Bhikhabhai K. Patel v. ACIT, Cent.Cir.2(1), Ahmedabad
[Citation -2016-LL-0922-24]

Citation 2016-LL-0922-24
Appellant Name Bhikhabhai K. Patel
Respondent Name ACIT, Cent.Cir.2(1), Ahmedabad
Court ITAT-Ahmedabad
Relevant Act Income-tax
Date of Order 22/09/2016
Assessment Year 2009-10
Judgment View Judgment
Bot Summary: The assessee has filed his return of income for the Asstt. Counsel for the assessee contended that there is no dispute with regard to the proposition that if an assessee failed to maintain books of accounts, and other documents as required under section 44AA, then penalty under section 271A can be imposed upon the assessee. AO has made addition to the total income of the assessee in both the years. The assessee cannot be visited with penalty. In the case of Dinesh Paper Mart, the assessee was a partnership firm and was maintaining books of accounts, which was audited as per section 44AB of the Act, but those books could not be produced before the AO in spite of several opportunities. The AO harboured a belief that the assessee was not maintaining books of accounts, and therefore, visited the assessee with penalty. In the present case also, the assessee was maintaining a diary, which had helped the AO to work out the alleged unaccounted sales.


IN INCOME TAX APPELLATE TRIBUNAL D BENCH, AHMEDABAD BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER IT(SS)A.No.279 and 280/Ahd/2013/Asstt. Year: 2009-10 and 2010-11 Bhikhabhai K. Patel ACIT, Cent.Cir.2(1) 16, Khodaldam Society Vs Ahmedabad. Bhadreshwar Ahmedabad 382475. PAN : AGWPP 3929 M (Appellant) (Respondent) Assessee by : Shri Tej Shah, AR Revenue by : Shri Sanjay Kumar, Sr.DR Date of Hearing : 10/08/2016 Date of Pronouncement: 22/09/2016 ORDER PER RAJPAL YADAV, JUDICIAL MEMBER Present two appeals are directed against common order of ld.CIT(A)-III, Ahmedabad dated 17.5.2013 passed for Asstt.Year 2009-10 and 2010-11. 2. Solitary grievance of assessee is that ld.CIT(A) has erred in confirming penalty of Rs.25,000/- imposed under section 271A of Income Tax Act, 1961 by AO in each assessment year. 3. Facts on all vital points are common in both years. Therefore, for facility of reference, we take up fact from asstt.year 2009-10. It IT(SS)A No.279 and 280/Ahd/2013 2 emerges out from record that search under section 132 of Act was carried out on 14.1.2010. During course of search, note book was seized which was inventorised as Annexure-A/1. assessee has filed his return of income for Asstt.Year 2009-10 on 30.1.2011 and disclosed income of Rs.24,01,550/-. Similarly, in Asstt.Year 2010-11, return was filed on 30.7.2011 and income of Rs.41,20,700/- was disclosed. ld.AO has passed assessment order in both years. He determined taxable income of assessee at Rs.35,03,254/- and Rs.42,52,210/- in Asstt.Years 2009-10 and 2010-11 respectively. AO was of opinion that turnover of assessee exceeded Rs.10 lakhs, and therefore, he was required to maintain books of accounts which in his opinion, were not being maintained by assessee, therefore, he initiated penalty proceedings under section 271A of Act. AO has ultimately imposed penalty of Rs.25,000/- in each assessment year. appeal to CIT(A) did not bring any relief to assessee. 4. Before us, ld.counsel for assessee contended that there is no dispute with regard to proposition that if assessee failed to maintain books of accounts, and other documents as required under section 44AA, then penalty under section 271A can be imposed upon assessee. He further contended that no specific type of books of accounts is being provided either under section 44AA or under relevant rules, which was required to be maintained by assessee. It is not case that assessee was not maintaining any books. He was maintaining diary which disclosed turnover, and basis of turnover mentioned in diary. ld.AO has made addition to total income of assessee in both years. Therefore, assessee cannot be visited with penalty. In support of his contentions, he relied upon order of ITAT in case of ITO Vs. Dinesh Paper Mart, 70 ITD 274 (Nag.) and in case of Sant Construction Co. Vs. ITO, 86 IT(SS)A No.279 and 280/Ahd/2013 3 TAXMAN 268 (Delhi)(Mag.). He placed on record copy of both these decision. On other hand, ld.DR relied upon order of AO. 5. We have duly considered rival contentions and gone through record carefully. In case of Dinesh Paper Mart (supra), assessee was partnership firm and was maintaining books of accounts, which was audited as per section 44AB of Act, but those books could not be produced before AO in spite of several opportunities. AO harboured belief that assessee was not maintaining books of accounts, and therefore, visited assessee with penalty. In this background, Tribunal got occasion to examine nature of books of accounts required to be maintained under section 44AA of Income Tax Act. It has been held that section does not provide any specific type of books of accounts. It only talks about accounts and documents, which can enable AO to adduce true income of assessee. In present case also, assessee was maintaining diary, which had helped AO to work out alleged unaccounted sales. Therefore, in our opinion, ld.AO was not justified to impose penalty under section 271A of Act. We allow both appeals and delete impugned penalty. 6. In result, appeals of assessee, both are allowed. Order pronounced in Court on 22nd September, 2016 at Ahmedabad. Sd/- Sd/- (MANISH BORAD) (RAJPAL YADAV) ACCOUNTANTN MEMBER JUDICIAL MEMBER Ahmedabad; Dated 22/09/2016 Bhikhabhai K. Patel v. ACIT, Cent.Cir.2(1), Ahmedabad
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