Ganesh Sand Blasting Works, Hyd, Hyderabad V. DCIT, Circle-11(1), Hyd, Hyderabad

ITA 1031/HYD/2015

• Counselvise Citation: 103122514 RSA 2015
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 02-12-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 18-11-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 07-08-2015
• Court: TRIBUNAL
• Department Lawyers: B KURMI NAIDU
• Assessee Lawyers: V SIVA KUMAR
• Keywords: Reasonable cause
• Section: 139

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES B, HYDERABAD BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER I.T.A. NOS. 1030 & 1031/HYD/2015 ASSESSMENT YEARS : 2005-06 & 2006-07 M/S . GANESH SAND BLASTING WORKS, HYDERABAD [PAN: AAEFG4639F] VS DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-11(1), HYDERABAD (APPELLANT) (RESPONDENT) FOR ASSESSEE : SHRI V. SIVA KUMAR, AR FOR REVENUE : SHRI B. KURMI NAIDU, DR DATE OF HEARING : 1 8 - 1 1 - 201 5 DATE OF PRONOUNCEMENT : 02 - 12 - 2015 O R D E R PER B. RAMAKOTAIAH, A.M. : THESE TWO APPEALS ARE BY ASSESSEE AGAINST THE ORDE RS OF THE COMMISSIONER OF INCOME TAX (APPEALS)-5, HYDERABAD D ATED 30-04-2015 CONFIRMING THE PENALTIES LEVIED BY THE A SSESSING OFFICER (AO) FOR NON-FURNISHING OF AUDIT REPORTS IN TIME. 2. ASSESSEE A FIRM, SAID TO HAVE ENGAGED IN THE BUS INESS OF SAND BLASTING JOB WORKS, FILED ITS RETURNS OF INCOME ON 19-02-2008 DECLARING TOTAL INCOME OF RS. 9,15,500/- FOR AY. 20 05-06 AND I.T.A. NOS. 1030 & 1031/HYD/2015 M/S. GANESH SAND BLASTING WORKS :- 2 -: RS. 5,91,570/- FOR AY. 2006-07. DURING THE COURSE O F ASSESSMENT PROCEEDINGS, AO OBSERVED THAT ASSESSEE FILED TAX AU DIT REPORTS ALONG WITH RETURNS OF INCOME ON 19-02-2008 RATHER T HAN ON THE SPECIFIED DATES OF 31-10-2005 AND 31-10-2006 RESPEC TIVELY. AFTER GIVING OPPORTUNITY TO ASSESSEE, AO LEVIED PENALTY O F RS. 45,603/- AND RS. 50,635/-, BEING 0.5% OF GROSS RECEIPTS RESP ECTIVELY IN THE IMPUGNED ASSESSMENT YEARS. 3. ASSESSEE OBJECTED TO THE SAID LEVY OF PENALTY ST ATING THAT IT HAS GOT ACCOUNTS AUDITED AND OBTAINED THE AUDIT REP ORT ON OR BEFORE THE RESPECTIVE SPECIFIED DATES AND THEREFORE , COMPLIED TO THE PROVISIONS OF THE ACT, BUT THE SAME WERE FILED BELA TEDLY ON 19-02- 2008. DUE TO FINANCIAL DIFFICULTIES, RETURNS OF IN COME ITSELF WERE BELATEDLY FILED. IT WAS FURTHER SUBMITTED THAT IT IS NOT REQUIRED TO FURNISH THE TAX AUDIT REPORT ON OR BEFORE THE DUE D ATE SEPARATELY AND IS ONLY REQUIRED TO GET THE BOOKS OF ACCOUNT AU DITED BEFORE THE DATE WHICH IT HAS COMPLIED WITH. 4. LD. CIT(A) HOWEVER, EXTRACTING THE PROVISIONS OF SECTION 44AB, CAME TO THE CONCLUSION THAT THE LANGUAGE USED IN THE RELEVANT PROVISIONS IS THAT AUDIT REPORT NOT ONLY T O BE OBTAINED BUT ALSO TO BE FURNISHED BEFORE THE SPECIFIED DATE, WHI CH MEANS FURNISHING THE REPORT TO THE OFFICE OF THE AO. LD. CIT(A) WAS OF THE OPINION THAT THERE IS NO AMBIGUITY IN THE LANGUAGE USED IN THIS REGARD AND THE SPECIFIC WORDS OF FURNISHING BY THE DUE DATE WAS INCORPORATED W.E.F. 01-07-1995 MAKE IT CLEAR. THU S, ON THE FACTS, AS ASSESSEE HAS FURNISHED THE AUDIT REPORTS BELATED LY, THE PENALTIES WERE CONFIRMED. I.T.A. NOS. 1030 & 1031/HYD/2015 M/S. GANESH SAND