Pankaj Bhotika , Kolkata V. ITO, Ward - 46(2), Kolkata , Kolkata

ITA 1710/KOL/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 7596 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-07-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 09-08-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHANKAR HALDER
• Assessee Lawyers: MIRAJ D. SHAH
• Keywords: Business income; Question of law; Reasonable cause; Non compliance; Onus to prove; Ignorance of law
• Section: 143(1); 250; 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENC H KOLKATA BEFORE SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM ./ITA NO.1710/KOL/2018 ( / ASSESSMENT YEAR:2009-10) PANKAJ BHOTIKA 4C, 4 TH FLOOR, BLOCK-1, PRANTIK RESIDENCY, 157, BINOVABHAVE ROAD, KOLKATA-700038 VS. ITO, WARD-46(2), KOLKATA ./ ./PAN/GIR NO.: AJDPB 3227 A (ASSESSEE) .. (REVENUE) ASSESSEE BY :SHRI MIRAJ D SHAH, AR RESPONDENT BY : SHRI SHANKAR HALDER, JCIT, SR. DR / DATE OF HEARING : 19/07/2019 /DATE OF PRONOUNCEMENT : 24/07/2019 / O R D E R PER DR. A. L. SAINI: THE CAPTIONED APPEAL FILED BY THE ASSESSEE, PERT AINING TO ASSESSMENT YEAR 2009-10, IS DIRECTED AGAINST THE ORDER PASSED BY TH E COMMISSIONER OF INCOME TAX (APPEAL)-14, KOLKATA, WHICH IN TURN ARISES OUT OF A PENALTY ORDER PASSED BY THE ASSESSING OFFICER U/S 271B OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 22/06/2017. 2. GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE AS FOLLOWS: 1. FOR THAT THE LD. COMMISSIONER OF INCOME TAX (A)- 14, KOLKATA HAS ERRED IN LAW AS WELL AS ON FACTS OF THE CASE BY NOT PAYIN G HEED TO THE ASSESSEES GROUNDS OF APPEAL RAISED BEFORE HIS HONOUR ON THE P OINT OF IMPOSITION OF PENALTY U/S 271B OF THE I.T. ACT, 1961 OF RS. 73,07 0/- AND DISMISSED THE APPEAL ON THE GROUNDS WHICH ARE NOT CORRECT AS THE ASSESSEEBONAFIDELY WAS NOT IN THE IDEA OF GETTING HIS BOOKS OF ACCOUNTS AU DITED IF HIS SALES, TURNOVER PANKAJ BHOTIKA ITA NO.1710/KOL/2018 ASSESSMENT YEAR:2009-10 PAGE | 2 OR GROSS RECEIPTS EXCEEDS RS. 40 LAKH IN THE PREVIO US YEAR RELATING TO ASSESSMENT YEAR 2009-10 AND THE SAME WAS REQUIRED T O BE SUBMITTED WITH THE I.T. DEPARTMENT ON OR BEFORE THE DUE DATE OF F ILING I. T. RETURN. 2. FOR THAT THE OBSERVATIONS AND CONTENTIONS OF THE LD. CIT(A)-14, KOLKATA WHILE PASSING ORDER U/S 250 OF THE I.T. ACT, 1961 D ISMISSING ASSESSEES APPEAL ON THE GROUNDS WHICH ARE NOT CORRECT. 3. FOR THAT THE APPELLANT CRAVES LEAVE TO ADDUCE, M ODIFY AND OR ALTER THE GROUNDS AT OR BEFORE HEARING. 