Syed Jaffer Hussain, Prop: Jaffar Saw Mill, Hyderabad V. Income Tax Officer, Karimnagar

ITA 1406/HYD/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 74483 (ITAT-HYDERABAD)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 28-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P BALAKRISHNA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH A, HYDERABAD BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI SAKTIJIT DEY, JUDICIAL MEMBER ITA NO. 1406/HYD/2013 ASSESSMENT YEAR: 2009-10 SYED JAFFER HUSSAIN, PROP. JAFFER SAW MILL, APPELLANT HYDERABAD. (PAN AJKPJ1426E) VS. INCOME-TAX OFFICER, RESPONDENT WARD - 3, KARIMNAGAR. APPELLANT BY : SHRI P. BALAKRISHNA RESPONDENT BY : SMT. K. HARITHA DATE OF HEARING : 20/02/2014 DATE OF PRONOUNCEMENT : 20/02/2014 ORDER PER CHANDRA POOJARI, A.M.: THIS APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A)-III HYDERABAD DATED 12/09/2013 FOR THE ASSESSMENT YEAR 2009-10. 2. THE ONLY GRIEVANCE IN THIS APPEAL BY THE ASSESSE E IS THAT LEVY PENALTY U/S 271B OF THE IT ACT. 3. BRIEFLY, THE FACTS ARE THAT FOR THE AY 2009-10, THE ASSESSEE FILED HIS RETURN OF INCOME ON 24/09/2010. SINCE THE SALES WERE MORE THAN RS. 40 LAKHS, THE ASSESSEE WAS UNDER OBLIGATION TO GET THE BOOKS OF ACCOUNT AUDITED AND FURNISH THE REPORT WITHIN THE D UE DATE WHICH WAS 2 ITA NO. 1406/H/13 SYED JAFFER HUSSAIN 30/09/2009. THE RETURN OF INCOME WAS ALSO TO BE FIL ED ON THAT BASIS. HOWEVER, THERE WAS A DELAY OF ALMOST ONE YEAR IN FI LING THE RETURN AND IN FILING THE AUDIT REPORT WHICH WAS MANDATORY U/S 44AB. ACCORDINGLY, THE AO IMPOSED THE PENALTY U/S 271B OF THE ACT. 4. BEFORE THE CIT(A), THE ASSESSEE ARGUED THAT REPO RT WAS READY ON 28 TH SEPTEMBER, 2009, BUT HE COULD NOT COLLECT THE SAME AS HE FELT SICK DUE TO VIRAL FEVER. FURTHER, IT WAS SUBMITTED THAT TCS CONFIRMATIONS WERE NOT RECEIVED FROM NSDL AND ONLY WHEN CLEARANCE WAS RECEIVED FROM NSDL THAT THE ASSESSEE FILED ITS REPORT AND THE RETURN OF INCOME. 5. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSE E, THE CIT(A) CONFIRMED THE PENALTY LEVIED BY THE AO U/S 271B BY OBSERVING AS UNDER: 4.1 I HAVE SEEN CAREFULLY THE FACTS AND EVIDENCE. F IRST OF ALL TO FILE THE AUDIT REPORT, CLEARANCE OF NSDL IS NOT REQ UIRED. IT IS NOT UNDERSTOOD AS TO HOW SUCH AN ISSUE AFFECTED THE ABI LITY OF THE APPELLANT TO FILE THE RETURN OF INCOME IN TIME ALON G WITH THE STATUTORY AUDIT REPORT. SECONDLY, THE APPELLANT HAS NOT SPECIFIED AT ALL AT ANY PLACE AS TO WHAT WERE THE DETAILS WHI CH HAD NOT BEEN UPLOADED AND WERE NOT BEING DISPLAYED BY THE N SDL. WHAT WAS THE DEFAULT OF THE NSDL IS NOT KNOWN AND W HEN WAS THE DEFAULT IF ANY CORRECTED IS ALSO NOT KNOWN. THE RE IS NO EVIDENCE IN THIS EXPLANATION GIVEN BY THE APPELLANT . I ALSO FIND THAT THE VIRAL FEVER COULD AT BEST EXPLAIN THE DELA Y OF 2 WEEKS. BUT IN THIS CASE THE DELAY IS ALMOST OF ONE YEAR, W HICH CANNOT BE