Arun Agarwal Prop. Victor Enterprises, New Delhi V. ITO, New Delhi

ITA 1638/DEL/2016

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 7565 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 06-06-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 29-03-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: RAJNISH GOYAL; SURESH AGARWAL S
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : SMC-I : NEW DELHI BEFORE SHRI R.S. SYAL, ACCOUNTANT MEMBER ITA NO.1638/DEL/2016 ASSESSMENT YEAR : 2009-10 ARUN AGARWAL, PROP., VICTOR ENTERPRISES, 129, KAMLA MARKET, NEW DELHI. PAN: AAEPA7658L VS. ITO, WARD 31(3), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI RAJNISH GOYAL, & SHRI SURESH AGARWAL, ADVOCATES. DEPARTMENT BY : NONE DATE OF HEARING : 06.06.2016 DATE OF PRONOUNCEMENT : 06.06.2016 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST TH E ORDER PASSED BY THE CIT(A) ON 25.1.2016 UPHOLDING THE PENALTY OF RS .1 LAC IMPOSED BY THE AO U/S 271B OF THE INCOME-TAX ACT, 1961 (HEREIN AFTER ALSO CALLED THE ACT) IN RELATION TO THE ASSESSMENT YEAR 2009- 10. ITA NO.1638/DEL/2016 2 2. AT THE VERY OUTSET, IT IS MENTIONED THAT THE DEP ARTMENT HAS MOVED ADJOURNMENT APPLICATIONS IN ALL THE CASES FIXED BEF ORE THE BENCH TODAY. THE LD. AR APPEARING FOR THE ASSESSEE STRONGLY OBJE CTED TO THE GRANT OF ADJOURNMENT. I AM CONVINCED WITH THE NON-GRANTING OF SUCH EN BLOC ADJOURNMENTS. AS SUCH, I AM PROCEEDING TO DISPOSE O F THE APPEAL EX PARTE QUA THE REVENUE. 3. BRIEFLY STATED, THE FACT OF THE CASE ARE THAT TH E ASSESSEE IS AN INDIVIDUAL ENGAGED IN TRADING BUSINESS. THE RETURN WAS FILED ELECTRONICALLY AND THE ASSESSEE MENTIONED AGAINST T HE COLUMN OF AUDIT INFORMATION THAT HE WAS NOT LIABLE FOR AUDIT U/S 4 4AB OF THE ACT. FROM THE PENALTY ORDER, IT IS SEEN THAT THE AO FOUND THE TURNOVER OF THE ASSESSEE AT RS.36,90,127/-. ON BEING CALLED UPON T O EXPLAIN AS TO WHY PENALTY U/S 271B BE NOT IMPOSED, THE ASSESSEE SUBMI TTED THAT HE FILED TAX AUDIT REPORT WITH THE DEPARTMENT IN TIME WHICH WAS OBTAINED BEFORE THE DUE DATE OF 30.9.2009. THE AO IMPOSED PENALTY OF R S.1 LAC AS THE ASSESSEE DID NOT FILE ANY EVIDENCE THAT THE TAX AUD IT REPORT WAS FILED WITH THE DEPARTMENT IN TIME. THE LD. CIT(A) ECHOED THE P ENALTY ORDER. ITA NO.1638/DEL/2016 3 4. AFTER GOING THROUGH THE RELEVANT MATERIAL ON REC ORD, IT IS OBSERVED THAT THE PENALTY HAS BEEN IMPOSED BY THE AO ON THE GROUND THAT THE ASSESSEE DID NOT FILE: ANY EVIDENCE UPTO THE COMPL ETION OF ASSESSMENT PROCEEDINGS IN SUPPORT OF THE CLAIM THAT THE CO PY OF AUDIT REPORT HAS FILED TO YOUR DEPARTMENT. CIRCULAR NO.5/2007 DISC USSES CERTAIN ASPECTS CONCERNING E-FILING OF RETURNS. PARA 6 DEALS WITH T HE FILING OF AUDIT REPORT, WHICH STATES THAT THE AUDIT REPORT U/S 44AB IS NOT REQUIRED TO BE ATTACHED WITH THE RETURN AND IT SHOULD NOT BE FURNISHED SEPA RATELY BEFORE OR AFTER THE DUE DATE. THE ASSESSEE SHOULD GET THE REPORT O F AUDIT FROM THE CHARTERED ACCOUNTANT BEFORE THE DUE