Dinesh Patel, Pondicherry V. DCIT, Pondicherry

ITA 1484/CHNY/2016

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 6197 (ITAT-CHENNAI)
• Duration Of Justice: 1 year(s) 3 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 03-07-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 25-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ANN MARRY BA
• Assessee Lawyers: V S JAYAKUMAR
• Keywords: Reasonable cause

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH: CHENNAI , # , ' ( BEFORE SHRI SANJAY ARORA, ACCOUNTANT MEMBER AND SHRI GEORGE MATHAN, JUDICIAL MEMBER ./ ITA NOS.1484 & 2833/MDS/2016 '# # /ASSESSMENT YEAR: 2011-12 SHRI DINESH PATEL, NO.7, SATHANI STREET, KOSAPALAYAM, PONDICHERRY-605 013. VS. THE DY. COMMISSIONER OF- INCOME TAX, PONDICHERRY CIRCLE, INCOME TAX DEPARTMENT, MAHATMA GANDHI ROAD, PONDICHERRY-605 003. [PAN: AGDPD 0324 M ] ( * /APPELLANT) ( +,* /RESPONDENT) * - / APPELLANT BY : MR.V.S.JAYAKUMAR, ADV. +,* - /RESPONDENT BY : MS.ANN MARRY BABY, JCIT - /DATE OF HEARING : 11.09.2017 - /DATE OF PRONOUNCEMENT : 12.09.2017 / O R D E R PER GEORGE MATHAN , JUDICIAL MEMBER : ITA NO.1484/MDS/2016 IS AN APPEAL FILED BY THE ASS ESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), PUDUCHERRY, IN ITA NO.603/CIT(A)-PDY/2013-14 DATED 15.03.2016 FOR THE AY 2011-12 AGAINST THE CONFIRMATION OF PENALTY U/S.271B OF THE IT ACT, 1961. 2. ITA NO.2833/MDS/2016 IS AN APPEAL FILED BY THE A SSESSEE AGAINST THE ORDER OF COMMISSIONER OF INCOME TAX (APPEALS), PUDUCHERRY, IN ITA NO.603/CIT(A)-PDY/2013-14(R) DATED 19.07.2016 FOR T HE AY 2011-12 ITA NOS.1484 & 2833/MDS/2016 :- 2 -: AGAINST THE DISMISSAL OF THE RECTIFICATION APPLICAT ION IN RESPECT OF PENALTY LEVIED U/S.271B OF THE IT ACT, 1961. 3. AS THE ISSUES IN BOTH THE APPEALS ARE INTER-CONN ECTED, COMMON AND RELATES TO THE SAME ASSESSEE, BOTH ARE DISPOSED OF BY THIS COMMON ORDER. 4. MS.ANN MARRY BABY, JCIT, REPRESENTED ON BEHALF O F THE REVENUE AND SHRI V.S.JAYAKUMAR, ADV. REPRESENTED ON BEHALF OF T HE ASSESSEE. 5. IT WAS SUBMITTED BY THE LD.AR THAT THE ASSESSEE IS IN THE BUSINESS OF MANUFACTURING AND SALE OF WOODEN DOORS, WINDOWS AND FURNITURE AND WHOLESALE AND RETAIL SALES OF LOG AND SIZES. IT WAS A SUBMISSION THAT THERE WAS A SURVEY ON THE PREMISES OF THE ASSESSEE ON 16.09.2011. A STATEMENT WAS RECORDED FROM THE ASSESSEE IN RESPECT OF STOCK HELD BY THE ASSESSEE. IT WAS A SUBMISSION THAT THE STATEMENT W AS NOT GIVEN TO THE ASSESSEE AND CONSEQUENTLY THE ASSESSEE HAD MADE AN APPLICATION FOR THE COPY OF THE STATEMENT ON 21.09.2011 ALONG WITH CHAL LAN FOR RS.100/-. THE LD.AR DREW OUR ATTENTION TO PAGE NOS.2 & 3 OF THE P APER BOOK WHICH IS A COPY OF THE REQUISITION ALONG WITH THE CHALLAN. IT WAS A SUBMISSION THAT AS THE STATEMENT WAS NOT RECEIVED, THE ASSESSEE HAD FI LED A SECOND LETTER ALONG WITH THE CHALLAN FOR ANOTHER RS.100/- ON 26.1 1.2012 AND THE STATEMENT WAS GIVEN TO THE ASSESSEE ON 27.11.2012. THE COPIES OF THE REQUISITION LETTERS ALONG WITH THE CHALLAN WERE SHO WN AT PAGE NOS.4 & 5 OF THE PAPER BOOK AND THE COPIES OF THE LETTER OF THE AO AND STATEMENT WERE ITA NOS.1484 & 2833/MDS/2016 :- 3 -: SHOWN AT PAGE NOS.6 TO 11 OF THE PAPER BOOK. IT WA S A SUBMISSION THAT AS THE AUDITOR OF THE ASSESSEE HAD REQUIRED COPY OF TH E STATEMENT RECORDED AT THE TIME OF SURVEY, THE AUDIT OF THE ASSESSEE WA S DELAYED. IT WAS A SUBMISSION THAT THE DUE DATE FOR THE AUDIT REPORT W AS 30.09.2011. HOWEVER, THE AUDIT WAS DONE ONLY ON 21.05.2012 AND WAS FILED ALONG WITH RETURN ON 31.05.2012. IT WAS A SUBMISSION THAT ONL Y ON ACCOUNT OF THE DELAY IN GETTING THE COPY OF THE STATEMENT RECORDED IN THE COURSE OF THE SURVEY, THERE WAS A DELAY IN GETTING THE ACCOUNTS A UDITED. IT WAS A SUBMISSION THAT AS THE STATEMENT RECORDED FROM THE ASSESSEE WAS NOT AVAILABLE, THE AUDIT HAS BEEN DELAYED AND SUBSEQUEN TLY AS IT WAS GETTING SUBSTANTIAL DELAYED, THE ASSESSEE HAD REQUESTED THE AUDITOR TO COMPLETE THE AUDIT WITHOUT THE STATEMENT RECORDED, BASED ON THE BOOKS OF ACCOUNTS MAINTAINED BY THE ASSESSEE, WHICH HAD BEEN DONE. I T WAS A SUBMISSION THAT THERE WAS NO DELAY IN RESPECT OF THE FILING OF THE RETURN AND OBTAINING THE AUDIT REPORT IN ANY OF THE EARLIER YEARS OR IN ANY OF THE SUBSEQUENT YEARS. IT WAS A SUBMISSION THAT THE AUDIT REPORT W AS ALSO AVAILABLE WITH THE AO WHEN COMPLETING THE ASSESSMENT AND THE DELAY WAS ONLY ON TECHNICAL BREACH. IT WAS A SUBMISSION THAT ON ACCO UNT OF THE DELAY IN FILING OF THE AUDIT REPORT, THE AO HAD LEVIED THE P ENALTY U/S.271B OF THE ACT, WHICH WAS ALSO CONFIRMED BY THE LD.CIT(A). IT WAS A SUBMISSION THAT THE LD.CIT(A) DID NOT ACCEPT THE FACT THAT THE ASSE SSEE HAD FILED ITS FIRST REQUISITION ON 21.09.2011. IT WAS A SUBMISSION THA T THE LD.CIT(A) HAD DISMISSED THE ASSESSEES APPEAL BY HOLDING THAT THE REQUISITION WAS MADE ONLY ON 27.11.2012 WHICH WAS MUCH AFTER FILING OF T HE RETURN OF INCOME ITA NOS.1484 & 2833/MDS/2016 :- 4 -: ALONG WITH AUDIT REPORT AND CONSEQUENTLY THE NON-AV AILABILITY OF THE STATEMENT RECORDED IN THE COURSE OF THE SURVEY COUL D NOT BE CONSIDERED AS A REASONABLE CAUSE. IT WAS A SUBMISSION THAT AFTER THE ORDER OF THE LD.CIT(A), A RECTIFICATION APPLICATION HAD BEEN FIL ED WHEREIN THE PROOF OF SUBMITTING THE APPLICATION ALONG WITH THE CHALLAN O N 21.09.2011 WAS PRODUCED BEFORE THE LD.CIT(A) IN AN APPLICATION U/S .154 WHICH WAS ALSO REJECTED BY THE LD.CIT(A) AGAINST WHICH THE APPEAL IN ITA NO.2833/MDS/2016 HAD BEEN FILED. IT WAS A SUBMISSI ON THAT THERE WAS A REASONABLE CAUSE FOR THE DELAY IN OBTAINING THE AUD IT REPORT AND FILING THE SAME WITH THE RETURN OF INCOME. IT WAS A FURTHER S UBMISSION THAT THE DELAY WAS ONLY A VENIAL BREACH AND NOT A CONTUMACIO US CONDUCT. IT WAS A SUBMISSION THAT THE PENALTY AS LEVIED MAY BE DELETE D. 6. IN REPLY, THE LD.DR VEHEMENTLY SUPPORTED THE ORD ER OF THE LD.CIT(A). IT WAS A SUBMISSION THAT THE ASSESSEE H AD FILED THE RETURN ON 31.05.2012 AND THE AUDIT REPORT IS DATED 21.05.2012 AND THE STATEMENT HAD BEEN GIVEN TO THE ASSESSEE ONLY ON 27.11.2012. IT WAS A SUBMISSION THAT THE NON-AVAILABILITY OF THE STATEMENT RECORDED COULD NOT BE CONSIDERED AS A REASONABLE CAUSE FOR THE DELAY IN O BTAINING THE AUDIT REPORT. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PER USAL OF THE STATEMENT RECORDED FROM THE ASSESSEE IN THE COURSE OF THE SURVEY CLEARLY SHOWS THAT THE STATEMENT OF ACCOUNTS OF THE ASSESSE E AND HIS GROUP ITA NOS.1484 & 2833/MDS/2016 :- 5 -: CONCERNS WERE AVAILABLE IN THE COMPUTER IN THE COUR SE OF THE SURVEY. FURTHER, IN REPLY TO QUESTION NO.7, THERE ARE DEFEC TS IN THE COMPUTERIZED STATEMENT WHICH HAVE ALSO BEEN POINTED OUT. THE QU ESTION REGARDING THE STOCK HAS ALSO BEEN RAISED IN THE STATEMENT RECORDE D. HOWEVER, INTERESTINGLY NO STOCK HAS BEEN TAKEN IN THE COURSE OF THE SURVEY. THE SURVEY SEEMS TO BE CONDUCTED IN RESPECT OF CERTAIN LAND PURCHASES DONE BY THE ASSESSEE, THOUGH, STATEMENTS IN RESPECT OF T HE ASSESSEES BUSINESS AND STOCK HAS ALSO BEEN RAISED. ADMITTEDLY, IN STA TEMENT RECORDED FROM THE ASSESSEE IT IS INCUMBENT THAT THE COPY OF SUCH STATEMENT BE IMMEDIATELY GRANTED TO THE ASSESSEE. ADMITTEDLY, T HE STATEMENT HAD NOT GRANTED TO THE ASSESSEE TILL 27.11.2012. IT IS ALS O AN ADMITTED FACT THAT THE ASSESSEE HAS MADE AN APPLICATION ON 21.09.2011 AND PAID CHALLAN FOR RS.100/- FOR THE COPY OF THE STATEMENT RECORDED. T HE REVENUE IS NOT DISPUTING THE RECEIPT OF THE CHALLAN OF RS.100/- NO R ACCOMPANYING LETTER DATED 21.09.2011. THE REVENUE HAS GRANTED THE COPY OF THE STATEMENT RECORDED ON THE BASIS OF THE LETTER OF THE ASSESSEE DATED 26.11.2012 THOUGH IN THE LETTER OF THE REVENUE DATED 27.11.201 1, THEY TALK OF LETTER OF THE ASSESSEE RECEIVED ON 21.11.2012. THE STATEM ENT RECORDED FROM THE ASSESSEE DOES TALK OF THE P&L A/C, BALANCE SHEE T OF THE ASSESSEE FOR THE YEAR ENDING 31.03.2011 AND WHICH ALSO TALKS ABO UT THE INCOMPLETE NATURE OF THE ENTRY. THE AUDITOR OF THE ASSESSEE W ANTING TO SEE THIS STATEMENT CANNOT BE FOUND FAULT WITH. IN ANY CASE, THE AUDIT REPORT WAS ALSO AVAILABLE WITH THE AO WHEN THE ASSESSMENT WAS COMPLETED. THIS BEING SO, WE ARE OF THE VIEW THAT THE ASSESSEE DID HAVE A REASONABLE ITA NOS.1484 & 2833/MDS/2016 :- 6 -: CAUSE FOR THE DELAY IN OBTAINING AND FURNISHING THE AUDIT REPORT BELATEDLY ALONG WITH THE RETURN OF INCOME. IN THESE CIRCUMST ANCES, WE ARE OF THE VIEW THAT AS THE ASSESSEE HAS REASONABLE CAUSE IN V IEW OF THE PROVISIONS OF SEC.273B OF THE IT ACT, 1961, NO PENALTY U/S.271 B IS LEVIABLE ON THE ASSESSEE AND WE CONSEQUENTLY CANCEL THE PENALTY LEV IED BY THE AO AND AS CONFIRMED BY THE LD.CIT(A). 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.1484/MDS/2016 STANDS ALLOWED. 9. AS WE HAVE ALREADY ALLOWED THE ASSESSEES APPEAL IN ITA NO.1484/MDS/2016 AND CANCEL THE PENALTY LEVIED U/S. 271B, THE APPEAL FILED BY THE ASSESSEE IN ITA NO.2833/MDS/2016 BECOM ES INFRUCTUOUS AND IS DISMISSED AS INFRUCTUOUS. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IN ITA NO.1484/MDS/2016 STANDS ALLOWED AND THE APPEAL OF T HE ASSESSEE IN ITA NO.2833/MDS/2016 STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON SEPTEMBER 12 , 2017, AT CHENNAI. SD/- SD/- ( ) ( SANJAY ARORA ) /ACCOUNTANT MEMBER ( # ) (GEORGE MATHAN) ' /JUDICIAL MEMBER ITA NOS.1484 & 2833/MDS/2016 :- 7 -: /CHENNAI, 3 /DATED: SEPTEMBER 12, 2017. TLN - +'45 65 /COPY TO: 1. * /APPELLANT 4. 7 /CIT 2. +,* /RESPONDENT 5. 5 +'' /DR 3. 7 ( ) /CIT(A) 6. # /GF