3. BRIEF FACTS QUA THE ISSUE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME BELATED FOR ASSESSMENT YEAR 2009-10, ON 26.08.2010 DECLARIN G TOTAL INCOME OF RS. 1,29,070/-. THE RETURN OF INCOME WAS PROCESSED U/S 143(1) OF THE ACT ON 23.06.2011. SUBSEQUENTLY THE CASE WAS REOPENED BY I SSUING NOTICE U/S 148 OF THE ACT ON 29.03.2016 FOLLOWING AN INFORMATION RECEIVED FROM DDIT(INV), UNIT-3(1), KOLKATA RELEVANT TO THE ASSESSEE. THE FACTS LEADING TO THE RE-OPENING OF THE CASE IN NUTSHELL ARE AS FOLLOWS: AS PER INVESTIGATION REPORT, IT HAD BEEN FOUND THA T THE ASSESSEE WAS DOING THE TRADING BUSINESS OF COTTON BAGS THROUGH HIS SOLE PR OPRIETORSHIP CONCERN IN THE NAME AND STYLE OF M/S DELUXE ENTERPRISE DURING THE F.Y. 2008-09 AND IT WAS OPERATIONAL FOR A VERY SHORT PERIOD, APPROXIMATELY 4 MONTHS (I.E. FROM 22.11.2008 TO 20.03.2009) TO BE PRECISE. DURING THIS SHORT PER IOD HUGE TURNOVER IN TERMS OF INFLUX OF HUGE CASH TRANSFER WERE OBSERVED IN VARI OUS ACCOUNTS MAINTAINED BY THE ASSESSEE. THE TOTAL CREDIT AND DEBIT IN THE ACCOUNT , AMOUNTED TO AROUND RS. 1.4 CRORE DURING THAT SHORT PERIOD. THE RETURNS OF INCO ME FILED BY THE ASSESSEE WAS NOT COMMENSURATE WITH THE INFORMATION REGARDING THE HUG E TRANSACTION AVAILABLE WITH THE DEPARTMENT. 4. IN RESPONSE TO THE NOTICE U/S 148, THE ASSESSEE SUBMITTED THAT THE ORIGINAL RETURNS FILED BY THE ASSESSEE BE TREATED AS A RETURN IN RES PONSE TO NOTICE U/S 148 OF THE ACT. DURING THE COURSE OF REASSESSMENT PROCEEDING THE AS SESSEE FURNISHED A REVISED COMPUTATION OF TOTAL INCOME ALONG WITH PROFIT & LOS S ACCOUNT AND BALANCE SHEET OF HIS PROPRIETORSHIP BUSINESS OF M/S DELUXE ENTERP RISE FOR THE F.Y. 2008-09 PANKAJ BHOTIKA ITA NO.1710/KOL/2018 ASSESSMENT YEAR:2009-10 PAGE | 3 RELEVANT TO THE A.Y. 2009-10. FROM THE VERIFICATION OF PROFIT & LOSS ACCOUNT OFM/S DELUXE ENTERPRISE FOR THE F.Y. 2008-09, IT WAS FOUN D THAT TOTAL SALES OF THE COTTON AND SILK ITEMS WAS AT RS. 1,46,14,105/- AND THE NET PROFIT WAS SHOWN BY THE ASSESSEE ATRS.2,19,211/-. THE ASSESSMENT U/S. 143(3 )/147 OF THE I.T. ACT, 1961 WAS COMPLETED ON 28.12.2016 AND THE TOTAL INCOME OF THE ASSESSEE FOR THE AY. 2009-10 WAS ASSESSED AT RS. 12,98,200/- @ 8% OF THE GROSS T URNOVER AT RS.L,46,14,105/-.AS EARLIER MENTIONED, THE TOTAL BUSINESS TURNOVER OF T HE ASSESSEE DURING THE F.Y.2008- 09 WAS AT RS.1,46,11,105/-. THEREFORE, AS PER PROVI SIONS OF SECTION 44AB OF THE I.T.ACT,1961, THE ASSESSEE SHOULD HAVE GOT HIS BOOK S OF ACCOUNTS OF PROPRIETORSHIP BUSINESS AUDITED WITHIN THE SPECIFIED TIME AND FURN ISHED BEFORE THE TIME FRAMED AS PER SECTION 139(1) OF THE I.T. ACT, 1961. FOR A.Y. 2009-10, THE STIPULATED TIME WAS 30.09.2009 WITHIN WHICH THE ASSESSE HAD FAILED TO G ET HIS BOOKS OF ACCOUNTS AUDITED. NO TAX AUDIT REPORT WAS SUBMITTED WITHIN T HE PERIOD AS WELL.DURING THE COURSE OF ASSESSMENT PROCEEDINGS, A SHOW CAUSE NOTI CE WAS ISSUED TO THE ASSESSEE ON 08.12.2016 ASKING HIM WHY PENALTY PROCEEDING U/S . 271B OF THE I.T. ACT, 1961 SHOULD NOT BE INITIATED FOR VIOLATION OF THE PROVIS ION OF SECTION 44AB OF THE I.T. ACT, 1961. 