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Cites 3 docs
The Income- Tax Act, 1995
Section 44AB in The Income- Tax Act, 1995
Section 11(1)(a) in The Income- Tax Act, 1995

Income Tax Appellate Tribunal - Amritsar
Improvement Trust,, Bathinda vs Assessee on 15 October, 2013

IN THE INCOME TAX APPELLATE TRIBUNAL

AMRITSAR BENCH; AMRITSAR.

BEFORE SH. H.S. SIDHU, JUDICIAL MEMBER

AND SH. B.P. JAIN, ACCOUNTANT MEMBER

I.T.A. No. 412(Asr)/2013

Assessment year: 2006-07

PAN: AAATE1563E

Improvement Trust, Vs. The Dy. CIT, Circle-I, Dr. Mela Ram Road, Bathinda Bathinda

(Appellant) (Respondent)

With

I.T.A. No. 413(Asr)/2013

Assessment year: 2005-06

PAN: AAATE1563E

Improvement Trust, Vs. The ACIT, Circle-I, Dr. Mela Ram Road, Bathinda Bathinda

(Appellant) (Respondent)

Appellant by: Sh. K.R. Jain, Advocate

Respondent by: Sh. Tarsem Lal, DR

Date of hearing: 14.10.2013

Date of pronouncement: 15.10.2013

ORDER

PER BENCH

1) The assessee has filed the present two appeals against the

different orders of CIT(A), Bathinda, each dated 19.03.2013 for the

assessment years 2006-07 & 2005-06.

2

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I.T.A. No. 413(Asr)/2013

2) Since the issue in dispute in both the appeals are identical,

which is regarding the penalty under Section 271B of the Income Tax

Act, 1961 (in short "the Act"), except different amounts of receipts

shown by the assessee in both the assessment years, we proceed to decide

both the appeals by passing a consolidated order.

3) For the sake of disposal, we are narrating the facts as narrated

by the Revenue in I.T.A. No. 412(Asr)/2013 for the assessment year

2006-07, as under:

i. The assessee filed its return of income on 31.01.2007, declaring loss of Rs. 32,65,590/-. The assessee deals in purchase of land and development thereof into residential and commercial plots and buildings. During the year under consideration, the assessee showed total receipts of Rs. 12,21,97,171/-. During the course of assessment proceedings, the Assessing Officer noticed that there were another receipts of Rs. 7,39,80,248/- as per para 6 of the assessment order. Thus, the total receipts of the assessee during the years works out to Rs. 19,61,77,419/-. The assessee was allowed registration under Section 12AA by the learned Commissioner of Income Tax, Bathinda on 16.08.2010 w.e.f. 12.06.2003. The assessee was to utilize 85% of its receipts as per the provisions of Section 11(1)(a) of the Act to claim exemption of its income. However, the assessee has shown the application of income, as per income and expenditure account to the tune of Rs. 4,16,51,317/- which works out to 21.23% of the total 3

I.T.A. No. 412(Asr)/2013

I.T.A. No. 413(Asr)/2013

receipts at Rs. 19,61,77,419/-. Thus, the balance receipts at Rs. 12,51,02,340/- are obviously taxable receipts. These taxable receipts are assessable as receipts from business. As the taxable receipts are above 40 lacs, the assessee was required to get its accounts audited as per the provisions of Section 44AB of the Act. ii. The Assessing Officer given opportunity to the assessee to explain as to why penalty under Section 271B of the Act may not be imposed. In response to the same, it was stated that the assessee is a "Statutory Body" and that it also has been allowed registration under Section 12AA of the Act by the Commissioner of Income Tax, Bathinda w.e.f. 12.06.2003. The Assessing Officer held that this plea of the assessee has not been found tenable as a "Statutory Body" cannot be said to be exempt from getting its accounts audited if it derives income from business. Further, the Assessing Officer held that the registration under Section 12AA also does not make a person or entity exempt from getting its accounts audited if its gross taxable receipts exceed the limit as prescribed under Section 44AB of the Act. The Assessing Officer is of the view that there is omission on the part of the assessee to get its accounts audited in contravention of the provisions of Section 44AB and, as such, the assessee has committed a default for which penalty under Section 271B of the Act is imposable and he imposed the penalty of Rs. 1 lakh under Section 271B of the Act vide his order dated 31.03.2011.

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I.T.A. No. 413(Asr)/2013

4) Aggrieved by the order dated 31.03.2011, the assessee filed an

appeal before the learned First Appellate Authority, who vide impugned

order dated 19.03.2013, dismissed the appeal of the assessee and upheld

the order passed by the Assessing Officer. Now, being aggrieved with the

order of learned First Appellate Authority, the assessee filed the present

appeals.

