Income Tax Appellate Tribunal - Ahmedabad
Dr.Mukesh Bansal, Ahmedabad vs Assessee on 12 October, 2012
IN THE INCOME TAX APPELLATE TRIBUNAL,
" D " BENCH, AHMEDABAD
Before Shri G. C. GUPTA, HON'BLEVICE PRESIDENT
and Shri A. K. GARODIA, ACCOUNTANT MEMBER
I.T.A. No. 400-404/ Ahd/2012
(Assessment year 2003-04 TO 2007-08)
Dr. Mukesh Bansal, Vs. ACIT, Central Circle 2(3),
23, Hatkesh Society, Ahmedabad
Darpan 5 Roads, Navrangpura,
Ahmedabad 380009
PAN/GIR No. : AAXPB5858N
(APPELLANT) .. (RESPONDENT)
Appellant by: Shri M K Patel, AR
Respondent by: Shri D P Gupta, CIT DR
Date of hearing: 12.10.2012
Date of pronouncement: 31.10.2012
ORDER
PER SHRI A. K. GARODIA, AM:-
All these appeals are filed by the assessee which are directed against combined order of Ld. CIT(A) III, Ahmedabad dated 24.07.2012 for the assessment years 2003-04 to 2007-08.
2. Since only one identical issue is involved in all the 5 years, all these appeals were heard together and are being disposed off by way of this common order.
3. The only grievance of the assessee in all the 5 years is regarding penalty confirmed by Ld. CIT(A) which was imposed by the A.O. u/s 271A of Rs.25,000/- in each year.
2 I.T.A.No.400-404 /Ahd/20124. The brief facts of the case till the state of imposition of penalty are noted by Ld . CIT(A) in para 2 of his order which is reproduced below:
"2. The brief facts of the case are that in pursuant to search and seizure action, the assessment u/s. 153A was completed in these cases on 31/12/2010. During the course of assessment proceedings it was noticed by the AO that the appellant was not maintaining any books of accounts as prescribed u/s. 44AA of the I.T. Act. He accordingly initiated, penalty proceedings u/s. 271A of the I.T. /Vet for non-maintenance of books of accounts. In response to the show cause notice the appellant stated before the A.O. as under:
"The assessee's main source of income is from Salary from Brij Basant Hospital (P) Ltd. In case of Brij Basant (P) Ltd complete books of accounts as prescribed u/s. 44A A has been maintained. Even the accounts are audited in that case. In case of assessee in question meager income from profession is derived. In the circumstance there is no default on the part of the assessee and hence it is requested 'that the penalty proceeding may kindly be dropped."
Before the AO it was contended by the appellant vide his letter dated 21/11/2010 that the appellant is not maintaining any books of accounts and therefore the details called for by the AO u/s. 142(1) of the I.T. Act cannot be furnished. The AO therefore levied penalty of Rs.25,000/- each u/s. 271(1 )(c) for all the assessment years. Against the levy of penalty the appellant has filed the present appeal. Since the issue is common in all the appeals, for the sake of convenience all the appeals are disposed off by common order."
5. Being aggrieved, the assessee carried the matter in appeal before Ld. CIT(A) but without success and now, the assessee is in further appeal before us.
6. Ld. A.R. submitted that this issue is covered in favour of the assessee by the judgement of Hon'ble Gujarat High Court rendered in the case of CIT Vs Tea King as reported in 123 Taxman 162 (Guj.). He also submitted that otherwise also, penalty should not be imposed in all the 3 I.T.A.No.400-404 /Ahd/2012 years because it is a continuous default and hence, if default could have been pointed out by the A.O. in the 1st year itself, the same could not have been repeated in the subsequent years and, therefore, the penalty should be deleted at least in the subsequent four years even if it is confirmed in the 1st year i.e. assessment year 2003-04. Ld. D.R. supported the orders of authorities below.
