S. Prabhakar, CHENNAI V. ACIT, CHENNAI

ITA 174/CHNY/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 81137 (ITAT-CHENNAI)
• Duration Of Justice: 7 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-08-2014
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 08-07-2014
• Assessment Year: 2005-2006
• Appeal Filed On: 17-01-2014
• Court: TRIBUNAL
• Department Lawyers: DURGESH SUMROTT
• Assessee Lawyers: G BASKAR
• Section: 143(3); 153A

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHE NNAI . . . , ! , ' # $ BEFORE DR. O.K. NARAYANAN, VICE PRESIDENT & SHRI VIKAS AWASTHY, JUDICIAL MEMBER I.T.A. NOS.172, 174 & 175/MDS/2014 ASSESSMENT YEARS : 2004-05, 2005-06 & 2007-08 SHRI S.PRABHAKAR, 10 (OLD NO.28), ASHOK AVENUE, DIRECTORS COLONY, KODAMBAKKAM, CHENNAI-600 024 [PAN: AHJPP 0120 C] ( !% /APPELLANT) VS THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-IV(2), CHENNAI ( &'!% /RESPONDENT) / APPELLANT BY : MR.G.BASKAR, ADVOCATE / RESPONDENT BY : MR.DURGESH SUMROTT, CIT / DATE OF HEARING : 08-07-2014 / DATE OF PRONOUNCEMENT : 28-08-2014 #( / O R D E R PER VIKAS AWASTHY, J.M: THE APPEALS HAVE BEEN FILED BY THE ASSESSEE ASSAIL ING THE ORDER OF THE COMMISSIONER OF INCOME TAX, APPEALS(CE NTRAL)-I, CHENNAI, DATED 31-10-2013. THE IMPUGNED ORDER IS C OMMON FOR ALL THE THREE IMPUGNED ASSESSMENT YEARS (AYS) I.E., 2004-05, 2005-06 & 2007-08. THE APPEALS ARE ARISING FROM PE NALTY PROCEEDINGS U/S.271B OF THE INCOME TAX ACT, 1961 (H EREIN AFTER REFERRED TO AS THE ACT). I.T.A. NOS. 172, 174 & 175/MDS/2014 2 2. THE FACTS AS EMANATING FROM RECORDS ARE AS UNDER : THE ASSESSEE IS ENGAGED IN THE BUSINESS OF REAL ES TATE. A SEARCH OPERATION U/S.132 WAS CONDUCTED ON 10-01-200 8 IN THE CASE OF ASSESSEE. NOTICE U/S.153C DT.03-09-2009 WA S ISSUED TO THE ASSESSEE. IN RESPONSE TO THE NOTICE, THE ASSES SEE FILED LETTER STATING, THAT RETURN ALREADY FILED FOR THE RESPECTI VE AYS MAY BE TAKEN AS RETURN IN RESPONSE TO NOTICE U/S.153C OF T HE ACT. HOWEVER, IN RESPECT OF AY.2007-08, SINCE THE ASSESS EE HAD NOT FILED ANY EARLIER RETURN, THE ASSESSEE FILED RETURN OF INCOME ON 16-09-2009. ALONG WITH RETURN, THE ASSESSEE FILED AUDIT REPORT AS ENVISAGED U/S.44AB OF THE ACT. THE ASSESSMENTS FOR ALL THE THREE AYS IN CONSIDERATION WERE COMPLETED U/S.153C R.W.S. 153A R.W.S. 143(3) OF THE ACT. THE ASSESSING OFFICER HELD THAT SINCE THE ASSESSEE HAD NOT FILED AUDIT REPORT WITHIN THE SPEC IFIED TIME, THE ASSESSEE IS LIABLE FOR PENALTY U/S.271B. THE ACIT VIDE SEPARATE ORDERS DT.30-06-2010, FOR THE AYS.2004-05, 2005-06 & 2007-08 LEVIED PENALTY FOR DELAY IN FILING OF AUDIT REPORT U/S.271B. AGGRIEVED BY THE PENALTY ORDERS, THE ASSESSEE PREF ERRED APPEALS BEFORE THE CIT(APPEALS). THE CIT(APPEALS) VIDE COMMON IMPUGNED ORDER, DISMISSED THE APPEALS OF THE ASSESS EE. I.T.A. NOS. 172, 174 & 175/MDS/2014 3 NOW, THE ASSESSEE HAS COME IN SECOND APPEAL BEFORE THE TRIBUNAL IMPUGNING THE ORDER OF CIT(APPEALS) IN CON FIRMING THE LEVY OF PENALTY U/S.271B. 3. SHRI G.BASKAR, ADVOCATE APPEARING ON BEHALF OF THE ASSESSEE SUBMITTED THAT REGULAR RETURNS FOR THE AYS.2004-05 AND 2005-06 WERE FILED WITHOUT AUDIT REPORT. THE ASSESSMENT IN THE AFORESAID AYS WAS MADE