5. IN COMPLIANCE TO THE SHOW CAUSE NOTICE, THE ASSE SSEE FILED A WRITTEN SUBMISSION DATED 15.12.2016, WHICH ARE REPRODUCED BELOW: '.. BEING NOT SO PROFESSIONALLY LITERATE AND QUAL IFIED AS REGARDS THE LEGAL FORMALITIES REQUIRED TO BE MADE RELATED TO THE SAID SECTIONS AS BEEN MENTIONED IN THE INCOME TAX ACT WHICH HAS BEEN RELEVANT THE CASE , I HAVE BEEN UNAWARE RELATED TO THE SAME. MEANWHILE IN RUNNING THE SAID BUSINESS, I TRIED MY BEST TO MAINTAIN THE REQUISITE BOOKS OF ACCOUNTS TO THE EXT ENT I HAD BEEN ABLE TO, HOWEVER DUE TO LACK OF KNOWLEDGE ON MY SIDE, I WAS NOT FULL Y COMPATIBLE TO DO SO. AS REGARDS THE PENALTY PROCEEDINGS U/S 271B IN MY CASE , I WOULD STATE THAT THE SAID SECTION HAS BEEN JUSTIFIED IN CASES OF GENUINE DEFA ULTERS BUT IN MY CASE IT HAS BEEN OUT OF MY KNOWLEDGE REGARDS THE SAID SECTION, THERE BY THE SAID DEFAULT OCCURRED REGARDS WHICH I WOULD REQUEST YOUR HONOUR TO KINDLY WAIVE OF THE SAME' . HAVING GONE THROUGH THE REPLY OF THE ASSESSEE, THE LD AO WAS OF THE VIEW THAT THE EXPLANATION OFFERED BY THE ASSESSEE WAS FOUND NEITH ER JUSTIFIED NOR ACCEPTABLE.IN ANY CASE, LACK OF INFORMATION ABOUT THE SECTION CAN NOT BE TREATED AS A VALID GROUND FOR NON COMPLIANCE OF A PROVISION OF AN ACT. THEREF ORE, LD AO IMPOSED PENALTY U/S. 271BAT RS.73,070/-. PANKAJ BHOTIKA ITA NO.1710/KOL/2018 ASSESSMENT YEAR:2009-10 PAGE | 4 6. AGGRIEVED BY THE ORDER OF THE ASSESSING OFFICER THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) WHO HAS CONFIRMED T HE PENALTY IMPOSED BY THE ASSESSING OFFICER U/S 271B OF THE ACT. AGGRIEVED, T HE ASSESSEE IS IN APPEAL BEFORE US. 7. THE LD. COUNSEL FOR THE ASSESSEE BEGINS BY POINT ING OUT THAT IT WAS THE FIRST YEAR OF THE ASSESSEES BUSINESS WHERE IT WAS IMPOSSIBLE FOR HIM TO KEEP TRACK OF THE REQUIREMENTS OF THE TAX AUDIT U/S 44AB OF THE ACT. THE LD. COUNSEL SUBMITTED THAT THE ASSESSEE ACTUALLY WAS NOT IN THE IDEA OF GETTIN G HIS BOOKS OF ACCOUNTS AUDITED IF HIS GROSS RECEIPTS EXCEED RS. 40 LACS IN THE PREVIO US YEAR RELEVANT TO ASSESSMENT YEAR 2009-10. THE LD. COUNSEL FOR THE ASSESSEE ALSO SUBMITTED THAT THIS IS ONE OF THE BONAFIDE REASONS, BEING THE FIRST YEAR OF BUSIN ESS WHERE THE ASSESSEE WAS NOT AWARE ABOUT THE PROVISIONS OF SECTION 44AB OF THE A CT AND THE TURNOVER CEILING LIMIT U/S 44AB OF THE ACT AND THEREFORE THE BOOKS OF ACCOUNTS COULD NOT GET AUDITED, HENCE PENALTY SHOULD NOT BE LEVIED. 8. ON THE OTHER HAND, THE LD. DR FOR THE REVENUE SU BMITTED THAT SINCE THE TURNOVER OF THE ASSESSEE EXCEEDS RS.40LACS DURING THE ASSESS MENT YEAR 2009-10, THEREFORE AS PER THE REQUIREMENT OF SECTION 44AB OF THE ACT, THE ASSESSEE SHOULD GET HIS ACCOUNTS AUDITED U/S 44AB OF THE ACT. SINCE THE ASS ESSEE HAS FAILED TO GET HIS ACCOUNTS AUDITED THEREFORE, PENALTY IMPOSED BY THE ASSESSING OFFICER U/S 271B OF THE ACT, THE TUNE OF RS. 73,070/- SHOULD BE UPHELD. 9. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. WE NOTE THAT THE ASSESSEE HAS STARTED HIS BUSINESS DURING THE RELEVANT PREVIOUS YEAR 2008-09 AND IS NOT PROFESSIONALLY LITERATURE. WE NO TE THAT THE ASSESSEE WAS MAINTAINING REQUISITE BOOKS OF ACCOUNTS AND THERE W AS NO WILLFUL ATTEMPT NOT TO GET BOOKS OF ACCOUNTS AUDITED. THE LD COUNSEL FOR THE A SSESSEE SUBMITTED BEFORE US THAT ASSESSEE USED TO DEPEND ON HIS ACCOUNTANT, WH O SUGGESTEDTHE ASSESSEE THAT ACCOUNTS OF THE CONCERNED FINANCIAL YEAR WERE NOT R EQUIRED TO BE AUDITED. ONLY IN THE COURSE OF HEARING, THE ASSESSEE CAME TO KNOW TH AT THE ACCOUNTS ARE REQUIRED TO BE AUDITEDIF TURNOVER / GROSS RECEIPTS EXCEEDS RS. 40 LAKHS. THEREFORE, THIS PANKAJ BHOTIKA ITA NO.1710/KOL/2018 ASSESSMENT YEAR:2009-10 PAGE | 5 OMISSION WAS NOT DELIBERATE AND INTENTIONAL. THEREF ORE, LD COUNSEL SUBMITTED THAT UNDER THESE CIRCUMSTANCES THE ASSESSING OFFICER SHO ULD NOT HAVE LEVIED PENALTY U/S 271B OF THE ACT, AS THE ASSESSEE WAS PREVENTED BY SUFFICIENT REASONS WHICH ARE NOT DELIBERATE AND INTENTIONAL. THERE WAS A BONA FI DE BELIEF IN THE MIND OF THE ASSESSEE REGARDING NON-APPLICABILITY OF PROVISION O F SECTION 44AB OF THE ACT AND THIS CONSTITUTES A REASONABLE CAUSE NOT TO IMPOSE P ENALTY ON THE ASSESSEE UNDER CONSIDERATION. 10. WE NOTE THAT AN ORDER IMPOSING PENALTY FOR FAIL URE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF A QUASI- CRIMINAL PROCE EDING, AND PENALTY WILL NOT ORDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED, EIT HER ACTED DELIBERATELY IN DEFIANCE OF LAW OR WAS GUILTY OF CONDUCT CONTUMACIO US OR DISHONEST, OR ACTED IN CONSCIOUS DISREGARD OF ITS OBLIGATION. PENALTY WILL NOT ALSO BE IMPOSED MERELY BECAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOU LD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCR ETION OF THE AUTHORITY TO BE EXERCISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES. EVEN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHORITY C OMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY, WH EN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHERE THE BR EACH FLOWS FROM A BONA FIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN TH E MANNER PRESCRIBED BY THE STATUTE. [ HINDUSTAN STEEL LTD. VS. STATE OF ORISSA 83 ITR 26 (SC) ] WE NOTE THAT A REASONABLE CAUSE SAVES PENALTY (INCL UDING U/S. 273B), THE BURDEN TO PROVE WHICH ISA MATTER OF FACT, THOUGH, IS ON THE ASSESSEE. THE ASSESSEES CASE IS LACK OF PROPER ADVICE BY HIS COUNSEL. THE ARGUMENT IS VALID IN PRINCIPLE AS NOBODY CAN BE EXPECTED TO KNOW THE LAW AND, FURTHER, AS IT HAS NOT BEEN SHOWN THAT THE ASSESSEES SALES AT ANY TIME IN THE PAST EXCEEDED T HE THRESHOLD MONETARY LIMIT REQUIRED FOR TAX AUDIT. AN ASSESSEE WOULD NORMALLY HEED TO THE ADVICE BY HIS COUNSEL, WHO, IT IS STATED, FAILED TO ADVISE HIM IN THE