7. We have considered the rival submissions, perused the material on record and have gone through the orders of authorities below and the judgement cited by the Ld. A.R. of the assessee. We find that it is noted by the A.O. in para 3 of the assessments order for the assessment year 2003-04 that the assessee is a doctor by profession and receives salary from Brij Basant Hospital Pvt. Ltd. and also having income from business and profession apart form income from other sources. Thereafter, he has noted that the assessee is a medical practitioner but she is not maintaining books of accounts as required u/s 44AA of the Income tax Act, 1961. For this violation of Section 44AA, penalty was imposed u/s 271A of the Act. We find that Ld. CIT(A) has confirmed the penalty by following the judgement of Hon'ble Gujarat High Court rendered in the case of Godiji Parswanathji Jain Derasar Vs CIT as reported in 226 ITR 798(Guj.). He also noted that this judgement of Hon'ble Gujarat High court is in connection with the penalty imposed by the A.O. u/s 271(i)(a) of the Income tax Act, 1961 for late filing of return by a public charitable trust but the ratio of this judgement is applicable in the present case also. We are of the considered opinion that penalty in the 1st year i.e. y 2003-04 has to be upheld because for this year, the assessee could not show any reasonable cause for not maintaining books of accounts as required u/s 4 I.T.A.No.400-404 /Ahd/2012 44AA of the Income tax Act, 1961. The judgement cited by the Ld. A.R. rendered in the case of CIT vs Tea King (supra) is of no help in the present case because the facts are different. In that case, penalty in dispute was imposed by the A.O. u/s 271B read with section 44AB of the Income tax Act, 1961 and the penalty was deleted in that case on this basis that when the penalty is confirmed for the assessment year 1985-86, the penalty cannot be confirmed for the subsequent years because without the opening balance, books cannot be maintained and audited in the subsequent years. In the present case, the penalty in dispute is regarding non maintenance of books of accounts as per the requirement u/s 44AA of the IT Act and hence, it cannot be said that books cannot be maintained in this year and it is a reasonable cause for non maintaining the books of accounts. We, therefore, confirm the penalty for the 1st year i.e. assessment year 2003-04.
8. Regarding the remaining years i.e. assessment year 2004-05 to 2007-08, we are of the considered opinion that since penalty is imposed in the 1st year, for the continuous default in the subsequent years, penalty should not be imposed and it should be accepted as reasonable cause in the subsequent yeas for non maintaining of books because for non maintenance of books of accounts for the 1st year i.e. assessment year 2003-04, the A.O. initiated the penalty proceedings on 31.12.2010 that too after the search conducted in the case of the assessee and assessment u/s 153A read with Section 143(3) of the Act was completed in all these 5 years on 31.12.2010. If the A.O. would have initiated penalty proceedings for assessment year 2003-04 itself, the default could not have been continued in the succeeding years. We have to decide this issue in 5 I.T.A.No.400-404 /Ahd/2012 the present case after considering complete facts of this case. It is noted in the present case that the assessee was having income form salary form Brij Basant Hospital Pvt. Ltd. Apart from this salary income, the assessee was having very small professional income and hence, there is force in the contention of the Ld. A.R. that the assessee was not aware about the requirement of Section 44AA of the Income tax Act, 1961 and hence, if it would have been pointed out by the A.O. in the very first year, the assessee would have maintained the accounts in the subsequent years and hence this penalty in subsequent years is not justified although it is confirmed in the 1st year. In our considered opinion, this constitutes reasonable cause as per the provision of Section 273B of the Income tax Act, 1961 because the assessee in the present case is having income other than from salary, very small professional income and, therefore, it has to be accepted that the assessee was medical practitioner and was not having any assistance from any professional. Under these facts, it is very much possible that the assessee was not aware about the requirements of Section 44AA of the Income tax Act, 1961 and he did not maintain the books of accounts and therefore, if this failure of the assessee could have been pointed out to the assessee after expiry of first year itself, the assessee would have maintained the required books of accounts in the subsequent years and hence, in the subsequent years, it has to be accepted that there was reasonable cause for non maintenance of the books of accounts in the facts of the present case and hence, we hold that penalty in the subsequent yeas i.e. assessment years 2004-05 to 2007-08 is not justified and the same is deleted.
6 I.T.A.No.400-404 /Ahd/20129. In he result, appeal of the assessee in assessment year 2003-04 is dismissed whereas, the appeals in the remaining 4 years i.e. for assessment years 2004-05 to 2007-08 are allowed.
10. Order pronounced in the open court on the date mentioned hereinabove.
Sd./- Sd./-
(G. C. GUPTA) (A. K. GARODIA)
JUDICIAL MEMBER ACCOUNTANT MEMBER
Sp
Copy of the Order forwarded to:
1. The applicant
2. The Respondent
3. The CIT Concerned
4. The Ld. CIT (Appeals)
5. The DR, Ahmedabad By order
6. The Guard File
AR,ITAT,Ahmedabad
1. Date of dictation...15/10/2012
2. Date on which the typed draft is placed before the Dictating Member...17/10/2012.Other Member ............
3. Date on which the approved draft comes to the Sr. P.S./P.S.
4. Date on which the fair order is placed before the Dictating Member for pronouncement ......31/10/2012
5. Date on which the fair order comes back to the Sr. P.S./P.S.31/10
6. Date on which the file goes to the Bench Clerk ...31/10/2012
7. Date on which the file goes to the Head Clerk .......................
8. The date on which the file goes to the Assistant Registrar for signature on the order .........................
9. Date of Despatch of the order. ......................