BLASTING WORKS :- 3 -: 5. AFTER CONSIDERING THE RIVAL CONTENTIONS, WE ARE OF THE OPINION THAT LEVY OF PENALTY IS NOT WARRANTED ON THE FACTS OF THE CASE. ADMITTEDLY, ASSESSEE WAS IN FINANCIAL DIFFICULTY AN D THE RETURNS ITSELF WERE FILED BELATEDLY. AO HAS NOT TAKEN ANY OTHER ACTION FOR FILING THE RETURNS BELATEDLY BUT ONLY LEVIED PENALT Y U/S. 271B FOR NOT FURNISHING OF AUDIT REPORT. WE ARE OF THE OPIN ION THAT THERE IS A REASONABLE CAUSE IN FILING THE RETURN BELATEDLY. T HERE IS NO DISPUTE WITH REFERENCE TO THE FACT THAT ASSESSEE HAS OBTAIN ED THE AUDIT REPORTS ON THE RESPECTIVE DATES. WHERE ASSESSEE HA D OBTAINED AUDIT REPORT PRIOR TO THE SPECIFIED DATE FOR FILING RETURN U/S. 139(1), PENALTY U/S. 271B COULD NOT BE LEVIED IF THE REPORT IS FILED BELATEDLY ALONG WITH THE RETURN FILED U/S. 139(4). WE RELY O N THE PRINCIPLES LAID DOWN BY THE HON'BLE PUNJAB AND HARYANA HIGH CO URT IN THE CASE OF CIT VS. VANTI RANI KALIA [190 TAXATION 394] (P&H) THE DUE DATE FOR RETURN OF INCOME UNDER SECTION 139(1) WAS ON OR BEFORE 30-10-1992. THE ASSESSEE OBTAINED AUD IT REPORT UNDER SECTION 44AB ON 28-10-1992, I.E., BEFORE THE SPECIF IED DATE. THE RETURN OF INCOME WAS ACTUALLY FILED BY THE ASSESSEE ON 8-7-1993, WHICH WAS ACCOMPANIED WITH THE AUDIT REPORT UNDER S ECTION 44AB OF THE ACT. REJECTING THE STAND OF THE ASSESSEE TH AT THE RETURN OF INCOME HAVING BEEN FILED UNDER SECTION 139(4), THER E WAS NO DEFAULT ON THE PART OF THE ASSESSEE IN FURNISHING THE AUDIT REPORT ALONG WITH THE RETURN OF INCOME FILED UNDER SUB-SECTION (4) OF SECTION 139, THE AO LEVIED THE PENALTY UNDER SECTION 271B. HELD: WH ERE THE RETURN OF INCOME HAD BEEN FILED UNDER SUB-SECTION (4) OF S ECTION 139 AND THE SAME WAS DULY ACCOMPANIED BY THE AUDIT REPORT O BTAINED BY THE ASSESSEE IN ACCORDANCE WITH THE PROVISIONS OF SECTI ON 44AB, PENALTY UNDER SECTION 271B WAS NOT EXIGIBLE. THE TRIBUNAL WAS RIGHT IN CANCELLING THE PENALTY UNDER SECTION 271B IMPOSED B Y THE AO AND CONFIRMED BY THE COMMISSIONER (APPEALS). 6. FURTHER, AS STATED BY ASSESSEE, THERE WAS REASON ABLE CAUSE EVEN FOR FILING THE RETURN BELATEDLY. THEREFORE, E VEN THOUGH THE REPORT WAS OBTAINED, THE SAME COULD NOT BE FURNISHE D TO THE AO. FOLLOWING THE PRINCIPLES LAID DOWN BY THE HON'BLE H IGH COURT OF I.T.A. NOS. 1030 & 1031/HYD/2015 M/S. GANESH SAND BLASTING WORKS :- 4 -: UTTARAKHAND IN THE CASE OF CIT AND ANOTHER VS. IQBA LPUR CO-OPERATIVE CANE DEVELOPMENT UNION LTD., [179 TAXM AN 27], WE ARE OF THE OPINION THAT THERE IS A REASONABLE CAUSE AND THEREFORE, PENALTY U/S. 271B IS NOT WARRANTED. WE HEREBY CANC EL THE PENALTIES LEVIED AND ALLOW THE ASSESSEES GROUNDS. 7. IN THE RESULT, APPEALS OF ASSESSEE ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 02 ND DECEMBER, 2015 SD/- SD/- (D. MANMOHAN) (B. RAMAKOTAIAH) VICE PRESIDENT ACCOUNTANT MEMB ER HYDERABAD, DATED 02 ND DECEMBER, 2015 TNMM COPY TO : 1. M/S. GANESH SAND BLASTING WORKS, PLOT NO. 52, PH ASE- I, JEEDIMETLA, R.R. DISTRICT, HYDERABAD. 2. DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-11(1), I.T. TOWERS, A.C. GUARDS, HYDERABAD. 3. CIT (APPEALS)-5, HYDERABAD. 4. THE CIT-5, HYDERABAD. 5 . D.R. ITAT, HYDERABAD. 6. GUARD FILE.