M/S EDEN AUTOMOTIVES (P) LTD., JAIPUR V. INCOME TAX OFFICER, JAIPUR

ITA 193/JPR/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4779 (ITAT-JAIPUR)
• Duration Of Justice: 1 year(s) 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2012-2013
• Appeal Filed On: 08-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAI SINGH JCIT DHK
• Keywords: Bonafide belief; Reasonable cause
• Section: 273B; 92E; 115JB; 139(1); 139(4)

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH FOT; IKY JKWO] U;KF;D LNL; ,OA JH FOE FLAG ;K NO ] YS[KK LNL; DS LE{K BEFORE: SHRI VIJAY PAL RAO, JM AND SHRI VIKRAM SING H YADAV, AM VK;DJ VIHY LA-@ ITA NO. 193/JP/2018 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2012-13. M/S. EDEN AUTOMOTIVES PVT. LTD., E-6, MALVIYA NAGAR INDUSTRIAL AREA, JAIPUR. CUKE VS. THE INCOME TAX OFFICER, WARD 1(3), JAIPUR. LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AABCE 9108 M VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI ASHOK KUMAR GUPTA (ADVOCATE) & SHRI S.L. JAIN (ADVOCATE) JKTLO DH VKSJ LS@ REVENUE BY : SHRI JAI SINGH (JCIT) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 01.04.2019. ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 30/05/2019. VKNS'K@ ORDER PER VIJAY PAL RAO, JM : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 5 TH JULY, 2017 OF LD. CIT (A)-1, JAIPUR ARISING FROM PENALTY ORDER PASSED UNDER SECTION 271B OF THE IT ACT FOR THE ASSESSMENT YEAR 2012-13. THE ASSES SEE HAS RAISED THE FOLLOWING GROUNDS :- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, LD. CIT (A)-I JAIPUR HAS GROSSLY ERRED IN LAW AND FACTS IN CONFIRMING ORDER OF PENALTY WHICH IS BAD IN LAW AND FACTS. HEN CE LIABLE TO BE QUASHED. 2 ITA NO. 193/JP/2018 M/S. EDEN AUTOMOTIVES PVT. LTD., JAIPUR. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE LD. CIT (A)-I, JAIPUR HAS GROSSLY ERRED IN LAW AND FACTS IN CONFIRMING PENALTY OF RS. 1,50,000/-, WHICH IS TOTALLY AGAINST THE LAW AND AGAINST THE SPIRIT OF CBDT CIRCULAR NO. 3 OF 2009. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE THE ASSESSEE WAS UNDER BONAFIDE BELIEF THAT HE IS REQUI RED TO OBTAIN AUDIT REPORT BEFORE DUE DATE OF FILING OF RETURN AN D SUBMIT AS AND WHEN IT IS DEMANDED BY THE ASSESSING AUTHORITY. HENCE NO PENALTY CAN BE IMPOSED. 4. THAT THE APPELLANT RESERVES HIS RIGHT TO ADD, AM END OR ALTER ANY GROUND OR GROUNDS OF APPEAL ON OR BEFORE THE DATE O F APPEAL HEARING. 2. THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 29 TH MARCH, 2014. SINCE THE RETURN WAS FILED BELATEDLY BEYOND THE PRESCRIBED TIME LIMIT UNDER SECTION 139(1), THEREFO RE, THE AO OBSERVED THAT IN VIEW OF THE PROVISIONS OF SECTION 44AB OF THE IT ACT, TH E ASSESSEE HAD TO FILE ITS TAX AUDIT REPORT BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME. THE AO FURTHER NOTED THAT SINCE THE ASSESSEE HAS NOT FILED THE AUDIT REPORT W ITHIN THE DUE DATE OF FILING