U/S.143(1). THEREAFTER, CONSEQUENT TO THE SEARCH PROCEEDINGS, NOTICE U/S.153C WAS RECEIVED BY THE AS SESSEE. THE ASSESSEE FILED AUDIT REPORT ALONG WITH THE RETURN F ILED IN RESPONSE TO NOTICE U/S.153C. FOR THE AY.2007-08, ASSESSEE F ILED REGULAR RETURN OF INCOME ALONG WITH THE AUDIT REPORT. HOWE VER, THERE WAS DELAY IN FILING RETURN OF INCOME. THE LD.AR CONTEN DED THAT THE ASSESSEE WAS IGNORANT ABOUT GETTING THE ACCOUNTS AU DITED. AS SOON AS THE ASSESSEE LEARNT THAT THE ACCOUNTS WERE REQUIRED TO BE AUDITED, HE GOT THE NEEDFUL DONE AND FILED THE AUDI T REPORTS. IN ORDER TO SUPPORT HIS CONTENTIONS, THE LD.COUNSEL PL ACED RELIANCE ON THE DECISION OF HON'BLE MADRAS HIGH COURT IN THE CAS E OF CIT VS. INDIAN GOSPEL FELLOWSHIP TRUST REPORTED AS 331 ITR 283 (MDS). 4. ON THE OTHER HAND, SHRI DURGESH SUMROTT, APPEARI NG ON BEHALF OF THE REVENUE VEHEMENTLY SUPPORTED THE ORDE R OF THE I.T.A. NOS. 172, 174 & 175/MDS/2014 4 AUTHORITIES BELOW AND PRAYED FOR DISMISSING THE APP EALS OF THE ASSESSEE. THE LD.DR CONTENDED THAT IGNORANCE OF LA W IS NOT AN EXCUSE. UNDER THE PROVISION OF SECTION 44AB, THE A SSESSEE WAS BOUND TO GET HIS ACCOUNTS AUDITED AND FILE AUDIT RE PORT WITHIN THE SPECIFIED TIME. THE ASSESSEE HAS FAILED TO COMPLY WITH THE PROVISIONS OF LAW. THEREFORE, THE ORDER LEVYING P ENALTY U/S.271B IS JUSTIFIED. 5. WE HAVE HEARD THE SUBMISSIONS MADE BY THE REPRESENTATIVES OF BOTH THE SIDES, AND HAVE ALSO PE RUSED THE ORDERS OF THE AUTHORITIES BELOW. IT IS AN UN-DISPU TED FACT THAT THE ASSESSEE HAS NOT FILED AUDIT REPORT ALONG WITH THE ORIGINAL RETURN OF INCOME. HOWEVER, THE ASSESSEE HAS FILED AUDIT REPO RT ALONG WITH RETURN FILED IN RESPONSE TO NOTICE U/S.153C FOR ALL THE AYS UNDER CONSIDERATION. IN AY.2007-08, THE ASSESSEE HAS NOT FILED ANY RETURN OF INCOME WITHIN THE TIME SPECIFIED U/S.139( 1). THE RETURN IS FILED ONLY IN RESPONSE TO NOTICE U/S.153C. IT IS A WELL SETTLED LAW THAT IN CASE RETURN IS FILED U/S.153C, THE ORIGINAL RETURN FILED U/S.139(1) BECOMES NON-EST. SINCE, THE ASSESSEE HA S FILED AUDIT REPORT ALONG WITH RETURN FILED IN RESPONSE TO NOTIC E U/S.153C FOR THE AYS.2004-05 & 2005-06, THE ASSESSEE HAS COMPLIED WI TH THE PROVISIONS OF THE ACT. I.T.A. NOS. 172, 174 & 175/MDS/2014 5 AS FAR AS AY.2007-08 IS CONCERNED, THE ASSESSEE HA S FILED AUDIT REPORT ALONG THE BELATED RETURN OF INCOME. T HE ASSESSEE HAS COMPLIED WITH THE SUBSTANTIVE PROVISIONS OF SECTION 44AB. THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS. APEX LABORATORIES P. LTD., REPORTED AS 284 ITR 364 HAS HELD THAT WHERE AUDIT REPORT IS FILED ALONG WITH BELATED RETURN, PE NALTY U/S.271B CANNOT BE IMPOSED. 6. IN VIEW OF THE FACT THAT THE ASSESSEE HAS COMPLI ED WITH THE BASIC PROVISIONS OF SECTION 44AB, THE PENALTY LEVIE D U/S.271B IS DELETED. THE IMPUGNED ORDER IS SET ASIDE AND THE A PPEALS OF THE ASSESSEE ARE ALLOWED. ORDER PRONOUNCED ON THURSDAY, THE 28 TH AUGUST, 2014 AT CHENNAI. SD/- SD/- ( . . . ) ( ! ) (DR. O.K. NARAYANAN) (VIKAS AWAS THY) / VICE PRESIDENT ! '# / JUDICIAL MEMBER $ /CHENNAI, %'& /DATED: 28 TH AUGUST, 2014 TNMM ''(!)*+* /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ' ' ,-. /CIT(A) 4. ' ' , /CIT 5. */0!!12 /DR 6. 0345 /GF