Dedabhai Dayabhai Chorala, RAJKOT-GUJARAT V. The Income Tax Officer, Ward-1(1), RAJKOT-GUJARAT

ITA 110/RJT/2012

• Counselvise Citation: 11024914 RSA 2012
• Duration Of Justice: 2 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 26-06-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 27-03-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AVINASH KUMAR
• Assessee Lawyers: DR ADHIA
• Keywords: Reasonable cause

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBULAL, SMC BENCH, RAJKOT. . .. . . .. . , , , , BEFORE SHRI T. K. SHARMA, JM ITA NO. 110/RJT/2012. / ASSESSMENT YEAR 2008-09. DUDABHAI DAYABHAI CHORALA. AT: MUNGA VAVDI, TAL: GONDAL, POST: RIB, DISTRICT RAJKOT. PAN : BDPPS7679E. ( $/ APPELLANT) VS. THE INCOME TAX OFFICER, WARD-1(1), RAJKOT. %&$/ RESPONDENT ') / ASSESSEE BY SHRI D. R. ADHIA, A.R. ) / REVENUE BY SHRI. AVINASH KUMAR, D.R. ) / DATE OF HEARING 26-06-2012 ) / DATE OF PRONOUNCEMENT 26 - 06-2012 / / / / ORDER . .. . . . . . , , , , / T. K. SHARMA, J. M. THIS APPEAL BY THE ASSESSEE IS AGAINST THE ORDER DATED 23-01-2012 OF CIT(A)-I, RAJKOT CONFIRMING THE PENALTY OF RS.29,142/- LEVIED BY AO U/S.271B OF THE INCOME- TAX ACT, 1961 FOR THE ASSESSMENT YEAR 2008-09. 2. BRIEFLY STATED, THE FACTS ARE THAT FOR THE ASSES SMENT YEAR UNDER APPEAL, THE ASSESSEE FILED RETURN OF INCOME ON 08-09-2008 DECLA RING TOTAL INCOME OF RS.1,60,860/-. ON VERIFICATION OF THE SAME, AO NOT ICED THAT ASSESSEE HAS NOT MENTIONED AUDIT INFORMATION PRESCRIBED IN ITR-4 RET URN OF INCOME DESPITE THE RECEIPTS FOR THE ASSESSMENT YEAR UNDER APPEAL EXCEE DS RS.40,00,000/-. HE ACCORDINGLY, INITIATED PENALTY PROCEEDINGS U/S.271B . IN RESPONSE TO SHOW CAUSE ITA 110/RJT/2012 2 NOTICE ISSUED BEFORE LEVYING PENALTY U/S.271B, ASSE SSEE VIDE SUBMISSION DATED 22-06-2009 FILED THE FOLLOWING REPLY :- IT MAY PLEASE BE NOTED THAT WE HAVE CARRIED OUT THE AUDIT AS REQUIRED BY SECTION 44AB OF THE INCOME-TAX ACT FOR THE SAID ASSESSMENT YEAR BUT DUE TO CLERICAL ERROR ON THE PART OF RETUR N PREPARERS, THE DETAILS REGARDING AUDIT INFORMATION WAS FORGOTTEN TO BE MEN TIONED. WE HOPE THAT YOU WOULD UNDERSTAND THE SITUATION AND TAKE THE ACTUAL FACT FOR ARRIVING AT ANY CONCLUSION. 