THE RETURN ON OR BEFORE 30 TH SEPTEMBER, 2012, HE INITIATED THE PENALTY PROCEEDI NGS UNDER SECTION 271B OF THE IT ACT. THE AO LEVIED TH E PENALTY OF RS. 1,50,000/- VIDE ORDER DATED 28 TH SEPTEMBER, 2015. THE ASSESSEE CHALLENGED THE ACTI ON OF THE AO BEFORE THE LD. CIT (A) AND CONTENDED THAT SINCE THE RETURN OF INCOME WAS FILED BELATEDLY ON 29 TH MARCH, 2014, THEREFORE, THERE WAS NO OCCASION FOR THE ASSESSEE TO FILE THE AUDIT REPORT PRIOR TO THE RETURN OF INCOME . IT WAS ALSO CONTENDED THAT AS PER CBDT CIRCULAR NO. 3 OF 2009 AS WELL AS NOTIFICATION NO. 24/2014 DATED 01.04.2014 THE AUDIT REPORT UNDER SECTION 44AB IS REQUIRED TO BE SUBMITTED ON-LINE ONLY FROM THE ASSESSMENT YEAR 2013-14 ONWARDS. THUS THE ASSESSEE CONTENDED THAT THE AMENDED 3 ITA NO. 193/JP/2018 M/S. EDEN AUTOMOTIVES PVT. LTD., JAIPUR. PROVISIONS OF RULE 12(2) OF THE IT RULES ARE NOT AP PLICABLE FOR THE YEAR UNDER CONSIDERATION. LASTLY, THE ASSESSEE SUBMITTED THAT DUE TO UNAVOIDABLE CIRCUMSTANCES THE ASSESSEE COULD NOT FILE THE RETURN OF INCOME BE FORE THE DUE DATE AS PER PROVISIONS OF SECTION 139(1) OF THE ACT BUT THE RET URN WAS FILED UNDER SECTION 139(4) OF THE ACT AND, THEREFORE, THE ASSESSEE HAS BONAFID E REASONS AND EXPLANATION FOR NOT FILING THE AUDIT REPORT AS PER PROVISIONS OF SECTIO N 44AB OF THE ACT. THE LD. CIT (A) COULD NOT ACCEPT THE EXPLANATION OF THE ASSESSEE AN D CONFIRMED THE LEVY OF PENALTY. 3. BEFORE US, THE LD. A/R OF THE ASSESSEE HAS REITE RATED HIS CONTENTION AND SUBMITTED THAT THE ASSESSEE HAS GIVEN THE DATE OF A UDIT REPORT IN THE RETURN OF INCOME AND, THEREFORE, IT IS NOT A CASE OF NON-AUDI T REPORT BUT SINCE THE RETURN OF INCOME ITSELF WAS FILED BELATEDLY, THEREFORE, THERE WAS A DELAY IN FILING THE AUDIT REPORT. HE HAS REFERRED TO THE RETURN OF INCOME AN D SUBMITTED THAT THE DATE OF AUDIT REPORT IS CLEARLY GIVEN IN THE RETURN OF INCOME AS ON 2 ND SEPTEMBER, 2012 WHICH IS BEFORE THE DUE DATE OF FILING OF RETURN UNDER SECTI ON 139(1) OF THE IT ACT. THE AO HAS COMPLETED THE ASSESSMENT ON THE RETURN OF INCOM E FILED BY THE ASSESSEE. THEREFORE, ASSESSEE CANNOT BE PENALIZED UNDER SECTI ON 271B OF THE IT ACT WHEN THE AUDIT REPORT WAS FILED ALONG WITH THE RETURN OF INC OME. HE HAS RELIED UPON THE DECISION OF HONBLE PUNJAB & HARYANA HIGH COURT IN CASE OF CIT VS. K.K. SPUN PIPE, 284 ITR 301 (P&H). THUS THE LD. A/R HAS SUBMITTED THAT EVEN OTHERWISE WHEN THE ASSESSEE HAS EXPLAINED THE REASONS FOR FILING THE B ELATED RETURN OF INCOME ALONG WITH THE AUDIT REPORT, THEN IN VIEW OF PROVISIONS OF SEC TION 273B NO PENALTY IS LEVIABLE IN THE CASE OF THE ASSESSEE. HE HAS ALSO REITERATED H IS CONTENTION THAT THE AMENDED PROVISIONS OF RULE 12(2) ARE APPLICABLE FROM THE AS SESSMENT YEAR 2013-14 AND NOT 4 ITA NO. 193/JP/2018 M/S. EDEN AUTOMOTIVES PVT. LTD., JAIPUR. FROM THE YEAR UNDER CONSIDERATION. HENCE THE LD. A/ R HAS PLEADED THAT THE PENALTY LEVIED UNDER SECTION 271B MAY BE DELETED. 