhZ@ The Respondent- ITO, Ward 1(2), Ajmer
3. vk;dj vk;qDr@ CIT
4. vk;dj vk;qDr@ CIT(A)
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur.
6. xkMZ QkbZy@ Guard File {ITA No. 106/JP/2019} vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar