RITESH KHURANA, NAGPUR V. INCOME TAX OFFICER,WARD -4(2), NAGPUR

ITA 172/NAG/2022

• Counselvise Citation: [2024] 100 COUNSELVISE.COM (IT) 3998 (ITAT-NAGPUR)
• Duration Of Justice: 1 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-02-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 01-02-2024
• Assessment Year: 2016-2017
• Appeal Filed On: 26-05-2022
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHAY Y. MARATHE
• Section: 44AB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL NAGPUR BENCH, NAGPUR – VIRTUAL COURT BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S. S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA No.172/NAG/2022 Assessment Year : 2016-17 Ritesh Khurana, 107, Near Panch Bhavan, Queta Colony, Nagpur, Maharashtra 440 008 PAN : AFOPK2308G Vs. ITO, Ward-4(2), Nagpur Appellant Respondent आदेश / ORDER PER INTURI RAMA RAO, AM: This is an appeal filed by the assessee directed against the order of CIT(A) in National Faceless Appeal Centre, Delhi [‘NFAC’] dated 29.03.2022 confirming the levy of penalty u/s.271B of the Income Tax Act, 1961 (‘the Act’) for the assessment year 2016-17. 2. The appellant had raised the following grounds of appeal : 1. The order of the Learned CIT(A) is Bad in Law and on facts. 2. Learned CIT(A), erred in sustaining penalty u/s.271B – Rs.1,50,000/- Assessee by : Shri K.K. Thakkar Revenue by : Shri Abhay Y. Marathe Date of hearing : 02.02.2024 Date of pronouncement : 02.02.2024 ITA No.172/NAG/2022 2 2. Briefly, the facts of the case are that the appellant is an individual who filed his return of income for the A.Y. 2016-17 on 16.03.2017 declaring total income at Rs.6,23,510/-. The assessment was completed by the Assessing Officer (AO) determining total income at Rs.7,01,510/-. It was observed by the AO that the appellant failed to get the accounts audited u/s.44AB of the Act before the stipulated date even though the gross turnover was above the threshold limit. Eventually, the AO levied penalty of Rs.1,50,000/- . Aggrieved by the order of the Assessing Officer, the appellant carried the matter before the CIT(A) who confirmed the said penalty. 3. Before the Tribunal, the assessee contested the confirmation of penalty by the CIT(A). 4. We have heard the rival submissions and perused the relevant material on record. On perusal of the order of CIT(A), it is evident that the CIT(A) has dismissed the appeal on the ground of delay as well as on merits. During the proceedings before the CIT(A), it was stated before him that the delay of 322 days had occurred on account of the fact that the Accountant had resigned. Thus, the appellant was unaware of the order. In the absence of any evidence contrary to the explanation stated by the assessee, the CIT(A) ought to have ITA No.172/NAG/2022 3 condoned the delay of 322 days. Accordingly, we condone the delay and admit the appeal for adjudication on merits. 5. As regards the imposition of penalty u/s.271B, it was stated that the appellant was unaware of the statutory provisions governing the Audit u/s.44AB of the Act. The turnover of the appellant was beyond the prescribed limits under the said provisions for the first time. Though it is settled position of law that ignorance of law is not an excuse but it cannot be ruled out that assessee entertained the bonafide belief that it is not under obligation to get accounts audited under the provisions of section 44AB of the Act. Therefore, in our considered opinion, it constitutes a reasonable cause for not getting the accounts audited u/s.44AB of the Act and is not a fit case for levy of penalty. In the circumstances, we direct the Assessing Officer to delete the penalty of Rs.1,50,000/- levied u/s.271B of the Act. 6. In the result, the appeal filed by the assessee is allowed. Order pronounced on this 02 nd day of February, 2024. Sd/- Sd/- (S. S. VISWANETHRA RAVI) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; दनांक / Dated : 02 nd February, 2024. Satish ITA No.172/NAG/2022 4 आदेश क ितिलिप अ ेिषत / Copy of the Order forwarded to : 1. अपीलाथ / The Appellant. 2. यथ / The Respondent. 3. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, नागपुर / DR, ITAT, Nagpur. 4. गाड फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. Date 1. Draft dictated on 02-02-2024 Sr.PS 2. Draft placed before author 02-02-2024 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order.