R.Krishnaveni, CHENNAI V. ITO, CHENNAI

ITA 1936/CHNY/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 8058 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-01-2017
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 22-12-2016
• Assessment Year: 2013-2014
• Appeal Filed On: 27-06-2016
• Court: TRIBUNAL
• Department Lawyers: SUPRIYO PAL
• Assessee Lawyers: Y SRIDHARC A
• Section: 139

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : CHENNAI , ! ' ! # . $% & '( BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ./ I.T.A.NO.1936/MDS./2016 / ASSESSMENT YEAR : 2013-14 SMT.R.KRISHAVENI, 4,VELAYUTHAM NAGAR, EASANI MOORTHY KOIL STREET, THIRUVOTTIYUR, CHENNAI 600 019. VS. THE ITO, NON CORPORATE WARD 5(1), CHENNAI. [PAN AOGPK 2120 R] ( )* / APPELLANT) ( +,)* /RESPONDENT) / APPELLANT BY : MR.Y.SRIDHAR,C.A /RESPONDENT BY : SHRI SUPRIYO PAL, JCIT D.R / DATE OF HEARING : 22 - 12 - 2016 / DATE OF PRONOUNCEMENT : 25 - 01 - 2017 - / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL OF THE ASSESSEEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-5,CHEN NAI DATED 06.04.2016 PERTAINING TO ASSESSMENT YEAR 2013-14 CONFIRMING THE PENALTY LEVIED U/S.271B OF THE ACT. ITA NO.1936/16 :- 2 -: 2. THE FACTS OF THE ISSUE ARE THAT THE ASSESSEE HA D FILED HER RETURN OF INCOME ADMITTING AN INCOME OF ` 8,57,910/- AND IN PROFIT AND LOSS ACCOUNT, ASSESSEE ADMITTED GROSS SALES OF `2,20,66,927 , WHICH REQUIRED THE ASSESSEE TO COMPLY WITH THE PROVISIONS 44AB OF THE ACT. AS PER THE GUIDELINES/INSTRUCTION F.NO.225/117/2013 ITA.II DATED 26.9.2013 WHICH IS REPRODUCED AS FOLLOWS CBDT IN EXERCISE OF POWER UNDER SEC 119(2)(A) OF THE L.T. ACT, 1961 READ WITH SEC 139 A ND RULE 12, HAS DECIDED TO RELAX THE REQUIREMENT OF FURNISHING THE REPORT O F AUDIT ELECTRONICALLY AS PRESCRIBED UNDER THE PROVISO TO SUB-RULE (2) OF RUL E 12 OF THE IT RULES FOR THE ASSESSMENT YEAR 201314 AS UNDER:- (C) THE ASSESSEES, WHO ARE PRESENTLY FINDING IT DIF FICULT TO UPLOAD THE PRESCRIBED REPORT OF AUDIT (AS REFERRED TO ABOVE) I N THE SYSTEM ELECTRONICALLY MAY ALSO FURNISH THE SAME MANUALLY BEFORETHE JURISD ICTIONAL ASSESSING OFFICER WITHIN THE PRESCRIBED DUE DATE. (D) THE SAID REPORT OF AUDIT SHOULD HOWEVER BE FURN ISHED ELECTRONICALLY ON OR BEFORE 31.10.2013. FURTHER VIDE CIRCULAR/INSTRUCTION/DIRECTION ISSUED BY CBDT IN NO. F.NO.225/117//2013/ITA1I DATED-24,10.2013 THE CBDT HAD INSTRUCTED VIDE ORDER UNDER SECTION 119 OF THE INCOME TAX ACT, 1961 , IN EXERCISE OF POWERS CONFERRED UNDER SECTION 119 OF THE INCOME-TAX ACT, 1961, THE CENTRAL BOARD DIRECT TAXES, IN CONTINUATION TO ORDER U/S 119 DATE D 26.09.2013 