Apoorva Medical & Surgical Agencies , Mahboobnagar V. Income Tax Officer, Ward-2, Mahboobnagar

ITA 1430/Hyd/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0507 (ITAT-HYDERABAD)
• Duration Of Justice: 1 year(s) 9 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 01-07-2021
• Assessment Year: 2015-2016
• Appeal Filed On: 17-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause
• Section: 273B; 143(1); 143(2); 139(1); 271B; 44AB

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCH SMC, HYDERABAD BEFORE SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ITA NO.1430/HYD/2019 AY: 2015 - 16 APOORVA MEDICAL & SURGICAL AGENCIES, MAHABOOBNAGAR, TELANGANA - 509001. PAN: AANFA 4258 M VS. INCOME TAX OFFICER, WARD - 2, MAHABOOB NAGAR. (APPELLANT) (RESPONDENT) ASSESSEE BY: SRI MOHD. AFZAL REVENUE BY: SRI A.P. BABU, DR DATE OF HEARING: 01/07/2021 DATE OF PRONOUNCEMENT: 15 /07/2021 ORDER PER A. MOHAN ALANKAMONY, AM.: THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE ORDER OF THE LD. CIT (A) - 4, HYDERABAD IN APPEAL NO. 4/10393/18 - 19/W - 2, MAHABUBNAGAR/CIT(A) - 4/HYD/19 - 20, DATED 28/06/2019 PASSED U/S. 271B R.W.S 250(6) OF THE ACT FOR TH E AY 2015 - 16. 2. THE ASSESSEE HAS RAISED SIX GROUNDS IN ITS APPEAL HOWEVER, THE CRUX OF THE ISSUE IS THAT : T HE LD. CIT(A) HAS ERRED IN SUSTAINING THE LEVY OF PENALTY AMOUNTING TO RS. 1,50,000/ - BY THE LD. A.O. INVOKING THE PROVISIONS OF SECTION 271B OF THE ACT. 2 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE IS A FIRM ENGAGED IN THE BUSINESS OF W HOLESALE PHARMACEUTICAL DISTRIBUTION. THE ASSESSEE FILED ITS RETURN OF INCOME FOR T HE AY 2015 - 16 ON 11/02/2017 DECLARING TOTAL INCOME OF RS. 1,90,480/ - . THE RETURN WAS PROCESSED U/S. 143(1) AND THE ASSESSEES CASE WAS TAKEN UP FOR SCRUTINY UNDER CASS BY ISSUE OF NOTICE U/S. 143(2) OF THE ACT. DURING THE SCRUTINY PROCEEDINGS, IT WAS OBSE RVED BY THE LD. A.O. THAT THE ASSESSEE HAS NOT FILED ITS AUDIT REPORT WITHIN THE SPECIFIED TIME LIMIT IE., ON OR BEFORE 31 /10/201 5 . SINCE THERE WAS DELAY IN FILING THE AUDIT REPORT AND IN THE ABSENCE OF JUSTIFIABLE COGENT REASONS FOR THE DELAY, THE LD. A.O LEVIED PENALTY INVOKING THE PROVISIONS OF SECTION 271B OF THE ACT @ 0.5% OF THE GROSS TURNOVER OF RS. 3,10,75,357/ - WHICH WORKS OUT TO RS.1,55,376/ - [ROUNDED OFF TO RS. 1,50,000/ - ] . AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE LD. CIT(A). 4. BEFORE THE LD. CIT (A) , THE ASSESSEE MADE DETAILED SUBMISSIONS CITING THE REASONS FOR THE DEL A Y IN OBTAINING THE AUDIT REPORT IE., BEYOND 31/10/2015 AND BELATED FILING OF THE AUDIT REPORT U/S. 44AB OF THE ACT. THE RELEVANT PORTION OF THE ASSESSEES SUBMISSIONS IS EXTRACTED BY THE CIT (A) IN PARA 7 OF HIS ORDER. HOWEVER, T HE LD. CIT (A) DID NOT CONSIDER THE SUBMISSION S OF THE ASSESSEE AND DISMISSED THE APPEALS OF THE ASSESSEE BY AGREEING WITH THE VIEW TAKEN BY THE LD. AO. AGGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. 