4. ON THE OTHER HAND, THE LD. D/R HAS SUBMITTED THA T RULE 12(2) IS A PROCEDURAL PROVISION AND WILL BE APPLICABLE AS ON THE DATE OF FILING OF THE RETURN INSTEAD OF ASSESSMENT YEAR. SINCE THE ASSESSEE HAS FILED THE RETURN ON 29 TH MARCH, 2014 BEFORE THAT THE RULE 12(2) OF THE IT RULES WAS AMEN DED BY FINANCE ACT, 2012 WITH EFFECT FROM 01.04.2013, THEREFORE, THE ASSESSEE WAS REQUIRED TO COMPLY WITH THE EXISTING RULES AT THE RELEVANT POINT OF TIME. HE H AS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS THE RELEVANT MATERIAL ON RECORD. THE AO HAS LEVIED THE PENALTY ON ACCOUNT O F FAILURE OF THE ASSESSEE TO FILE THE AUDIT REPORT BEFORE THE DUE DATE OF FILING THE RETURN UNDER SECTION 139(1) OF THE IT ACT I.E. 30 TH SEPTEMBER, 2012. SINCE THE ASSESSEE HAS FILED THE RETURN OF INCOME ON 29 TH MARCH, 2014, THEREFORE, THE AO CONSIDERED THIS LAT E FILING OF THE RETURN ALONG WITH THE AUDIT REPORT AS VIOLATION OF PROVISIONS OF SECTION 44AB AND CONSEQUENTLY THE AO LEVIED THE PENALTY UNDER SECTION 271B OF THE ACT . THE LD. CIT (A) HAS CONFIRMED THE SAID ACTION OF THE AO AS UNDER :- (IV) IT IS AN UNDISPUTED FACT THAT THE APPELLANT HAS FILED ITS RETURN OF INCOME ON 29.03.2014 ELECTRONICALLY AND THE PROCEDU RAL LAW AS APPLICABLE ON THE SAID DATE IS TO BE CONSIDERED. IT WOULD BE RELEVANT TO REPRODUCE PROVISIONS OF RULE 12(2) OF THE I.T. RULE AS EXISTING AT THE RELEVANT POINT OF TIME I.E. ON 29.03.2014 AS UNDER :- 5 ITA NO. 193/JP/2018 M/S. EDEN AUTOMOTIVES PVT. LTD., JAIPUR. (2) THE RETURN OF INCOME REQUIRED TO BE FURNISHED IN FORM SAHAJ (ITR-1) OR FORM NO. ITR-2 OR FORM NO. ITR-3 O R FORM SUGAM (ITR-4S) OR FORM NO. ITR-4 OR FORM NO. ITR-5 OR FORM NO. ITR-6 (OR FORM NO. ITR-7) SHALL NOT BE ACCOMPAN IED BY A STATEMENT SHOWING THE COMPUTATION OF THE TAX PAYABL E ON THE BASIS OF THE RETURN, OR PROOF OF THE TAX, IF ANY, C LAIMED TO HAVE BEEN DEDUCTED OR COLLECTED AT SOURCE OR THE ADVANCE TAX OR TAX ON SELF ASSESSMENT, IF ANY, CLAIMED TO HAVE BEEN PA ID OR ANY DOCUMENT OR COPY OF ANY ACCOUNT OF FORM OR REPORT O F AUDIT REQUIRED TO BE ATTACHED WITH THE RETURN OF INCOME U NDER ANY OF THE PROVISIONS OF THE ACT. PROVIDED THAT WHERE AN ASSESSEE IS REQUIRED TO FURN ISH A REPORT OF AUDIT SPECIFIED UNDER SUB-CLAUSE (IV), (V), (VI) OR VIA) OF CLAUSE (23C OF SECTION 10, SECTION 10A, CLAUSE (B) OF SUB SECTION (1) OF SECTION 12A, SECTION 44AB, SECTION 80IA, SECTION 80 IB, SECTION 80IC, SECTION 80ID, SECTION 80JJAA, SECTION 80LA SE CTION 92E OR SECTION 115JB OF THE ACT, HE SHALL FURNISH THE SAME ELECTRONICALLY. (V) THUS, ON THE DATE OF FILING OF ITS RETURN OF IN COME, THE APPELLANT WAS REQUIRED TO FILE ITS AUDIT REPORT ELECTRONICALL Y WHICH WAS NOT DONE BY THE APPELLANT. HAD THE APPELLANT FILED ITS RETUR N OF INCOME BEFORE THE ABOVE AMENDMENT MADE IN RULE 12(2) OF THE IT RULES W.E.F. 01.04.2013, IT WOULD NOT BE REQUIRED TO FILE ITS AU DIT