MATTER. SURELY, IGNORANCE OF LAW IS NO EXCUSE, BUT, THEN, IT NEEDS TO BE BORNE I N MIND THAT WE ARE HERE CONCERNED WITH PENALTY PROCEEDINGS, IN WHICH THE CONDUCT IS O F ESSENCE. PANKAJ BHOTIKA ITA NO.1710/KOL/2018 ASSESSMENT YEAR:2009-10 PAGE | 6 11. WE NOTE THAT ON SIMILAR FACTS, AS NARRATED ABOV E, THE CO-ORDINATE BENCH OF AMRITSAR IN THE CASE OF RAMESH KUMAR VS. ITO, IN I .T.A. NO. 454/ASR/2017, FOR ASSESSMENT YEAR 2014-15,DATED 29.05.2018, DELETED T HE PENALTY UNDER SECTION 271B OF THE ACT, OBSERVING THE FOLLOWINGS: 3.2 COMING TO THE DISCHARGE OF THE BURDEN OF PROOF , THE ASSESSEE HAS FURNISHED AN AFFIDAVIT DATED 09.03.2016 BY SHRI SANJEEV KUMAR , ADVOCATE (AT PB PAGE 8). THE SAME STATES THAT AS THE ASSESSEES, WHOSE RETUR NS HE HAS BEEN FILING SINCE AY 2008-09, TURNOVER UP TO (THE YEAR RELEVANT TO) AY 2 012-13 DID NOT EXCEED THE LIMIT PRESCRIBED UNDER SECTION 44AB, HE COULD NOT ADVISE THE ASSESSEE TO GET HIS ACCOUNTS AUDITED FOR AY 2014-15. ON ENQUIRY ABOUT T HE INTERVENING YEAR, I.E., THE PREVIOUS YEAR RELEVANT TO AY 2013-14, THE COUNSEL, SHRI P.N. ARORA, WOULD CLARIFY THAT THE RETURNS FOR BOTH THE YEARS, I.E., AYS. 201 3-14 AND 2014-15, WERE FILED ON 31.03.2015, AND AUDIT REPORTS FOR BOTH THE YEARS (D ATED 31.03.2015), UPLOADED ON THE SAME DAY, PLACING A COPY OF THE SAID RETURNS ON RECORD. THIS IS CLEARLY SURPRISING. THIS IS AS A COUNSEL, IF NOT ALERT, AND ADVISING HIS CLIENT IN ANTICIPATION, I.E., ON HIS TURNOVER APPROACHING THE PRESCRIBED LIMIT, WOULD NORMALLY ADVISE HIS CLIENT ONLY WHEN THE LATTER APP ROACHES HIM FOR FILING THE RETURN ACCOMPANIED BY HIS UNAUDITED ACCOUNTS - IN C ASE OF BUSINESS INCOME, I.E., ON OBSERVING THE TURNOVER FOR THE RELEVANT YEAR. FO R ALL WE KNOW, THERE MAY HAVE BEEN AN OCCASION FOR SUCH A COUNSEL WHILE PREPARING AND FURNISHING THE RETURN FOR AY 2012-13, AS WHERE THE TURNOVER FOR THAT YEAR APP ROXIMATED RS. 100 LACS. AS THE DUE DATE FOR FILING THE RETURN FOR AY 2013-14 ( FOR UNAUDITED ACCOUNTS) FELL ON 31.07.2013, THE ASSESSEE WOULD HAVE, POST AY 2012-1 3, ONLY APPROACHED HIS ADVOCATE FOR FILING THE RETURNFOR THAT YEAR SOMETIM E BETWEEN APRIL AND JULY, 2013, I.E., AS HE WOULD BE DOING IN THE PAST. THE ACCOUNT S FOR THAT YEAR BEING ALSO REQUIRED TO BE AUDITED UNDER SECTION 44AB, THE LATE ST THAT THE ASSESSEE WOULD THEREFORE BECOME AWARE OF HIS OBLIGATION UNDER LAW TO GET HIS ACCOUNTS AUDITED (AND FILE THE SAME WITH THE DEPARTMENT) IS BY THE E ND OF JULY, 2013, ALLOWING HIM A REASONABLE TIME TO OBTAIN THE AUDIT REPORT (FOR A Y 2013-14) AND FILE THE SAME BY THE DUE DATE THEREFOR (U/S.44AB), I.E., 30.09.2013, AND, IN FACT, ALSO RETURN HIS INCOME FOR THAT YEAR. WHY, THEN, HE DID NOT DO SO? THE LD. AR COULD NOT, ON BEING ASKED DURING HEARING, EXPLAIN. AND NEITHER DO WE FI ND ANY ANSWER TO THIS QUESTION IN THE PLEADINGS BY THE ASSESSEE IN THE PENALTY AND THE APPELLATE PROCEEDINGS, I.E., BEFORE THE REVENUE. NOT ONLY THE ASSESSEE DID NOT D O SO, HE ALSO DID NOT APPROACH HIS COUNSEL FOR FILING THE RETURN FOR THE CURRENT Y EAR (AY 2014-15) IN TIME, BEING DUE FOR UNAUDITED ACCOUNTS, BY 31.07.2014. THIS I S AS, AGAIN, DOING SO WOULD HAVE, LIKEWISE INFORMED HIM THAT THE LAST DATE FOR FILING THE RETURN (FOR AY 2014- 15) IS 30.09.2014, BY WHICH HE IS ALSO TO FURNISH T HE AUDIT REPORT UNDER SECTION 44AB TO THE DEPARTMENT. AND WHICH HE DOES ONLY ON 3 1.03.2015. IT IS THUS PATENT THAT THE ERROR LIES NOT IN THE ADVICE OF THE COUNSE L, WHO IN FACT, GUIDED HIM ON BEING APPROACHED, RIGHTLY, BUT WITH THE ASSESSEE, I NASMUCH AS HE DID NOT APPROACH HIM IN TIME FOR FILING THE RETURN, FIRSTLY , FOR AY 2013-14, AND THEN AGAIN FOR AY 2014-15. THE PLEA OF BEING NOT ADVISED BY HI S ADVOCATE IS, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, CLEARLY MISPLACED. NO WO NDER, THE SAME HAS BEEN FOUND BY THE REVENUE AS AN AFTERTHOUGHT AND A CONCO CTED STORY. WHY, THE ASSESSEE NOWHERE STATES OF WHEN HE APPROACHED HIS COUNSEL FO R FILING THE RETURN FOR AY 2013-14, OR EVEN FOR AY 2014-15, MUCH LESS FILING A N AFFIDAVIT IN SUPPORT OF HIS CASE. EVEN THE AFFIDAVIT BY THE COUNSEL IS SILENT O N THIS, BASING THE NON-RENDERING PANKAJ BHOTIKA ITA NO.1710/KOL/2018 ASSESSMENT YEAR:2009-10 PAGE | 7 OF THE ADVICE AS TO THE REQUIREMENT FOR AUDIT ON TH E ACCOUNTS FOR AYS. 2008-09 TO 2012-13. HOW, ONE MAY WONDER, IS THAT RELEVANT? THI S IS AS NO SUCH REQUIREMENT AROSE FOR THOSE YEARS. WE, IN FACT, HAVE ALREADYPRO CEEDED ON THE BASIS THAT THE ASSESSEE WAS NOT AWARE OF THE OBLIGATION FOR TAX AU DIT A MATTER OF COMMON KNOWLEDGE AMONG BUSINESSMEN, SO THAT NOTHING IN FAC T TURNS THEREON. THE OCCASION FOR RENDERING ADVICE WOULD ARISE ONLY WHEN THE ASSESSEE IS PREPARING TO FILE THE RETURN FOR AY 2013-14 AND, IN ANY CASE, FO R AY 2014-15. IN FACT, APPROACHING THE COUNSEL IN TIME FOR EITHER YEAR WOU LD MAKE HIM AWARE OF THE REQUIREMENT OF LAW AND, CONSEQUENTLY, THE PENAL CON SEQUENCE ATTENDING NON- COMPLIANCE. IF ANYTHING, IT SHOWS THAT THE ASSESSEE IS AWARE OR STANDS MADE AWARE ON SEEKING PROFESSIONAL ADVICE, OF THE LAST D ATE FOR FILING THE RETURN/S BELATEDLY, AND CHOOSES TO, FOR REASONS BEST KNOWN T O HIM, AVAIL OF THE SAID TIME PERIOD. IT IS THE ASSESSEES OWN LACKADAISICAL COND UCT THAT HAS BEEN THUS RESPONSIBLE FOR THE ADMITTED CONTRAVENTION OF SECTI ON 44AB, WITH THAT UNDER REFERENCE BEING THE SECOND SUCH DEFAULT IN SUCCESSI ON. NO REASONABLE CAUSE, UNDER THE CIRCUMSTANCES, STANDS SHOWN, MUCH LESS PR OVED, SO AS TO ESCHEW THE IMPUGNED PENALTY. 