3. THE ASSESSING OFFICER REJECTED THE AFORESAID REP LY ON THE GROUND THAT ASSESSEE HAS NOT MENTIONED AUDIT INFORMATION PRESCR IBED IN ITR-4 RETURN OF INCOME. THEREFORE, HE LEVIED THE PENALTY OF RS.29,1 42/- U/S.271B OF THE ACT. ON APPEAL, IN THE IMPUGNED ORDER, THE LD. CIT(A) CONFI RMED THE SAID PENALTY FOR THE DETAILED REASON GIVEN IN PARA-3.2 WHICH READS AS UN DER:- 3.2. I HAVE CAREFULLY CONSIDERED THE OBSERVATIO NS OF THE ASSESSING OFFICER IN HIS PENALTY ORDER AND THE SUBMISSION OF THE APPELLANT. I HAVE ALSO GONE THROUGH THE COPY OF AUDIT REPORT FOR THE F.Y. 2007-08 AND IT IS NOTICED THAT THE AUDIT WAS CARRIED OUT BY M/S. JATI N CHUDASAMA & CO., CHARTERED ACCOUNTANTS, MAIN BAZAR, BAGASARA AND THE AUDIT REPORT WAS ISSUED ON 5/8/2008, I.E. BEFORE FILING OF RETURN ON 8/9/2008. THE TAX AUDIT REPORT U/S.44AB HAS TO BE FILED ALONG WITH THE RETU RN OF INCOME OF THE ASSESSEE. HOWEVER THE AUDIT REPORT MAY BE FILED FI RST BEFORE THE DUE DATE OF FILING EVEN IF THE RETURN OF INCOME IS NOT FILED , SO AS TO AVOID THE PENAL PROVISIONS OF SECTION 271B. IF THE TAX AUDIT REPOR T IS NOT FILED BEFORE THE DUE DATE OF FILING OF RETURN, THEN PENALTY WOULD BE LEVIED U/S.271B. W.E.F. 1-7-1995, THE LAW HAS BEEN AMENDED AND THE REQUIREM ENT U/S.44AB IS NOT ONLY TO GET THE ACCOUNTS AUDITED BEFORE THE SPE CIFIED DATE, BUT ALSO TO FURNISH SUCH AUDIT REPORT TO THE ASSESSING OFFICER . IN THE INSTANT CASE, THE AUDIT WAS STATED TO HAVE CARRIED OUT BEFORE FILING OF THE RETURN OF INCOME, HOWEVER IT IS CLAIMED THAT THE AU DIT INFORMATION WAS NOT MENTIONED IN THE PRESCRIBED ITR-4 DUE TO CLERICAL E RROR. BUT FACTS STILL REMAINS THAT AUDIT REPORT WAS NOT FILED DURING PENA LTY PROCEEDINGS BEFORE THE A.O. OR AT ANY JUNCTURE BEFORE THE DEPARTMENT. THE DEFAULT IS ALSO FOR NOT FILING BEFORE FILING OF RETURN OF INCOME OR ALO NG WITH THE RETURN OF INCOME. AS NO SUCH EVIDENCE IS AVAILABLE ON RECORD TO SUGGEST THAT APPELLANT HAS FILED AUDIT REPORT AT ANY POINT OF TI ME BEFORE THE A.O., THE APPELLANT IS HELD DEFAULTER FOR CONTRAVENTION OF TH E PROVISIONS OF SECTION 44AB OF THE ACT. FILING OF AUDIT REPORT BEFORE ME IS AN AFTERTHOUGHT. QUESTION IS WHY AUDIT REPORT DATED 5/8/2008 WAS NOT FILED BEFORE THE A.O. DURING THE PENALTY PROCEEDINGS WITH REPLY DTD.22/6/ 2009, IF IT WAS AVAILABLE WITH THE APPELLANT. SECONDLY, THIS WAS NOT DONE BY THE APPELLANT AS ITA 110/RJT/2012 3 PRESUMABLY NO AUDIT REPORT WAS AVAILABLE WITH HIM. IT IS ONLY DURING THE COURSE OF APPELLATE PROCEEDINGS ALMOST AFTER 2 YEA RS SUBMISSION OF AUDIT REPORT RAISES MANY QUESTIONS REGARDING ITS AUTHENTI CITY. FILING OF AUDIT REPORT DTD.5/8/2008 BEFORE ME ALSO AMOUNTS TO FILIN G OF ADDITIONAL & NEW EVIDENCE. NO REASONABLE CAUSE FOR NON-FURNISHING T HE SAME BEFORE THE A.O. IS EXPLAINED. HENCE SAME CANNOT BE ADMITTED U NDER RULE 46A ALSO. IN VIEW OF ALL ABOVE FACTS AND CIRCUMSTANCES OF CAS E THE PENALTY LEVIED BY THE A.O. AMOUNTING TO RS.29,142/- STANDS CONFIRMED. 