REPORT ELECTRONICALLY BUT THAT IS NOT THE CASE. THEREFORE , IN VIEW OF THE TOTALITY OF FACTS AND CIRCUMSTANCES OF THE CASE, IT IS HELD THAT THE APPELLANT HAS NOT COMPLIED WITH THE PROVISIONS OF SECTION 44AB OF THE ACT TO BE READ WITH RULE 12 OF THE IT RULES AND THUS THE AO WAS JU STIFIED IN IMPOSING 6 ITA NO. 193/JP/2018 M/S. EDEN AUTOMOTIVES PVT. LTD., JAIPUR. PENALTY OF RS. 1.50 LAC U/S 271B OF THE ACT AND HEN CE THE SAME IS HEREBY UPHELD. THUS THE LD. CIT (A) HAS APPLIED THE AMENDED PROVIS IONS OF RULE 12(2) OF THE IT RULES AS ON THE DATE OF FILING OF THE RETURN BY THE ASSESSEE ON 29 TH MARCH, 2014. IT IS PERTINENT TO NOTE THAT THE AO HAS NOT LEVIED THE PENALTY FOR NOT FILING OF THE AUDIT REPORT ALONG WITH THE RETURN OF INCOME FILED BY THE ASSESSEE ON 29 TH MARCH, 2014 BUT THE AO HAS LEVIED THE PENALTY DUE TO THE DELAY IN F ILING THE AUDIT REPORT AS IT WAS FILED ALONG WITH THE RETURN OF INCOME ON 29 TH MARCH, 2014. FURTHER, THE RULE 12(2) EVEN IF IT IS CONSIDERED TO BE APPLIED AS ON THE DA TE OF FILING THE RETURN, THE RELEVANT DATE IS THE DUE DATE OF FILING THE RETURN UNDER SEC TION 139(1). HENCE WHEN THE ASSESSEE HAS ALREADY FILED THE AUDIT REPORT ON 29.0 3.2014 AND AS PER THE RETURN OF INCOME THE AUDIT REPORT WAS ALREADY OBTAINED AND RE AD ON 2 ND SEPTEMBER, 2012, THEN IN THE FACTS AND CIRCUMSTANCES OF THE CASE PRI OR TO THE RETURN OF INCOME FILED BY THE ASSESSEE THERE WAS NO OCCASION FOR THE ASSESSEE TO FILE THE AUDIT REPORT SEPARATELY. FURTHER, THE AMENDED PROVISIONS OF RUL E 12(2) CAME INTO EFFECT FROM 01.04.2013 WHEREAS THE DUE DATE OF FILING THE RETUR N UNDER SECTION 139(1) IS 30 TH SEPTEMBER, 2012 AND HENCE WHEN THE AMENDED RULE WAS NOT APPLICABLE AS ON 30 TH SEPTEMBER, 2012, THE ASSESSEE HAS MADE OUT THE CLEA R CASE OF REASONABLE CAUSE FOR NOT COMPLYING WITH THE PROVISIONS OF SECTION 44AB A ND CONSEQUENTLY THE CASE OF THE ASSESSEE CLEARLY FALLS UNDER THE PROVISIONS OF SECT ION 273B OF THE ACT. ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN VIEW OF DECISION OF HONBLE PUNJAB & 7 ITA NO. 193/JP/2018 M/S. EDEN AUTOMOTIVES PVT. LTD., JAIPUR. HARYANA HIGH COURT IN CASE OF CIT VS. K.K. SPUN PIP E (SUPRA), THE PENALTY LEVIED UNDER SECTION 271B IS NOT SUSTAINABLE AND THE SAME IS DELETED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED . ORDER IS PRONOUNCED IN THE OPEN COURT ON 30/05/2 019. SD/- SD/- ( FOE FLAG ;KNO ) ( FOT; IKY JKWO (VIKRAM SINGH YADAV ) (VIJAY PAL RAO) YS[KK LNL;@ ACCOUNTANT MEMBER U;KF;D LNL;@ JUDICIAL MEMBER JAIPUR DATED:- 30/05/2019. DAS/ VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. THE APPELLANT- M/S.EDEN AUTOMOTIVES PVT. LTD., J AIPUR. 2. THE RESPONDENT THE ITO WARD 1(3), JAIPUR. 3. THE CIT(A). 4. THE CIT, 5. THE DR, ITAT, JAIPUR 6. GUARD FILE (ITA NO. 193/JP/2018) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR 8 ITA NO. 193/JP/2018 M/S. EDEN AUTOMOTIVES PVT. LTD., JAIPUR.