3.3 CONTINUING FURTHER, EVEN AS NO CASE LAW WAS REF ERRED TO DURING HEARING, WE FIND TWO DECISIONS BY THE HON'BLE JURISDICTIONAL HI GH COURT IN THE ASSESSEES COMPILATION, WHICH WE ARE THEREFORE OBLIGED TO TAKE NOTE OF. IN CIT V. DEEPAK KUMAR [2010] 38 DTR 118 (P&H), THE HON'BLE COURT UP HELD THE DELETION OF PENALTY UNDER SECTION 271(1)(C). ALL THE FACTS ALON G WITH THE DATES OF PURCHASE AND SALE OF SHARES STOOD DISCLOSED. THAT THE ASSESSEE H AD ACTED BONA FIDE ON THE BASIS OF THE ADVICE OF HIS COUNSEL, WHO FURNISHED AN AFFI DAVIT ADMITTING HIS MISTAKE. IN THE FACTS OF THE PRESENT CASE, ON THE OTHER HAND, A PLEA SIMILAR THERETO HAS BEEN FOUND LACKING A FACTUAL BASIS. IN CIT V. USHA ASHOK A DAIRY [2005] 279 ITR 32 (P&H), THE ASSESSEE FILED ITS RETURN, ACCOMPANIED B Y AUDIT REPORT, ON NOVEMBER 29, 1985, AS AGAINST THE DUE DATE OF 30.09.1985. TH E REASONS FOR THE DELAYED FILING OF THE AUDIT REPORT, STATED AT PARA 2 OF THE JUDGME NT, WHICH WOULD APPEAL TO ANY REASONABLE PERSON, WERE FOUND REASONABLE BY THE TRI BUNAL, AND IT IS UPON THIS BASIS, ALSO DISCUSSED BY THE HONBLE COURT AT PARA 14, THAT IT UPHELD THE CONCURRENT FINDINGS OF THE FIRST AND THE SECOND APPELLATE AUTH ORITY. HOW IS THE SAID CASE LAW RELEVANT? IF ANYTHING, IT SHOWS THAT REASONABLENES S IS A MATTER OF FACT, TO BE DECIDED ON APPRECIATION OF ALL THE RELEVANT FACTS. 3.4 WE HAVE, IN FACT, AT THE VERY OUTSET, ALREADY S TATED THAT A REASONABLE CAUSE IS ESSENTIALLY A MATTER OF FACT A CAUSE (BE IT A FAC T OR CIRCUMSTANCE OR BOTH) THAT HAD LED A MAN OF ORDINARY PRUDENCE, ACTING WITH DUE DILIGENCE IN REGARD TO HIS AFFAIRS, TO COMMITTING A DEFAULT. AND, FURTHER, PRO CEEDED ON THE BASIS OF THE ASSESSEE BEING UNAWARE OF THE LEGAL REQUIREMENT I TSELF, HIGHLY IMPROBABLE AS THE PROVISION OF SECTION 44AB, COOPTED ON THE STATUTE B Y FINANCE ACT 1984, WITH EFFECT FROM 01.04.1985, IS BY NOW 30 YEARS OLD, AND A MATT ER OF COMMON KNOWLEDGE FOR THE ACCOUNTANTS, EXAMINED HIS CONDUCT TO FIND IT AS NEGLIGENT. IN FACT, THE BASIC QUESTION AS TO WHY HE DID NOT PROCEED TO FILE HIS R ETURNS FOR THE TWO SUCCESSIVE YEARS, THE SECOND OF WHICH IS BEFORE US, IN TIME, R EMAINS COMPLETELY UNANSWERED. THE DELAY IN APPROACHING HIS COUNSEL, POST FOR AY 2 012-13, THE RETURN FOR WHICH FELL DUE IN JULY, 2012, IS IN FACT NOT FOR MONTHS, BUT FOR YEARS, AS WE HAVE CLARIFIED THAT APPROACHING HIS COUNSEL IN TIME FOR EITHER YEA R (AY 2013-14 OR 2014-15) WOULD PREVENT THE DEFAULT. THE EXPLANATION ADVANCED , SUPPORTED BY AN AFFIDAVIT, WHEN EXAMINED IN THE CONTEXT OF THE FACTS OF THE CA SE, DOES NOT EXHIBIT THE COUNSELS MISTAKE AT ALL WHICH, IN SUBSTANCE, IS THE ASSESSEES EXPLANATION. PANKAJ BHOTIKA ITA NO.1710/KOL/2018 ASSESSMENT YEAR:2009-10 PAGE | 8 RATHER, THE ASSESSEES CONDUCT EXHIBITS HIS AWARENE SS OF HIS LEGAL OBLIGATIONS AND THE CONCOMITANT IMPLICATIONS. THE CITED CASE LAW WO ULD THUS BE OF LITTLE ASSISTANCE TO THE ASSESSEE. IN FACT, AS A READING THEREOF SHOW S, NO SUBSTANTIAL QUESTION OF LAW ARISES IN EITHER OF THE DECISIONS. 