Virudhunagar District Co-operative Consumers Co-Op Stores Ltd., Virudhunagar V. ITO Ward 5, Virudhunagar

ITA 1065/CHNY/2019

• Counselvise Citation: [2020] 109 COUNSELVISE.COM (IT) 9699 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 8 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-12-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 15-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: S SRIDHAR
• Keywords: Principle of natural justice; Reasonable cause
• Section: 271B; 44AB

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI , . , % BEFORE SHRI MAHAVIR SINGH, VICE-PRESIDENT AND SHRI G.MANJUNATHA, ACCOUNTANT MEMBER ./ I.T.A.NO.1065/CHNY/2019 ( / ASSESSMENT YEAR: 2013-14) M/S. VIRUDHUNAGAR DISTRICT CO-OPERATIVE CONSUMERS CO-OP. STORES LTD. 165/2/62/1, ARUPPUKOTTAI ROAD, VIRUDHUNAGAR. VS THE INCOME TAX OFFICER, WARD-5, VIRUDHUNAGAR. PAN:AAAAV0586F ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. S.SRIDHAR , ADVOCATE /RESPONDENT BY : MR. SURESH PERIASAMY, JCIT /DATE OF HEARING : 29.12.2020 /DATE OF PRONOUNCEMENT : 29.12.2020 / O R D E R PER G.MANJUNATHA, ACCOUNTANT MEMBER: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED A GAINST THE ORDER OF THE LEARNED CIT(A)-1, MADURAI DATED 04.03 .2019 AND PERTAIN TO ASSESSMENT YEAR 2013-14. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS O F APPEAL: 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX ( APPEALS) CIT(A) IS BAD AND ERRONEOUS IN LAW AND AGAINST THE PRINCIPLES OF NATURAL JUSTICE. 2. THE LEARNED CIT(A) ERRED IN NOT CONSIDERING THE GROUNDS OF APPEAL AND WRITTEN SUBMISSIONS IN PROPER PERSPECTI VE. 3.(A) THE LEARNED CIT (A) ERRED IN NOT CONSIDERING THE MATERIALS THAT THE VERY PURPOSE OF FURNISHING AUDIT REPORT, N ECESSITATING THE DETERMINATION OF INCOME OF THE APPELLANT HAD BEEN F ULFILLED BY THE VERY REASON THAT THE SAME HAD BEEN CONSIDERED AND A CCEPTED BY 2 ITA NO.1065/CHNY/2019 THE ASSESSING OFFICER EVEN IN THE COURSE OF ASSESSM ENT PROCEEDINGS. (B) THE LEARNED CIT (A) ERRED IN NOT CONSIDERING TH E FACT THAT THE DELAY, IF AT ALL ANY, WAS DUE TO THE DELAY IN THE A UDIT OF ACCOUNTS OF THE APPELLANT SOCIETY UNDER TAMIL NADU CO-OPERATIVE SOCIETIES ACT,1983, WHICH WAS BEYOND THE CONTROL OF THE APPEL LANT SOCIETY. (C) THE LEARNED CIT(A) ERRED IN NOT CONSIDERING THE DELAY IN THE INITIATION OF THE IMPUGNED PENALTY PROCEEDINGS AS L ATE AS IN 2018, WHILE THE ASSESSMENT WAS COMPLETED AS EARLY AS IN 0 9/03/2016. 3. BRIEF FACTS OF THE CASE ARE THAT ASSESSEE HAS FI LED ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2013-14 ON 05.06.2014 AD MITTING NIL TAXABLE INCOME AND SUCH RETURN WAS FILED BELATEDLY U/S.139(4) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) . THE ASSESSEE HAS FILED TAX AUDIT REPORT AS REQUIRED TO BE FURNISHED U/S.44AB OF THE ACT ELECTRONICALLY ON 14.05.2014. THE ASSESSMENT FOR THE IMPUGNED ASSESSMENT YEAR HAS BEEN COMPLETED U/S.143(3) OF THE ACT ON 09.03.2016 AND DETERMINED TOTAL INCO ME OF ` 36,493/- AFTER MAKING ADDITIONS TOWARDS DISALLOWA NCE OF EXPENDITURE. THEREAFTER, THE ASSESSING OFFICER HAS INITIATED PENALTY PROCEEDINGS U/S.271B OF THE ACT FOR FAILURE TO FILE TAX AUDIT REPORT AS REQUIRED U/S.44AB OF THE ACT FOR THE IMPUGNED ASSE SSMENT YEAR