ABHA RAJESH KAPOOR, MUMBAI V. PCIT -CIRCLE -24, MUMBAI

ITA 1655/MUM/2022

• Counselvise Citation: [2022] 106 COUNSELVISE.COM (IT) 7649 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-09-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2014-2015
• Appeal Filed On: 22-06-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Reasonable cause
• Section: 273B; 143(3); 271B; 44AB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A” MUMBAI BEFORE SHRI KULDIP SINGH (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) ITA No. 1655/MUM/2022 Assessment Year: 2014-15 Abha Rajesh Kapoor, D-1, Gita Prakash, 4 Bungalows, J.P. Road, Andheri (West), Mumbai-400053. Vs. Principal Commissioner of Income Tax-24, Piramal Chambers, Lal Baug, Parel, Mumbai-400021. PAN No. ADQPK 1331 F Appellant Respondent Assessee by : None Revenue by : Mr. Manoj Sinha, DR Date of Hearing : 25/08/2022 Date of pronouncement : 13/09/2022 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 17.04.2022 passed by the National Faceless Appeal Centre, Delhi (the Ld. First Appellate Authority) in relation to penalty order for non-furnishing of audit reports which was required in terms section 44AB of the Income Tax Act, 1961 (in short ‘the Act’). The grounds raised by the assessee are reproduced as under: 1. On the facts and in the circumstances of the case and in the law, the learned CIT (A) has erred in confirming penalty of Rs 150000/ imposed by the A 271B of the Act ignoring the reasonable cause as to uploading of tax audit report required login id, password and digital signature of the tax auditor which was not possible after the tax auditor passed away on 05/06/2014 and it was a fit c u/s 273B of the Act. 2. On the facts and in the circumstances of the case and in the law, the learned CIT (A) has erred passing the appellate order against the appellant without adhering to the principles of natural justice. 2. Facts in brief of the case are that the assessee was engaged in Future & Options transactions in the share market having total turnover of ₹98.49 crores. The assessee filed a return of income in the year under consideration on 31.07.2014 declaring total in of ₹50,000/-. The scrutiny assessment u/s 143(3) of the Act was completed on 28.12.2016. During the assessment proceedings, the the Income Tax Act, 1961 (in short ‘the Act’). The grounds raised by the assessee are reproduced as under: On the facts and in the circumstances of the case and in the law, the learned CIT (A) has erred in confirming penalty of Rs 150000/ imposed by the AO under section 271B of the Act ignoring the reasonable cause as to uploading of tax audit report required login id, password and digital signature of the tax auditor which was not possible after the tax auditor passed away on 05/06/2014 and it was a fit case for waiver of penalty u/s 273B of the Act. On the facts and in the circumstances of the case and in the law, the learned CIT (A) has erred passing the appellate order against the appellant without adhering e principles of natural justice. Facts in brief of the case are that the assessee was engaged in Future & Options transactions in the share market having total 98.49 crores. The assessee filed a return of income in the year under consideration on 31.07.2014 declaring total in . The scrutiny assessment u/s 143(3) of the Act was completed on 28.12.2016. During the assessment proceedings, the Abha Rajesh Kapoor ITA No. 1655/M/2022 2 the Income Tax Act, 1961 (in short ‘the Act’). The grounds On the facts and in the circumstances of the case and in the law, the learned CIT (A) has erred in confirming O under section 271B of the Act ignoring the reasonable cause as to uploading of tax audit report required login id, password and digital signature of the tax auditor which was not possible after the tax auditor passed away on ase for waiver of penalty On the facts and in the circumstances of the case and in the law, the learned CIT (A) has erred passing the appellate order against the appellant without adhering Facts in brief of the case are that the assessee was engaged in Future & Options transactions in the share market having total 98.49 crores. The assessee filed a return of income in the year under consideration on 31.07.2014 declaring total income . The scrutiny assessment u/s 143(3) of the Act was completed on 28.12.2016. During the assessment proceedings, the Assessing Officer observed that gross receipt on account of sales/turnover of the assessee was of statutory audit u/s 44AB of the Act was carried out or filed by the assessee. Accordingly issuing show cause notice to the assessee ₹1,50,000/-. 3. Aggrieved, the assessee filed appeal be sought relief from the penalty on the not uploading audit repo Department. It was submitted on behalf of the assessee audit report for assessment year 20 auditor M/s Manmohan Ka of Sh. Manmohan Kalra, who was proprietor of the firm subsequently, the report could not be uploaded assessee, this constitute a reasonable cause for n report on the Income Assessing Officer observed that gross receipt on account of sales/turnover of the assessee was of ₹98,49,90,283/ statutory audit u/s 44AB of the Act was carried out or filed by the assessee. Accordingly, he initiated penalty proceedings and after issuing show cause notice to the assessee, levied a penalty of Aggrieved, the assessee filed appeal before the Ld. CIT(A) and relief from the penalty on the ground of reasonable cause for not uploading audit report on the website of the Income Department. It was submitted on behalf of the assessee audit report for assessment year 2014-15 was obtained from M/s Manmohan Kalra & Associates however, due to demise of Sh. Manmohan Kalra, who was proprietor of the firm , the report could not be uploaded. According to the constitute a reasonable cause for not uploading report on the Income-tax Portal within the stipulated period. Abha Rajesh Kapoor ITA No. 1655/M/2022 3 Assessing Officer observed that gross receipt on account of 98,49,90,283/-. However, no statutory audit u/s 44AB of the Act was carried out or filed by the he initiated penalty proceedings and after levied a penalty of fore the Ld. CIT(A) and reasonable cause for rt on the website of the Income-tax Department. It was submitted on behalf of the assessee that the tax 15 was obtained from however, due to demise of Sh. Manmohan Kalra, who was proprietor of the firm . According to the ot uploading audit ax Portal within the stipulated period. However, the Ld. CIT(A) rejected the contention of the assessee and held that if the assessee could file return of income on 31.07.2014, which was almost two months after the nothing prevented the assessee from alongwith the return CIT(A) rejected the claim of reasonable cause and accordingly upheld the penalty levied by the Assessing Officer. 