Telangana High Court
S. Ramakumar Reddy vs Asstt. Cit 43, on 2 November, 2022
Bench: Ujjal Bhuyan, C.V. Bhaskar Reddy
THE HON'BLE THE CHIEF JUSTICE UJJAL BHUYAN
AND
THE HON'BLE SRI JUSTICE C.V.BHASKAR REDDY
I.T.T.A. No.72 of 2006
JUDGMENT: (Per the Hon'ble the Chief Justice Ujjal Bhuyan)
Heard Mr. A.V.Siva Karthikeya, learned counsel representing
Mr. A.V.Krishna Kaundinya, learned counsel for the appellant and
Mr. J.V.Prasad, learned Standing Counsel, Income Tax
Department for the respondent.
2. This appeal has been preferred by the assessee as the
appellant under Section 260A of the Income Tax Act, 1961 (briefly
referred to hereinafter as the 'Act'), assailing the legality and
validity of the order dated 08.04.2005 passed by the Income Tax
Appellate Tribunal, Hyderabad Bench 'B', Hyderabad (Tribunal) in
I.T.A.No.164/Hyd/1999 for the assessment year 1995-96.
3. Though the appeal was filed way back in the year
2005, the same is yet to be admitted. Only notice was issued on
15.02.2006.
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4. Be that as it may, the question proposed by the
appellant for consideration of the Court as a substantial question
of law as can be discerned from the memo of appeal is as under:
Whether on the facts and in the circumstances of the case,
the Tribunal was justified in upholding the order of the
Commissioner of Income Tax (Appeals) confirming levy of penalty of
Rs.1,00,000.00 by the assessing officer?
5. Appellant is an assessee under the Act and was a
Bookie at Hyderabad Race Club. For the assessment year 1994-
95, he filed his return of income declaring total income of
Rs.5,82,490.00. Assessing officer noted that appellant had not
complied with the provisions of Section 44AB of the Act i.e., by
submitting audited accounts, levied penalty of Rs.1,00,000.00
under Section 271B of the Act.
6. In appeal before the first appellate authority i.e.,
Commissioner of Income Tax (Appeals), order passed by the
assessing officer was affirmed. This led to filing of further appeal
before the Tribunal.
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7. Tribunal in the order dated 08.04.2005 held as follows:
"6. We have heard rival contentions. On a careful
consideration of the facts and circumstances of the case, we
find that a notice under sec. 148 was issued and it was only in
response to that notice that the assessee had filed his return
of income. The entertainment tax return of the assessee shows
that his turnover is Rs.3,37,70,270. The assessee paid
entertainment tax. Subsequent to the notice given by the AO
for levy of penalty under sec. 271B, the assessee claimed that
he was under a genuine belief that his turnover had not
crossed Rs.40 lakhs and he need not get his accounts audited.
While saying so, he filed additional evidence stating that due to
seizure of books by the Sales tax authorities, the audit of
accounts under sec. 44AB got delayed. This is a contradictory
stand. As the assessee bona fide believed that his accounts
need not be audited, he would not have taken a plea that the
audit got delayed due to seizure of books by the Sales tax
authorities. Having paid entertainment lax on a turnover of
Rs.3,37,70,270, the assessee cannot claim that he believed
that his turnover was much below that amount. The return
itself was not filed voluntarily, but in response to a notice
under sec. 148. The argument of the learned counsel for the
assessee that the penalty was levied much prior to completion
of assessment also, does not come to the rescue of the
assessee as nothing in law prevents the AO from levying
penalty under sec. 271B prior to completion of assessment
proceedings.
7. The petition for admission of additional evidence cannot
be entertained at this stage as before the CIT (A) no plea was
taken that due to seizure of books by Sales tax authorities the
audit got delayed. Even otherwise, no copy of letter from the
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I.T.T.A.No.72 of 2006
Sales tax authorities is filed before us. The two letters dated
28-8-1996 and 25-3-1997 are of the assessee written to the
Commercial Tax Officer, and are self-serving.
8. In view of the fact that the assessee himself filed
entertainment tax return and paid tax on a turnover of
Rs.3,37,70,270, we are inclined to upheld the order of the CIT
(A) and confirm levy of penalty of Rs.1,00,000.
9. In the result, the appeal of the assessee is dismissed."
8. Thus Tribunal noticed that subsequent to notice
issued by the assessing officer for levy of penalty under Section
271B of the Act, appellant had claimed that he was under a
genuine belief that his turnover had not crossed Rs.40 lakhs and
therefore he need not get his accounts audited. It may be
mentioned that the entertainment tax return of the appellant
showed his turnover at Rs.3,37,70,270.00. Tribunal further noted
the contradictory stand of the appellant when he contended that
due to seizure of books by the sales tax authorities, audit of
accounts under Section 44AB of the Act got delayed. Additionally
Tribunal held that appellant did not file the income tax return
voluntarily but it was in response to a notice under Section 148 of
the Act.
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9. In view of above, Tribunal confirmed the levy of
penalty.
10. We do not find any error or infirmity in the view taken
by the Tribunal. No question of law arises out of the aforesaid
order of the Tribunal dated 08.04.2005, not to speak of any
substantial question of law.
11. The appeal is accordingly dismissed. However, there
shall be no order as to costs.
12. Miscellaneous applications pending, if any, shall stand
closed.
__________________________
UJJAL BHUYAN, CJ
___________________________
C.V.BHASKAR REDDY, J
Date: 02.11.2022
KL