WITHIN THE DUE DATE SPECIFIED UNDER THE ACT AND HEN CE, CALLED UPON THE ASSESSEE TO FILE NECESSARY EVIDENCES AS TO WH Y PENALTY SHALL 3 ITA NO.1065/CHNY/2019 NOT BE LEVIED FOR NON-FILING OF TAX AUDIT REPORT. IN RESPONSE, THE ASSESSEE SUBMITTED THAT ALTHOUGH THERE WAS DELAY IN FILING OF TAX AUDIT REPORT U/S.44AB OF THE ACT, BUT SAID RETURN H AS BEEN FILED BEFORE COMPLETION OF ASSESSMENT AND FURTHER, FILI NG OF COMPULSORY E-AUDIT REPORT WAS INTRODUCED FOR FIRST TIME FROM ASSESSMENT YEAR 2013-14 AND BECAUSE OF THIS THERE WAS TECHNICAL GL ITCH IN E-PORTAL PROVIDED FOR UPLOADING TAX AUDIT REPORT, WHICH RES ULTED IN DELAY, BUT SAID DELAY IS NEITHER INTENTIONAL NOR TO DERIVE ANY BENEFIT AND HENCE, THERE WAS NO NEED TO LEVY PENALTY U/S.271B OF THE A CT. THE ASSESSING OFFICER, HOWEVER, NOT CONVINCED WITH EXPL ANATION FURNISHED BY THE ASSESSE AND ACCORDING TO HIM, ALTH OUGH ASSESSEE CLAIMS THAT THERE WAS DIFFICULTY IN FILING ELECTRON IC TAX AUDIT REPORT, BUT SUCH CLAIM HAS NOT BEEN SUBSTANTIATED WITH ANY EVID ENCES ACCORDINGLY, LEVIED A SUM OF ` 1,50,000/- PENALTY U/S.271B OF THE ACT. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, ASSESSE E PREFERRED AN APPEAL BEFORE LEARNED CIT(A). BEFORE LEARNED CI T(A), ASSESSEE HAS REITERATED ITS SUBMISSIONS MADE BEFORE ASSESS ING OFFICER FOR NOT FILING TAX AUDIT REPORT WITHIN THE TIME ALLOWED UNDER THE ACT ALONG WITH CERTAIN JUDICIAL PRECEDENTS AND ARGUED THAT AS SESSEE NEITHER 4 ITA NO.1065/CHNY/2019 HAVE ANY DELIBERATE INTENTION NOT TO FILE TAX AUDIT REPORT WITHIN THE TIME ALLOWED NOR DERIVED ANY UNDUE BENEFIT BY N OT FILING THE RETURN AS REQUIRED UNDER THE ACT AND HENCE, FOR DELAY IN F ILING TAX AUDIT REPORT PENALTY U/S. 271B OF THE ACT CANNOT BE FASTE NED ON THE ASSESSE, WHEN ASSESSEE HAS EXPLAINED REASONS FOR NO T FILING TAX AUDIT REPORT WITHIN DUE DATE ALLOWED UNDER THE ACT. 5. THE LEARNED CIT(A), AFTER CONSIDERING SUBMISSIO NS OF THE ASSESSEE OBSERVED THAT REASONS GIVEN FOR NOT FILING TAX AUDIT REPORT IN TIME DOES NOT COME UNDER REASONABLE CAUSE AS PR OVIDED U/S.273B OF THE ACT AND HENCE, THERE IS NO ERROR IN THE FINDINGS RECORDED BY ASSESSING OFFICER TO LEVY PENALTY U/S. 271B OF THE ACT FOR NOT FILING TAX AUDIT REPORT WITHIN THE DUE DATE SPECIFIED UNDER THE ACT. BEING AGGRIEVED BY THE LEARNED CIT(A) ORDER, A SSESSEE IS IN APPEAL BEFORE US. 6. THE LEARNED AR FOR THE ASSESSE SUBMITTED THAT LE ARNED CIT(A) HAS ERRED IN CONFIRMING PENALTY LEVIED U/S.271B OF THE ACT WITHOUT APPRECIATING THE FACT THAT DELAY IN FILING OF TAX A UDIT REPORT WAS DUE TO DELAY IN AUDIT OF ACCOUNTS OF THE SOCIETY UNDER TAMIL NADU CO- OPERATIVE SOCIETIES ACT, 1983, WHICH WAS BEYOND THE CONTROL OF THE 5 ITA NO.1065/CHNY/2019 ASSESSE. THE LEARNED AR FURTHER SUBMITTED THAT ALTH OUGH, THERE IS A DELAY IN FILING TAX AUDIT REPORT, BUT SUCH RETURN W AS FILED BEFORE COMPLETION OF ASSESSMENT AND FURTHER REQUIREMENT O F E-FILING OF TAX AUDIT REPORT WAS INTRODUCED FOR THE FIRST TIME, FRO M ASSESSMENT YEAR 2013-14 WHICH HAS ITS OWN DIFFICULTIES AND DURING THIS TRANSITION PERIOD A LENIENT VIEW NEEDS TO BE TAKEN, WHEN IT C OMES TO LEVY OF PENALTY FOR FAILURE TO FILE TAX AUDIT REPORT AS REQ UIRED U/S. 44AB OF THE ACT. 7. THE LEARNED DR, ON THE OTHER HAND, SUPPORTIN