4. AGGRIEVED WITH THE ORDER OF LD. CIT(A), THE ASSE SSEE IS IN APPEAL BEFORE THIS TRIBUNAL. 5. AT THE TIME OF HEARING BEFORE US, ON BEHALF OF T HE ASSESSEE, SHRI D.R. ADHIA, A.R. APPEARED AND FAIRLY ADMITTED THAT THROU GH INADVERTENCE, RELEVANT COLUMNS IN ITR-4 RETURN OF INCOME WERE NOT FILLED. HE SUBMITTED THAT TAX AUDIT REPORT WAS DULY OBTAINED ON 05-08-2008. HE SUBMITT ED THAT LOOKING TO THE TOTALITY OF THE FACTS AND CIRCUMSTANCES, BOTH THE DEPARTMENT AL AUTHORITIES BELOW SHOULD HAVE TAKEN A LENIENT VIEW. HE SUBMITTED THAT PENAL TY U/S.271B BE CANCELLED. AS AGAINST THIS, SHRI AVINASH KUMAR, D.R. APPEARED FOR THE REVENUE VEHEMENTLY SUPPORTED THE ORDER OF LD. CIT(A). HE SUBMITTED TH AT ASSESSEE IS REQUIRED TO FILE THE TAX AUDIT REPORT ALONG WITH THE RETURN OF INCOM E. SINCE THIS WAS NOT FURNISHED, PENALTY WAS RIGHTLY LEVIED. 6. AFTER HEARING BOTH THE SIDES, WE HAVE CAREFULLY GONE THROUGH THE ORDER OF AUTHORITIES BELOW. IT IS PERTINENT TO NOTE, BEFORE THE AO, ASSESSEE IN HIS REPLY DATED 22-06-09 HAS CLEARLY MENTIONED THAT AUDIT RE PORT WAS OBTAINED IN TIME BUT THE DETAILS REGARDING AUDIT INFORMATION WERE FORGOT TEN TO BE MENTIONED IN ITR-4. BE THAT IT MAY BE, PRIMA FACIE, IT APPEARS THAT ASS ESSEE HAS OBTAINED THE TAX AUDIT REPORT ON 05-08-2008, COPY OF WHICH WAS FILED BEFORE THE LD. CIT(A). IT IS ONLY THROUGH AN INADVERTENCE, THIS WAS NOT ENCLOSED WITH THE RETURN OF INCOME AND RELEVANT DETAILS OF THE SAME WERE NOT FURNISHED IN RELEVANT COLUMNS IN ITR-4. THE EXPLANATION OF THE ASSESSEE CANNOT BE REJECTED AS AFTERTHOUGHT BECAUSE THE AUDITOR M/S. JATIN CHUDASAMA & CO. HAS COMPLETED TH E AUDIT AND THE AUDIT REPORT WAS ISSUED ON 05-08-2008. I AM, THEREFORE, OF THE V IEW THAT LOOKING TO THE ITA 110/RJT/2012 4 PECULIAR FACTS OF THE CASE, BOTH THE DEPARTMENTAL A UTHORITIES SHOULD HAVE TAKEN A LENIENT VIEW. I, ACCORDINGLY, CANCEL THE PENALTY O F RS.29,142/- LEVIED U/S.271B OF THE INCOME-TAX ACT, 1961. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . THIS ORDER IS PRONOUNCED IN THE OPEN COURT ON THE D ATE MENTIONED HEREINABOVE. SD/- ( .. / T. K. SHARMA) /JUDICIAL MEMBER // ORDER DATE 26-06-2012 /RAJKOT ) )) ) %1 %1 %1 %1 21 21 21 21 / COPY OF ORDER FORWARDED TO:- 1. $ / APPELLANT-SHRI DUDABHAI DAYABHAI CHORALA, AT MUN GA VAVDI, TAL: GONGAL, POST: RIB, DISTRICT RAJKOT. 2. %&$ / RESPONDENT- THE INCOME TAX OFFICER, WARD-1(1), R AJKOT. 3. 7 / CONCERNED CIT-I, RAJKOT. 4. 7- / CIT (A)-I, RAJKOT. 5. 1 %, , / DR, ITAT, RAJKOT 6. / GUARD FILE. / BY ORDER , ASSTT. REGISTRAR , INCOME TAX APPELLATE TRIBUNAL, RAJKOT.