3 5 . AT THE OUTSET, LD. AR SUBMITTED BEFORE US THAT THE RE WAS AN INTERNAL DISPUTE AMONG THE PARTNERS OF THE FIRM WHICH CAUSED THE DELAY IN FINALIZATION OF ACCOUNTS BEYOND THE PERIOD SPECIFIED U/S. 139(1) OF THE ACT. FURTHER D URING THE RELEVANT ASSESSMENT YEAR, THE ASSESSEE HAD FACED DIFFICULT IES IN ITS BUSINES S BECAUSE OF DISPUTES AMONG THE PARTNERS AND MOREOVER THE ACCOUNTANT OF THE ASSESSEE - FIRM LEFT HIS JOB A SSUMING THAT THE BUSINESS OF THE FIRM MAY COLLAPSED. IT WAS FURTHER SUBMITTED THAT I N VIEW OF THESE FACTS THE ASSESSEE WAS UNABLE TO CO - ORDINATE WITH THE AUDITORS OFFICE IN TIME AND THEREFORE, THE AUDIT COULD NOT BE COMPLETED WITHIN THE STIPULATED TIME AND THUS THERE WAS DELAY IN FILING THE AUDIT REPORT. FURTHER, LD. AR SUBMITTED THAT SUBSEQUENTLY THE ASSESSEE FILED ITS RETURN OF INCOME AND AUDIT REPORT U/S. 44AB OF THE ACT FOR THE RELEVANT AY ON 2 3 /0 1 /2017 WELL BEFORE THE END OF THE ASSESSMENT PROCEEDINGS . HOWEVER, WITHOUT CONSIDERING THE EXPLANATION OF THE ASSESSEE THE LD. AO AS WELL AS THE LD. CIT(A) IMPOSED / SUSTAIN ED THE PENALTY. THE LD. AR FURTHER PLEADED BEFORE US THAT NON - FILING OF THE AUDIT REPORT WITHIN THE STIPULATED TIME WAS BEYOND THE CONTROL OF THE ASSESSEE HENCE A LENIENT VIEW MAY BE TAKEN AND GRANT RELIEF TO THE ASSESSEE. THE LD. DR VEHEMENTLY RELIED ON THE ORDERS OF THE LD. REVENUE AUTHORITIES AND PLEADED FOR CONFIRMING THEIR ORDERS. 6 . I HAVE HEARD THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE MATERIALS ON RECORD. ON PERUSING THE FACTS OF THE CASE, I FIND THAT THE ASSESSEE HA D A REASONABLE CAUSE FOR THE DELAY IN FILING THE AUDIT REPORT. 4 MOREOVER, HE HAD FILED THE AUDIT REPORT WELL BEFORE THE COMPLETION OF THE ASSESSMENT PROCEEDINGS AS THE DATE OF THE ASSESSMENT ORDER IS 15/12/2017 . THEREFORE, I AM OF THE CONSIDERED OPINION THAT PENAL ACTION U/S. 271B OF THE ACT IN THE CASE OF THE ASSESSEE WOULD NOT BE APPROPRIATE . HENCE, TAKING STRENGTH FROM SECTION 273B OF THE ACT, I HEREBY DELETE THE PENALTY LEVIED ON THE ASSESSEE FOR RS. 1,50,000/ - INVOKING THE PROVISIONS OF SECTION 271B OF THE ACT. IT IS ORDERED ACCORDINGLY . 7. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON THE 15 TH JULY, 2021. SD / - ( A. MOHAN ALANKAMONY ) ACCOUNTANT MEMBER HYDERABAD, DATED: 15 TH JULY, 2021. OKK COPY TO: - 1. APOORVA MEDICAL & SURGICAL AGENCIES C/O. MOHD. AFZAL, ADVOCATE, 402, SHERSONS RESIDENCY, 11 - 5 - 465, CRIMINAL COURT ROAD, RED HILLS, HYDERABAD 04. 2. INCOME TAX OFFICER, WARD - 2, BHASKARA TOWERS, SRINIVASANAGARA COLONY, MAIN ROAD, YENUGONDA, MAHABOOB NAGAR. 3. THE CIT (A) - 4, HYDERABAD. 4. THE PR. CIT - 4, HYDERABAD. 5. THE DR, ITAT, HYDERABAD. 6. GUARD FILE.