G ORDER OF LEARNED CIT(A) SUBMITTED THAT REASONS GIVEN BY THE ASSESSEE THAT ACCOUNTS MANAGER WAS FORGET TO INFORM THE COMPUTER OPERATOR TO UPLOAD THE TAX AUDIT REPORT IN E-PORTAL OF THE DEPARTMENT WHIC H LEADS TO DELAY DOES NOT COME UNDER THE PURVIEW OF REASONABLE CAUSE AS PROVIDED U/S.273B OF THE ACT AND HENCE, LEARNED CIT(A) WAS RIGHT IN CONFIRMING PENALTY LEVIED U/S.271B OF THE ACT. 8. WE HAVE HEARD BOTH PARTIES, PERUSED THE MATERIA LS AVAILABLE ON RECORD AND GONE THROUGH ORDERS OF AUTHORITIES BE LOW. ADMITTEDLY, THERE IS A DELAY IN FILING AUDIT REPORT AS REQUIRED U/S.44AB OF THE ACT ELECTRONICALLY IN E-PORTAL PROVIDED FOR THIS PURPOS E. HOWEVER, THE SAID AUDIT REPORT HAS BEEN FILED ON 14.05.2014 MUCH BEFO RE COMPLETION OF 6 ITA NO.1065/CHNY/2019 ASSESSMENT ORDER ON 09.03.2016. THE ASSESSEE HAS GI VEN REASONS FOR NOT FILING AUDIT REPORT ELECTRONICALLY BEFORE T HE DUE DATE SPECIFIED UNDER THE ACT AND ACCORDING TO THE ASSESSE, SCHEME OF E-FILING WAS INTRODUCED FOR THE FIRST TIME FROM ASSESSMENT YEAR 2013-14 AND DUE TO THIS ASSESSEE HAS FACED DIFFICULTY IN UPLOADING AUDIT REPORT. WE HAVE GONE THROUGH REASONS GIVEN BY ASSESSEE FOR NO T FILING AUDIT REPORT ELECTRONICALLY WITHIN TIME ALLOWED UNDER TH E ACT FOR IMPUGNED ASSESSMENT YEAR AND FIND THAT SINCE SCHEME OF E-FI LING AUDIT REPORT WAS INTRODUCED FOR THE FIRST TIME FROM ASSESSMENT Y EAR 2013-14 AND E-PORTAL PROVIDED BY THE DEPARTMENT FOR THIS PURPOS E IS HAVING ITS OWN DIFFICULTIES, WHILE LEVYING PENALTY FOR BELATED FILING OF AUDIT REPORT, A LENIENT VIEW MUST BE TAKEN BY THE AUTHORITIES CON SIDERING INITIAL TRANSITION PERIOD, MORE PARTICULARLY, WHEN ASSESSEE HAS FILED SUCH AUDIT REPORT ELECTRONICALLY BEFORE COMPLETION OF A SSESSMENT PROCEEDINGS. IN THIS CASE, ON PERUSAL OF DETAILS F ILED BY THE ASSESSE, WE FIND THAT ALTHOUGH THERE IS A DELAY IN FILING OF AUDIT REPORT AS REQUIRED U/S.44AB OF THE ACT ELECTRONICALLY, BUT S UCH RETURN HAS BEEN FILED MUCH BEFORE THE DATE OF COMPLETION OF AS SESSMENT PROCEEDINGS. MOREOVER, AUDIT REPORT AS REQUIRED TO BE OBTAINED U/S.44AB WAS OBTAINED FROM AUDITORS ON 23.09.2013. THEREFORE, 7 ITA NO.1065/CHNY/2019 WHEN AUDIT REPORT WAS OBTAINED WITHIN DUE DATE, MERELY FOR DELAY IN FILING AUDIT REPORT IN E-PORTAL OF THE DEPARTMEN T CANNOT BE CONSIDERED AS DELIBERATE ATTEMPT MADE BY ASSESSEE F OR NOT FILING AUDIT REPORT SO AS TO IMPOSE PENALTY U/S.271B OF T HE ACT . THIS VIEW IS SUPPORTED BY THE DECISION OF ITAT., AHMEDABAD IN THE CASE OF HARISHBHAI BABUBHAI PATEL IN ITA NO.646/AHD/2016, WHERE THE TRIBUNAL, AFTER CONSIDERING RELEVANT FACTS HAS DEL ETED PENALTY LEVIED BY THE ASSESSING OFFICER FOR NON-SUBMISSION OF ELEC TRONIC AUDIT REPORT WITHIN THE DUE DATE ALLOWED UNDER THE ACT. HENCE, WE DIRECT THE ASSESSING OFFICER TO DELETE PENALTY LEVIED UNDE R SECTION 271B OF THE ACT FOR NON-SUBMISSION OF AUDIT REPORT WITHIN D UE DATE ALLOWED UNDER THE ACT. 9. IN THE RESULT, APPEAL FILED BY ASSESSEE IS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH DECEMBER, 2020 SD/- SD/- ( ) ( . ) (MAHAVIR SINGH) (G. MANJUNATHA ) / VICE-PRESIDENT $ / ACCOUNTANT MEMBER & /CHENNAI, ' /DATED 29 TH DECEMBER, 2020 DS )* +* /COPY TO: 1. APPELLANT 2. RESPONDENT 3. , () /CIT(A) 4. , /CIT 5. * 1 /DR 6. /GF .