Sunil Daga, CHENNAI V. ITO, CHENNAI

ITA 1207/CHNY/2016

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4002 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-11-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 25-10-2016
• Assessment Year: 2011-2012
• Appeal Filed On: 03-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTHJCIT
• Assessee Lawyers: D ANAND
• Keywords: Reasonable cause
• Section: 143(3); 27

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI . . . , .. ' #$, & '( BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI D.S. SUNDER SINGH, ACCOUNTANT MEMBER ./ ITA NO. 1207/MDS/2016 * +* / ASSESSMENT YEAR : 2011-12 MR. SUNIL DAGA, C/O D. MOHNOT & CO., CHARTERED ACCOUNTANTS, NO.28, OLD NO.38, COLLEGE ROAD, NUNGAMBAKKAM, CHENNAI - 600 034. PAN : AADPD 7041 H V. THE INCOME TAX OFFICER, NON-CORPORATE WARD 5(1), CHENNAI - 600 006. (-./ APPELLANT) (/0-./ RESPONDENT) -. 1 2 / APPELLANT BY : SHRI D. ANAND, ADVOCATE /0-. 1 2 / RESPONDENT BY : SHRI A.V. SREEKANTH, JCIT ' 1 3& / DATE OF HEARING : 25.10.2016 45+ 1 3& / DATE OF PRONOUNCEMENT : 23.11.2016 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -5, CHENNA I, DATED 10.03.2016 AND PERTAINS TO ASSESSMENT YEAR 2011-12, CONFIRMING THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER S ECTION 271B OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2 I.T.A. NO.1207/MDS/16 2. SHRI D. ANAND, THE LD.COUNSEL FOR THE ASSESSEE, SUBMITTED THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS OF SAL E OF TARPAULIN IN THE NAME AND STYLE OF M/S RAIN SEAL TARPAULINE, CHE NNAI. THE ASSESSEE IS ALSO DOING THE SAME BUSINESS IN THE NAM E AND STYLE OF M/S RAJKAMAL ENTERPRISE. DUE TO SICKNESS OF THE AS SESSEES FATHER, THE ASSESSEE COULD NOT CONCENTRATE ON THE BUSINESS. SINCE THE ASSESSEES FATHER WAS RELUCTANT TO TAKE ALLOPATHIC TREATMENT, AYURVEDIC TREATMENT WAS GIVEN TO HIM AT HOME. DUE TO THIS, THERE WAS DELAY IN FINALIZATION OF ACCOUNTS. ACCORDING T O THE LD. COUNSEL, EVEN THOUGH DUE DATE FOR FILING THE AUDIT REPORT WA S ON 30.09.2011, IN FACT, THE AUDIT REPORT WAS OBTAINED ONLY ON 17.0 1.2013. ADMITTEDLY, ON THE VERY SAME DAY, THE ASSESSEE FILE D THE RETURN OF INCOME ALONG WITH THE AUDIT REPORT. THE ASSESSMENT ORDER ALSO PASSED UNDER SECTION 143(3) OF THE ACT ON 31.03.201 4 ACCEPTING THE RETURN FILED BY THE ASSESSEE. THEREFORE, ACCOR DING TO THE LD. COUNSEL, THERE IS NO IMPEDIMENT FOR THE ASSESSING O FFICER TO COMPLETE THE ASSESSMENT. IN FACT, THE AUDIT REPORT WAS VERY MUCH AVAILABLE BEFORE THE ASSESSING OFFICER WHEN THE RET URN WAS TAKEN UP. HENCE, ACCORDING TO THE LD. COUNSEL, THERE WAS REASONABLE CAUSE ON THE PART OF THE ASSESSEE FOR NOT FURNISHIN G AUDIT REPORT 3 I.T.A. NO.1207/MDS/16 WITHIN THE DUE DATE PROVIDED UNDER THE ACT. THEREF ORE, ACCORDING TO THE LD. COUNSEL, THE LEVY OF PENALTY IS NOT JUSTIFI ED. 3. ON THE CONTRARY, SHRI A.V. SREEKANTH, THE LD. DE PARTMENTAL REPRESENTATIVE, SUBMITTED THAT IT WAS FOR THE ASSES SEE TO OBTAIN THE AUDIT REPORT ON OR BEFORE 30.09.2011 AND FILE THE S AME ALONG WITH RETURN OF INCOME WITHIN THE DUE DATE. ADMITTEDLY, ACCORDING TO THE LD. D.R., THE AUDIT REPORT WAS NOT OBTAINED, THEREF ORE, THE ASSESSING OFFICER HAS RIGHTLY LEVIED PENALTY UNDER SECTION 27 1B OF THE ACT. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND PERUSED THE RELEVANT MATERIAL AVAILABLE ON RECORD. ADMITTEDLY, THE DATE FOR FILING OF AUDIT REPORT WAS 30.09.2011. TH E ASSESSEE CLAIMS THAT HIS FATHER WAS TAKING AYURVEDIC TREATMENT, THE REFORE, HE COULD NOT CONCENTRATE ON THE BUSINESS OF THE ASSESSEE. T HIS FACT WAS NOT CONTROVERTED BY THE DEPARTMENT. IT IS NATURAL THAT WHEN THE FATHER WAS TAKING TREATMENT AND RELUCTANT TO TAKE ALLOPATH IC MEDICINES, THE ASSESSEE BEING THE SON, COULD NOT CONCENTRATE ON TH E BUSINESS. THEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINI ON THAT THERE IS A REASONABLE CAUSE ON THE PART OF THE ASSESSEE FOR NO T FINALIZING THE ACCOUNT WITHIN THE DUE DATE PROVIDED UNDER THE ACT. HOWEVER, ADMITTEDLY, THE ASSESSEE OBTAINED THE AUDIT REPORT ON 17.01.2013 AND THE SAME WAS ALSO FILED BEFORE THE ASSESSING OF FICER ALONG WITH 4 I.T.A. NO.1207/MDS/16 RETURN ON 17.01.2013. IN FACT, THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS COMPLETED ON 31.03.2014 WITHOUT ANY ADDITION. IN OTHER WORDS, THE RETURN WAS ACCEPTED BY THE ASSESSI NG OFFICER. IN THOSE CIRCUMSTANCES, AS RIGHTLY SUBMITTED BY THE LD .COUNSEL FOR THE ASSESSEE, THERE WAS NO IMPEDIMENT FOR THE ASSESSING OFFICER TO COMPLETE THE ASSESSMENT. THE VERY OBJECT OF FILING THE AUDIT REPORT ALONG WITH THE RETURN OF INCOME IS ONLY TO ASSIST T HE ASSESSING OFFICER TO DETERMINE THE CORRECT TAXABLE INCOME. T HEREFORE, THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT LEVY OF PENALTY UNDER SECTION 271B OF THE ACT IS NOT JUSTIFIED. ACCORDIN GLY, THE ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE AND THE PENALTY LEVIED BY THE ASSESSING OFFICER IS DELETED. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED ON 23 RD NOVEMBER, 2016 AT CHENNAI. SD/- SD/- ( . . ' #$ ) ( . . . ) (D.S. SUNDER SINGH) (N.R.S. GANESAN) & / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 7 /DATED, THE 23 RD NOVEMBER, 2016. KRI. 5 I.T.A. NO.1207/MDS/16 1 /3#8 98+3 /COPY TO: 1. -. /APPELLANT 2. /0-. /RESPONDENT 3. ' :3 () /CIT(A)-5, CHENNAI 4. PRINCIPAL CIT-9, CHENNAI 5. 8; /3 /DR 6. * < /GF.