DATE OF FURNISH ING THE RETURN AND SHOULD FILL UP THE RELEVANT COLUMNS OF THESE FORMS ON THE BASIS OF SUCH REPORT. THIS PARA FURTHER STATES THAT THE ASSESSE E SHOULD RETAIN THE REPORT WITH HIMSELF AND IT MAY BE FURNISHED IN ORIGINAL DU RING THE ASSESSMENT PROCEEDINGS. PENALTY U/S 271B SHALL BE ATTRACTED I F THE AUDIT REPORT HAS NOT BEEN OBTAINED BEFORE THE DUE DATE. IT TRANSPIR ES ON GOING THROUGH THIS PARA THAT PURSUANT TO THE E-FILING OF THE RETU RNS, IT IS NO MORE REQUIRED TO EITHER UPLOAD THE TAX AUDIT REPORT OR FILE IT PH YSICALLY WITH THE INCOME- TAX DEPARTMENT BEFORE THE DUE DATE U/S 139(1) OF TH E ACT. THE ONLY ITA NO.1638/DEL/2016 4 REQUIREMENT IS TO OBTAIN THE AUDIT REPORT BEFORE TH E DUE DATE AND FURNISH THE SAME DURING THE COURSE OF ASSESSMENT PROCEEDING S. 5. IT IS MANIFEST THAT THE AO HAS IMPOSED PENALT Y IN VIEW OF THE FACT THAT THE ASSESSEE FAILED TO FILE ANY EVIDENCE IN S UPPORT OF ITS CLAIM THAT COPY OF THE AUDIT REPORT WAS FILED WITH THE DEPARTM ENT IN TIME. ON THE OTHER HAND, PAGE 2 OF THE ASSESSMENT ORDER PASSED U /S 143(3) OF THE ACT CLEARLY RECORDS THAT THE ASSESSEE HAS MENTIONED IN THE RETURN THAT HE WAS NOT LIABLE FOR AUDIT : HOWEVER, DURING THE COURSE OF ASSESSMENT PROCEEDINGS, HE HAS FILED TAX AUDIT REPORT. THERE IS AN APPARENT CONTRADICTION IN THE STAND TAKEN BY THE AO DURING T HE COURSE OF ASSESSMENT PROCEEDINGS POR UNA PARTE AND PENALTY PROCEEDINGS POR OTRA PARTE . WHEN IT HAS BEEN CLEARLY ACKNOWLEDGED IN THE ASS ESSMENT ORDER THAT THE ASSESSEE DID FILE A COPY OF TAX AUDIT REPO RT, THE OBJECTION OF THE AO IN THE PENALTY PROCEEDINGS ABOUT THE ASSESSEE N OT HAVING FILED ANY EVIDENCE IN SUPPORT OF ITS CONTENTION THAT THE AUDI T REPORT WAS FILED DURING THE ASSESSMENT PROCEEDINGS, DOES NOT STAND A NYWHERE. THE ONLY MISTAKE COMMITTED BY THE ASSESSEE IS THAT WHILE E-F ILING THE INCOME-TAX ITA NO.1638/DEL/2016 5 RETURN, IT INADVERTENTLY CLICKED A WRONG COLUMN IND ICATING THAT IT WAS NOT REQUIRED TO FILE ANY AUDIT REPORT. WHEN I CONSIDER THE FACT THAT THE ASSESSEE SUBMITTED A COPY OF TAX AUDIT REPORT DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS, IT BECOMES MANIFEST THAT CL ICKING A WRONG COLUMN WHILE E-FILING THE RETURN OF INCOME CANNOT B E CONSIDERED AS FATAL. THE SUBSTANCE OF THE PROVISION IS TO GET THE ACCOUN TS AUDITED AND OBTAIN THE TAX AUDIT REPORT BEFORE THE DUE DATE AND FILE I T DURING THE COURSE OF ASSESSMENT PROCEEDINGS. WHEN THESE THREE SUBSTANTI AL THINGS ARE DONE, A MERE INADVERTENT MISTAKE IN CLICKING A WRONG COLUMN WHILE E-FILING THE RETURN OF INCOME, CANNOT LEAD TO THE IMPOSITION OR CONFIRMATION OF PENALTY U/S 271B OF THE ACT. REVERSING THE IMPUGNE D ORDER, I ORDER FOR THE DELETION OF PENALTY. 6. IN THE RESULT, THE APPEAL IS ALLOWED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 06.06.201 6. SD/- [R.S. SYAL] ACCOUNTANT MEMBER DATED,06 TH JUNE, 2016. ITA NO.1638/DEL/2016 6 DK COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT AR, ITAT, NEW DELHI.