3.5 SO, HOWEVER, THE FACT OF THE MATTER IS THAT THE ASSESSEE HAS FILED HIS RETURNS FOR AYS 2013-14 AND 2014-15 TOGETHER ON 31.03.2015, IMP LYING THAT THE RETURNS FOR THESE YEARS, AS WELL AS THE BOOKS OF ACCOUNT FOR TH E SAME, WERE PREPARED AND, AS THE CASE MAY BE, AUDITED (U/S. 44AB) OSTENSIBLY F OR THE FIRST TIME, SIMULTANEOUSLY. THERE IS NOTHING ON RECORD TO SUGGE ST THAT THE BOOKS OF ACCOUNT FOR THESE YEARS WERE NOT COMPLETE OR NOT MAINTAINED IN THE REGULAR COURSE OF BUSINESS. THE ONLY REASON FOR THE CONTRAVENTION OF S. 44AB THAT THEREFORE EMERGES IS, AS STATED, THE ASSESSEE BEING UNAWARE OF THE AU DIT REQUIREMENT, COUPLED WITH THE DELAY IN FILING HIS RETURNS OF INCOME. THE SAID DELAY, WHICH HAS BEEN DISCUSSED IN DETAIL IN THE FOREGOING PART OF THIS ORDER, HAS NEITHER BEEN EXPLAINED BY THE ASSESSEE NOR ENQUIRED INTO. LACHES ON THE PART OF T HE ASSESSEE, WHICH THEREFORE HAS BEEN INFERRED BY US, CANNOT BE A REASONABLE CAU SE U/S. 273B. THERE COULD, HOWEVER, BE A VALID REASON FOR THE DELAY IN THE FIL ING THE SAID RETURNS, CONSTITUTING A REASONABLE CAUSE FOR THE DELAYED AUDIT. THE MATTE R, STRICTLY SPEAKING, SHOULD THEREFORE GO BACK TO THE FILE OF THE AO FOR EXAMINA TION OF THE REASON/S FOR THE DELAYED FILING OF HIS RETURNS BY THE ASSESSEE. WE, HOWEVER, IN THE FACTS AND CIRCUMSTANCES OF THE CASE, AS WELL AS CONSIDERING T HE QUANTUM OF THE PENALTY INVOLVED, DO NOT CONSIDER IT PROPER TO RESTORE THE MATTER BACK FOR THE SAME. 4. IN VIEW OF THE FOREGOING, GIVING THE ASSESSEE TH E BENEFIT OF DOUBT, SO THAT HE HAS FURNISHED A REASONABLE EXPLANATION BONA FIDE FOR TH E DELAYED AUDIT OF HIS ACCOUNTS, WE DIRECT THE DELETION OF THE IMPUGNED PE NALTY. NEEDLESS TO ADD, THIS ORDER, RENDERED IN THE PECULIAR FACTUAL MATRIX OF T HE CASE, SHALL NOT CONSTITUTE A PRECEDENT. WE DECIDE ACCORDINGLY. 12. CONSIDERING THE FACTS NARRATED ABOVE, THAT IS, THIS IS THE 1 ST YEAR OF BUSINESS OPERATION OF THE ASSESSEE, AND ASSESSEE WAS MISGUID ED BY HIS ACCOUNTANT, HENCE PENALTY SHOULD NOT BE IMPOSED. THEREFORE, RESPECTFU LLY FOLLOWING THE JUDGMENT OF THE COORDINATE BENCH, ON THE SIMILAR FACTS, IN THE CASE OF RAMESH KUMAR (SUPRA), WE ARE OF THE VIEW THAT IT IS NOT A FIT CASE TO LEV Y PENALTY U/S 271B OF THE ACT AND THEREFORE WE DELETE THE PENALTY OF RS. 73070/- 13. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED IN THE COURT ON 24.07.2019 SD/- ( S.S.GODARA ) SD/- (A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; / DATE: 24/07/2019 ( SB, SR.PS ) PANKAJ BHOTIKA ITA NO.1710/KOL/2018 ASSESSMENT YEAR:2009-10 PAGE | 9 COPY OF THE ORDER FORWARDED TO: 1. PANKAJ BHOTIKA 2. DCIT, CIRCLE-1(2), KOLKATA 3. C.I.T(A)- 4. C.I.T.- KOLKATA. 5. CIT(DR), KOLKATA BENCHES, KOLKATA. 6. GUARD FILE. TRUE COPY BY ORDER ASSIST ANT REGISTRAR ITAT, KOLKA TA BENCHES