आयकर अपीलीय अधीकरण, Ûयायपीठ - " ए ", कोलकाता, IN THE INCOME TAX APPELLATE TRIBUNAL "ए" BENCH : KOLKATA (सम¢)Before ौी डȣ. डȣ. के. ×यागी, ×यागी, Ûयायीक सदःय, एवं/and ौी सी. सी.डȣ. डȣ.राव, राव लेखा सदःय) [Before Hon'ble Sri D. K. Tyagi, JM & Hon'ble Sri C. D. Rao, AM] आयकर अपील संÉया / I.T.A No. 1147/Kol/2010 िनधॉरण वषॅ/Assessment Year : 2006-07 M/s. R. T. Construction -Vs- Income-tax Officer, Wd-1(3), Hooghly (PA No.AAHFR 9692 J) (अपीलाथȸ/Appellant) (ू×यथȸ/Respondent)
For the Appellant: Sri S. M. Surana For the Respondent : Sri S. C. Jain आदे श/ORDER ौी डȣ.
Per D. K. Tyagi, JM (ौी डȣ. के. ×यागी, ×यागी, Ûयायीक सदःय) This appeal filed by the assessee is directed against the order passed by the Ld. CIT(A), Kolkata dated 28.04.2010 for assessment year 2006-07 on the ground of confirming the penalty imposed u/s. 271A of the Act.
2. Briefly stated facts as observed by the Assessing Officer are that during the course of assessment proceedings, the Assessing Officer called for books of accounts. In response, the assessee argued that it was filing the return of income as per the provisions of section 44AD of the I. T. Act as it was engaged in the business of civil construction with turnover being less than Rs. 40 lakh. The Assessing Officer did not accept this contention on the ground that the assessee was a developer and builder constructing residential flats and selling them. Therefore, according to Assessing Officer, the provisions of section 44AD are not application. In view of this, the Assessing Officer took the view that the assessee defaulted as per the provisions of section 44AA of the I. T. Act for not maintaining true and complete books of accounts. Accordingly, he imposed penalty of Rs.25,000/- u/s. 271A of the I. T. Act. In appeal, the Ld. CIT(A) confirmed the penalty so imposed by the A.O. Being further aggrieved, the assessee is in appeal before us.2
3. At the time of hearing before us, the Ld. Counsel for the assessee while reiterating his same submissions as submitted before the lower authorities further submitted that the assessee has maintained books of account comprising of P&L Account etc. as per the provisions of section 44AD of the I. T. Act and filed along with the return and the Assessing Officer himself gave finding that the books of accounts though maintained were not produced for verification. He further submitted that during the course of assessment proceedings, the Assessing Officer took the view that the assessee defaulted, as per the provisions of section 44AA of the I. T. Act for not maintaining true and complete books of accounts. Accordingly, he imposed penalty of Rs.25,000/- u/s. 271A of the Act. This action of the Assessing Officer is completely unjust, improper and without any basis as the assessee was engaged in the business of civil construction with turnover being less than Rs. 40 lakhs. He also submitted that there is no requirement laid down in the statute which necessitates the maintenance of accounts by the assessee in accordance with section 44AA of the Act. He also submitted that the Ld. CIT(A) has erred in confirming the penalty when the assesee's case was covered by section 44AD, the income was assessed as such as mentioned in the order of the Ld. CIT(A) in quantum appeal. He also placed reliance on a decision in the case of Blue Heaven Construction Vs. ITO, ITA No.1000/Kol/2009 Assessment Year 2005-06 dated 13.11.2009. He lastly contended that on the facts and circumstances of the case the penalty imposed u/s. 271A is not in accordance with law and the same should be deleted in full.
4. On the other hand, the Ld. DR heavily placed reliance on the orders of the lower authorities.
5. We have heard both the sides and perused the material available on record. We find that the assessee firm is carrying on business of civil construction. During the course of assessment proceedings the Assessing Officer made an addition of Rs.90,440/- being 5% of Work-in-Progress on the ground that correctness of the Work- in-Progress is doubtful in absence of proper books of accounts. The Assessing Officer also initiated proceedings u/s. 271A of the I. T. Act for not maintaining books of accounts. The assessee filed appeal against the addition of Rs.90,440/- claiming that the assessee has shown his income during the year by applying the provision of section 3 44AD of the Act. The Ld. CIT(A) accepting the plea of the assessee allowed the appeal of the assessee and deleted the addition made of Rs.90,440/-. However, in the proceedings u/s. 271A, the penalty imposed by the Assessing Officer for not maintaining the books of accounts have been confirmed by the Ld. CIT(A), which according to us is not proper. Once the income shown by the assessee by applying the provisions of section 44AD of the Act is accepted, penalty for not maintaining the books of accounts can be levied. Therefore, the penalty imposed by the Assessing Officer and sustained by the Ld. CIT(A) is hereby deleted. The assessee's appeal is allowed.
6. In the result, the appeal of the assessee is allowed.
7. Order is pronounced in the open court on 28.1.2011 Sd/- Sd/-
सी.डȣ.राव, लेखा सदःय डȣ. के. ×यागी, Ûयायीक सदःय (C. D. Rao) (D. K. Tyagi) Accountant Member Judicial Member तारȣख) तारȣख) Dated : 28th January, 2011 (तारȣख वǐरƵ िनǔज सिचव Jd.(Sr.P.S.)
आदे श कȧ ूितिलǒप अमेǒषतः- Copy of the order forwarded to:
1. अपीलाथȸ/APPELLANT - M/s. R. T. Construction, 16, G. T. Road, Uttarpara, Hooghly-712 258 2 ू×यथȸ/ Respondent, ITO, Ward-1(3), Hooghly
3. आयकर किमशनर/The CIT, Kolkata
4. आयकर किमशनर (अपील)/The CIT(A), Kolkata.
5. वभािगय ूितनीधी / DR, Kolkata Benches, Kolkata स×याǒपत ूित/True Copy, आदे शानुसार/ By order, उप पंजीकार/Deputy Registrar.