EXPLAINED BY THE CAUSES GIVEN BY THE APPELLANT. IN ANY CASE FILING OF RETURN OF INCOME AND OF THE STATUTORY AUD IT REPORT HAVE NOTHING TO DO WITH THE NSDL. 6. BEFORE US, THE LEARNED AR SUBMITTED THAT THE ASS ESSEE HAS FILED RETURN OF INCOME ON 24/09/2010 AND THE ASSESSMENT W AS COMPLETED BY THE ASSESSING OFFICER U/S 143(3) ON 19/12/2011 A ND LATER ON THE ASSESSING OFFICER LEVIED PENALTY U/S 271B OF THE AC T ON THE REASON THAT THE ASSESSEE HAS NOT FILED TAX AUDIT REPORT U/ S 44AB OF THE ACT BEFORE THE DUE DATE I.E. ON 30/09/2009, THOUGH, THE RETURN WAS FILED ELECTRONICALLY ON 24/09/2010. FURTHER, THE LEARNED AR SUBMITTED THAT 3 ITA NO. 1406/H/13 SYED JAFFER HUSSAIN THOUGH THE REPORT WAS READY ON 28/09/2009, THE SAME COULD NOT BE COLLECTED BY THE ASSESSEE DUE TO SICKNESS. HOWEVER, HE POINTED OUT THAT THE TCS CONFIRMATION WAS NOT RECEIVED FROM THE NSDL AND WHEN CLEARANCE WAS RECEIVED FROM THE NSDL THE ASSESSEE F ILED AUDIT REPORT. HE CONTENDED THAT THE CIT(A) WITHOUT APPR ECIATING THE FACTS ON RECORD CONFIRMED THE PENALTY LEVIED BY THE ASSES SING OFFICER, THEREFORE, THE ORDER OF THE CIT(A) MAY BE SET ASIDE . 7. ON THE OTHER HAND, THE LEARNED DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 8. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL ON RECORD. WE FIND THAT THE ASSESSEE HAVING OBTAINED T HE AUDIT REPORT U/S 44AB BEFORE THE SPECIFIED DATE AND FURNISHED THE SA ME BEFORE THE ASSESSING OFFICER BEFORE COMPLETION OF ASSESSMENT U /S 143(3) OF THE ACT AND THE DEPARTMENT CANNOT HAVE ANY GRIEVANCE IN THIS REGARD. THE ISSUE IN DISPUTE IS SQUARELY COVERED BY THE JUD GMENT OF HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE OF CIT VS . K.K. SPUN PIPE, 284 ITR 301 (P&H) WHEREIN IT WAS HELD AS FOLL OWS: THE TRIBUNAL WAS RIGHT IN LAW IN CANCELLING THE PEN ALTIES IMPOSED ON THE ASSESSEE U/S 271B ON THE GROUND THAT PENALTIES WERE NOT EXIGIBLE IN A CASE WHERE THE AUDIT REPORT U/S 44AB HAD BEEN OBTAINED ON OR BEFORE THE SPECIFIED DATE AND T HE SAME WAS FILED ALONG WITH A RETURN OTHER THAN A RETURN U /S 139(1) AND NO NOTICE HAD BEEN ISSUED TO THE ASSESSEE BY THE AS SESSING OFFICER U/S 142(1)(I). 9. RESPECTFULLY FOLLOWING THE SAID DECISION OF THE HONBLE P&H HIGH COURT, WE SET ASIDE THE ORDER OF THE CIT(A) AN D CANCEL THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271B OF THE ACT, AND ALLOW THE GROUNDS OF APPEAL OF THE ASSESSEE. 4 ITA NO. 1406/H/13 SYED JAFFER HUSSAIN 10. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWE D. PRONOUNCED IN THE OPEN COURT ON 20/02/2014. SD/- SD/- (SAKTIJIT DEY) (CHANDRA POOJARI ) JUDICIAL MEMBER ACCOUNTANT MEMBER HYDERABAD, DATED: 20/02/2014. KV COPY TO:- 1) SYED JAFFER HUSSAIN, 103-335 3/2 RT, VIJAYANAGA R COLONY, HYDERABAD 57 2) ITO, WARD 3, AAYAKAR BHAVAN, KARIMNAGAR. 3) CIT(A)-III, HYDERABAD 4) CIT-II, HYDERABAD 5) THE DEPARTMENTAL REPRESENTATIVE, I.T. A.T., HYDERABAD.