4. Before us, none attended on behalf of the assessee despite notifying and therefore, the appeal assessee after hearing the argument of Ld. Departmental Representative (DR). 5. We find that the issue reasonable cause for failure on the part of the assessee in the Tax Audit Report 44AB, the assessee was required to audit and upload a However, the Ld. CIT(A) rejected the contention of the assessee and held that if the assessee could file return of income on 31.07.2014, which was almost two months after the demise of the nothing prevented the assessee from uploading the tax audit report with the return of income on the Income-tax portal. The Ld. CIT(A) rejected the claim of reasonable cause and accordingly upheld the penalty levied by the Assessing Officer. Before us, none attended on behalf of the assessee despite notifying and therefore, the appeal was heard ex after hearing the argument of Ld. Departmental ). We find that the issue-in-dispute is whether there was any reasonable cause for failure on the part of the assessee in Tax Audit Report on the Income-tax portal. In terms of section 44AB, the assessee was required to audit and upload a Abha Rajesh Kapoor ITA No. 1655/M/2022 4 However, the Ld. CIT(A) rejected the contention of the assessee and held that if the assessee could file return of income on 31.07.2014, demise of the Tax Auditor, uploading the tax audit report ax portal. The Ld. CIT(A) rejected the claim of reasonable cause and accordingly, he Before us, none attended on behalf of the assessee despite ex-parte qua the after hearing the argument of Ld. Departmental dispute is whether there was any reasonable cause for failure on the part of the assessee in uploading terms of section 44AB, the assessee was required to audit and upload audit report along with return of income. Penalty u/s 271B of the Act is leviable if the assessee fails in more than the prescribed limit or fails in uploading the said report. On perusal of the order of t rejected the demise of Tax Auditor as reasonable cause in not uploading the Tax Audit Report on portal of the Income Department. This fact of the demise of the tax auditor has not been controverted by the Revenue part of the assessee to upload tax audit a Tax Auditor constitute a reasonable cause. It is not the case that accounts were not audited. The assessee has already filed a copy of tax audit report before the Ld. CIT(A). In our opinion, demise of the tax auditor constitute a reasonable cause in not uploaded the tax audit report on Income penalty levied by the Assessing Officer and sustained by the Ld. CIT(A) is deleted in view of reasonable cause under section 273B of along with return of income. Penalty u/s 271B of the Act is leviable in auditing its books of accounts if turnover more than the prescribed limit or fails in uploading the said On perusal of the order of the Ld. CIT(A), we find that rejected the demise of Tax Auditor as reasonable cause in not uploading the Tax Audit Report on portal of the Income This fact of the demise of the tax auditor has not been controverted by the Revenue. In such circumstances failure on the part of the assessee to upload tax audit report without assistance of constitute a reasonable cause. It is not the case that accounts were not audited. The assessee has already filed a copy of rt before the Ld. CIT(A). In our opinion, demise of the tax auditor constitute a reasonable cause in not uploaded the tax audit report on Income-tax Portal within the stipulated period. The penalty levied by the Assessing Officer and sustained by the Ld. in view of reasonable cause under section 273B of Abha Rajesh Kapoor ITA No. 1655/M/2022 5 along with return of income. Penalty u/s 271B of the Act is leviable its books of accounts if turnover is more than the prescribed limit or fails in uploading the said audit he Ld. CIT(A), we find that he has rejected the demise of Tax Auditor as reasonable cause in not uploading the Tax Audit Report on portal of the Income-tax This fact of the demise of the tax auditor has not been such circumstances failure on the report without assistance of constitute a reasonable cause. It is not the case that accounts were not audited. The assessee has already filed a copy of rt before the Ld. CIT(A). In our opinion, demise of the tax auditor constitute a reasonable cause in not uploaded the tax tax Portal within the stipulated period. The penalty levied by the Assessing Officer and sustained by the Ld. in view of reasonable cause under section 273B of the Act. The grounds of appeal raised by the assessee are accordingly allowed. 6. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court in Sd/- (KULDIP SINGH JUDICIAL MEMBER Mumbai; Dated: 13/09/2022 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file. //True Copy// . The grounds of appeal raised by the assessee are accordingly allowed. In the result, the appeal filed by the assessee is allowed. unced in the open Court in 13/09 Sd/- KULDIP SINGH) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT Copy of the Order forwarded to : BY ORDER, (Sr. Private Secretary ITAT, Mumbai Abha Rajesh Kapoor ITA No. 1655/M/2022 6 . The grounds of appeal raised by the assessee are In the result, the appeal filed by the assessee is allowed. 09/2022. - OM PRAKASH KANT) MEMBER Sr. Private Secretary) ITAT, Mumbai