Income Tax Appellate Tribunal - Delhi
Nikki Tyagi, Delhi vs Ito Ward 44(1), New Delhi on 30 June, 2022
IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH 'E', NEW DELHI
Before Sh. A.D. Jain, Vice President
Dr. B. R. R. Kumar, Accountant Member
ITA No.5508/Del/2019
Asstt. Year: 2015-16
Sh. Nikki Tyagi, Vs Income Tax Officer,
C/o-Umang Sahai Aggarwal, Ward-44(1),
Advocate, New Delhi
505, Maitri Apartment,
Opp. Metro Pillar-411
Sector-09, Rohini
Delhi-110085
(ASSESSEE) (REVENUE)
PAN No. ATHPT0120E
Assessee by : Sh. U.S. Aggarwal, Adv.
Revenue by : Sh. N.K. Bansal, Sr.DR
Date of Hearing: 10.05.2022 Date of Pronouncement: 30.06.2022
ORDER
Per Dr. B. R. R. Kumar, Accountant Member:
The present appeal has been filed by the assessee against the order of the ld. CIT(A)-15, New Delhi, dated 08.05.2019, relating to AY 2015-16.
2. Brief facts of the case are that the assessee has declared income from the business being the distributor of Mother Dairy Packed Milk and milk products. Before the AO, the assessee submitted that the assessee does not maintain the books of account and return is filed as per the presumptive taxation provisions. The assessee deposits the security with 2 ITA No.5508/Del/2019 Mother Dairy against which he receives the milk products to be delivered. He receives cash on daily basis against milk products and deposits the same in his current account. Thereafter he makes ECS payment to mother dairy. The assessee increases the product value as per the distributor margin indicated by the mother dairy from time to time and he may decrease the margin as per shop to shop.
3. Amount available to the assessee is the net margin to the assessee as disclosed in the return of income. The returned income of Rs.2,49,210/-.
4. The assessee maintains bank accounts with the State Bank of India, Vikas Puri, New Delhi (Current Account) & Oriental Bank of Commerce, Vikas Puri, New Delhi (Saving Account) Copies of bank statements have also been furnished. Information u/s 133(6) of the Income tax Act was also called for from the Mother dairy. The Senior Manager, Mother Dairy has forwarded the ledger account of the assessee as appearing in the books of Mother Dairy Fruit & Vegetable Pvt. Ltd.
5. The AO held that total turnover of the assessee works out to Rs.3,19,09,663/- which was received by the Mother Dairy through assessee's bank accounts. It was held that since, the assessee's turnover exceeds Rs. One crore the assessee was liable to get his books of account audited. Owing to non-audited of books of accounts after having exceeded threshold limit specified u/s 44AB, penalty u/s 271B has been levied.
6. The Ld. CIT(A) confirmed the addition.
3 ITA No.5508/Del/20197. For the sake of ready reference and completeness of the entire order of the Ld. CIT(A) is reproduced hereunder:-
Th e A O h a s l evi e d t h e p en al t y on a c c ou n t of f ailu r e of t h e as s e ss e e in g et t in g h e r a c c ou n t s au d it ed a s t h e t u r n o v er o f t h e b u sin e s s e x c e ed ed t h e t h r esh ol d li m it sp e ci fi ed u / s 4 4A B. D u ri n g t h e c ou r s e o f ap p ella t e p r o c e ed in g s , Th e A R of t h e ap p ell an t h as co n t en d ed t h a t , ".. . .T h at it is an ad m i t t ed fa ct t h at t h e ap p ella n t h as n ot m aint ain ed a n y b o ok s o f ac c ou n t . Ev en in P ar a 4 o f A ss e s sm e n t O rd e r on p ag e 2 it is d u l y m en t i on ed t h at t h e as s e ss e e h a s n ot m ain t ain e d t h e b o o k s o f a c c ou n t an d r et u rn i s f il ed a s p e r p r e su m p t i v e t axa t i on b a si s. . ' Th e c on t en t i on o f t h e A p p e llan t h as b e en c on si d e r ed an d t h e o rd e r o f A O h as al s o b e en p e ru s ed . It i s s e en t h at t h e a s s ess e e h a s a ch i e v ed a t ot al t u rn o v e r of R s, 3 ,1 9 ,0 0 ,6 6 3/ - in h e r b u s in es s. Th i s t u rn o v er fig u r e h as al r ea d y b e en c on fi rm e d b y Mo t h e r D a ir y . T h e c on t en t i on of t h e ap p el lan t t h at t h e r et u rn o f in c om e i s fil ed o n p r e su m p t i v e t ax at i on b a si s i s n ot ap p li cab l e t o t h i s t u rn o v er fig u r e , It h a s b e en h e ld in t h e ca s e o f C IT V s S .C . Na r eg al ( K ar ) 3 2 9 I TR 6 1 5 t h at Ig n o ran c e o f la w is n o e xc u s e an d ac c o rd in g ly t h e L e v y o f p en alt y u / s 2 7 I B w as u p h el d . Th e A O h as g i v e n d e t ail e d r ea son o n p ag e 2 of h is o rd e r f o r l e v yin g t h e p en alt y. Th e r e f or e , c on sid e rin g t h e fa ct s an d ci r cu m st a n c e s of t h e ca s e, I am o f t h e c on s id e r ed op in i o n t h at t h e wh ol e o f t h e t u rn ov e r i s t o b e t a k en f o r t h e p u rp o se o f c al c u lat in g t h e G r o ss t u rn o v er o f t h e b u sin e s s. T h er e f o r e, t h e a ct i on o f t h e A .O , in le vy in g t h e p en al t y of R s . 1 ,5 0 ,0 0 0/ - u / s 2 7 1 B i s ju s t if i ed an d t h e act io n o f t h e A . O . i s c on fi r m ed a cc o rd in g ly .
8. We have gone through the facts on record. The provisions of section 271B are as under:-
"271B. If any person fails to get his accounts audited in respect of any previous year or years relevant to an assessment year or furnish a report of such audit as required under section 44AB, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum equal to one-half per cent of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in profession, in such previous year or years or a sum of one hundred fifty thousand rupees, whichever is less."
9. Provisions of section 273B are as under:-
"Notwithstanding anything co ntaine d in the pro visions of..... section 271B........, No penalty shall be 4 ITA No.5508/Del/2019 imposable on the person o r the asse ssee, as the case may be, fo r any failure re fer to in the said pro visions if he proves that there was reaso nable cause for the said failure."
10. In the instant case, it is proved that all the goods viz. the milk products and the vegetables belongs to the principle "Mother Dairy". The assessee sells goods on behalf of the principle Mother Dairy on commission basis. The senior Manager of Mother Dairy has also confirmed these facts. The receipts are sent back to the Mother Dairy through ECS on regular intervals. What the assessee gets in this case is only the Commission income. The rate of commission is also determined by the "Mother Dairy fruit and vegetable Pvt. Ltd." The assessee increased the product value as per the distributor margin indicated by the Mother Dairy from time to time and as per shop to shop based on the locality. Revenue has wrongly considered the gross turnover as the sale of the assessee instead of the commission/margin amount earned by the assessee. Hence, keeping in view, the peculiar facts in the instant case and the provisions of 271B and 273B, we hold that the penalty levied be obliterated.
11. In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 30/06/2022.
Sd/- Sd/- (A.D. Jain) (B. R. R. Kumar) Vice President Accountant Member Dated: 30/06/2022