5) In compliance of the order dated 19.09.2013 passed by Hon'ble

High Court of Punjab and Haryana at Chandigarh, in Civil Writ Petition

No. 1151 of 2013(O&M), Improvement Trust Vs. Commissioner of

Income Tax, Bathinda & Others, the present cases came up for hearing

before this Bench on 14.10.2013 and Sh. K.R. Jain, Advocate, appeared

for the assessee and stated that he has received notice of hearing for the

present appeals on 10th October, 2013 and necessary communication to

this effect has been sent to the assessee-trust on 11th October, 2013 but

he has not received any instruction from the assessee so far. Therefore, he

requested for adjournment. But keeping in view the direction given by

the Hon'ble High Court, we are unable to adjourn the matter being a time-

bound matter. Accordingly, we reject the request of learned counsel for

the assessee for adjournment and proceed to decide the present appeals 5

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I.T.A. No. 413(Asr)/2013

ex-parte assessee after hearing learned DR and as per the materials

available on record.

6) Learned DR relied upon the order passed by learned First

Appellate Authority.

7) We have heard learned DR and perused the materials available

on record, especially the impugned order and we are of the considered

view that the assessee filed its return of income relating to the assessment

year 2006-07 on 31.01.2007, declaring loss of Rs. 32,65,590/-. During

the assessment proceedings, the Assessing Officer noticed that the

assessee had shown receipts of Rs. 12,21,97,171/- besides the receipts of

Rs. 7,39,80,248/-.Thus, the total receipts of the assessee during the year

under considering worked out at Rs. 19,61,77,419/-. As a turnover in the

case exceeded Rs. 40 lacs, the assessee was required to get its accounts

audited as per the provisions of Section 44AB of the Act. Since the

assessee failed to comply with the said provisions, proceedings for

imposing of penalty under Section 271B of the Act was initiated. The

explanation of the assessee to the show cause notice is that the assessee

was a statutory body and it was also allowed registration under Section

12AA of the Act by the Commissioner of Income Tax, Bathinda, w.e.f 6

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I.T.A. No. 413(Asr)/2013

12.06.2003. The assessee was not under any legal obligation to get its

accounts audited in view of the provisions of Section 44AB of the Act.

The Assessing Officer has imposed the penalty in dispute and the learned

First Appellate Authority has upheld the same by not accepting the

explanation filed by the assessee because Section 12AA of the Act did

not exempt any entity from getting the accounts audited if its gross

taxable receipts exceed the limit prescribed under Section 44AB of the

Act.

8) It is pertinent to mention here that this Bench, vide order dated

18.12.2012 has also dismissed the appeal i.e. I.T.A. No. 366(Asr)/2012

filed by the assessee for grant of registration under Section 12AA of the

Act, which was filed against the order of refusal passed by CIT,

Bathinda, for granting of registration under Section 12AA of the Act.

This Bench has held that the assessee trust was involved in carrying on

various activities which are in the nature of trade, commerce or business

and that it has not done any activity for advancement of general public

utility etc.

9) Keeping in view the facts and circumstances explained above,

we are of the considered opinion that learned First Appellant Authority 7

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I.T.A. No. 413(Asr)/2013

has rightly dismissed the appeal filed by the assessee and imposed the

penalty of Rs. l lac on account of failure of the assessee to get the

accounts audited inspite of the fact that the turnover of the assessee

exceeded to Rs. 40 lakhs as per the provisions of Section 44AB of the

Act. We are of the view that no interference is called for in the well

reasoned order passed by the learned First Appellate Authority.

Accordingly, we dismiss the appeal filed by the assessee i.e. I.T.A. No.

412(Asr)/2013 and uphold the order passed by learned First Appellant

Authority.

10) Since the facts in I.T.A. No. 413(Asr)/2013 for assessment year

2005-06 are identical with the facts narrated in I.T.A. No. 412(Asr)/2013,

except different amounts of receipts shown by the assessee in both the

assessment years, and we have dismissed the appeal i.e. I.T.A. No.

412(Asr)/2013, the same result is applicable in I.T.A. No. 413(Asr)/2013.

Accordingly, both the appeals i.e. I.T.A. No. 412(Asr)/2013 & I.T.A. No.

413(Asr)/2013 are dismissed and we uphold the impugned order passed

by learned First Appellate Authority in each assessment years 2006-07 &

2005-06.

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I.T.A. No. 413(Asr)/2013

11) In the result, both the appeals i.e. I.T.A. No.

412(Asr)/2013 & I.T.A. No. 413(Asr)/2013 filed by the assessee are

dismissed.

Order pronounced in the open court on 15th October, 2013

Sd/./- Sd/./- (B.P. JAIN) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated: 15th October, 2013

/RK/

Copy of the order forwarded to:

1. The Assessee: Improvement Trust, Dr. Mela Ram Road, Bathinda

2. The Dy. CIT, Circle-I, Bathinda

3. The ACIT, Circle-I, Bathinda

4. The CIT(A), Bathinda

5. The CIT, Bathinda

The SR DR, I.T.A.T., Asr

True copy

By order

(Assistant Registrar)

Income Tax Appellate Tribunal,

Amritsar Bench: Amritsar.