F.NO.225/117/2013/ITA.11, HEREBY DIRECTS THAT IN CA SES WHERE THE DUE DATE OF FURNISHING REPORTS OF AUDIT AND CORRESPOND ING INCOME-TAX RETURN WAS 30TH SEPTEMBER, 2013 SUCH REPORTS OF AUDIT AND RETU RNS OF INCOME SHALL BE DEEMED TO HAVE BEEN FURNISHED WITHIN THE DUE DATE PRESCRIBED UNDER ITA NO.1936/16 :- 3 -: SECTION 139 OF THE INCOME TAX ACT 1961. HENCE, THE AO LEVIED THE PENALTY U/S.271B OF THE ACT. AGGRIEVED, ASSESSEE CARRIED TH E APPEAL BEFORE THE LD.CIT(A). 2.1 THE LD.CIT(A) OBSERVED THAT THE ASSESSEE HAD N OT FURNISHED OR FILED THE AUDIT REPORT PRESCRIBED U/S 44AB OF THE I.T. AC T 1961 BEFORE THE ASSESSING OFFICER AS PER THE GUIDELINE MENTIONED AB OVE. HENCE PENALTY U/S 271B WAS INITIATED BY ISSUE OF NOTICE U/S 271B DATE D 30/9/2014 WHICH WAS DULY SERVED ON THE ASSESSEE. CONSEQUENTLY, THE AO LEVIED THE PENALTY OF 1.5 LAKHS U/S.271B OF THE ACT, WHICH WAS CONFIRMED BY T HE LD.CIT(A). AGAINST THE ORDER OF LD.CIT(A), THE ASSESSEE IS IN APPEAL B EFORE US. 3. WE HAVE HEARD BOTH THE PARTIES AND PERUSED TH E MATERIAL ON RECORD. IN THIS CASE, THE ASSESSEE FILED HER RETURN OF INCOME ON 18.10.2013. SINCE THERE WAS AN EXTENDED TIME FOR F ILING HER RETURN OF INCOME FOR ASSESSMENT YEAR 2013-14 UPTO 31.10.2013 VIDE CBDT INSTRUCTION F.NO.225/117/2013 ITA-II DATED 26/09/ 2013. THE ASSESSEE HAD NOT FILED HER AUDIT REPORT U/S.44AB OF THE ACT ELECTRONICALLY ALONG WITH RETURN OF INCOME. ON THE OTHER HAND, THE ASSESSEE FILED THE AUDIT REPORT DATED 18.10.2013 MA NUALLY ON 22.10.13 VIDE HER LETTER DATED 19.10.2013, WHICH IS KEPT AT PAGE-35 OF PAPER BOOK. LD.A.R SUBMITTED THAT DUE TO TECHNICAL DIFFIC ULTIES, THE ASSESSEE FAILED TO FILE THE AUDIT REPORT ALONG WITH RETURN O F INCOME ON 18.10.2013. HOWEVER, IT WAS FILED MANUALLY ON 22.1 0.2013 AND IT WAS ITA NO.1936/16 :- 4 -: ELECTRONICALLY FILED IN RESPONSE TO NOTICE FOR LEVY OF PENALTY ON 17.10.2014. ACCORDING TO THE ASSESSEES COUNSEL, T HE FILING OF AUDIT REPORT MANUALLY WITHIN THE DUE DATE ON 22.10.2013 T O BE CONSIDERED AS PROPER COMPLIANCE OF PROVISIONS OF THE SECTION 44AB OF THE ACT AND NO PENALTY U/S.271B OF THE ACT TO BE LEVIED. FOR THIS PURPOSE, THE ASSESSEE RELIED ON THE JUDGEMENT OF ITAT CHENNAI I N THE CASE OF GEMINI COMMUNICATIONS LTD. VS. ACIT IN ITA NO.1252/ MDS./2012 FOR ASSESSMENT YEAR 2008-09 VIDE ORDER DATED 28 TH AUGUST, 2012 WHEREIN HELD THAT: 12. .. NOWHERE IN THE ACT OR RULES, THERE IS A M ANDATORY PROVISION THAT THE RETURN MUST BE FILED ONLY ELECTR ONICALLY. THIS COMPULSION HAS BEEN MADE AS A RESULT OF THE DIRECTI ON ISSUED BY THE CBDT. AS RIGHTLY ARGUED BY THE LEARNED COUNSEL , THE DIRECTION OF THE CBDT CANNOT GO BEYOND THE ACT AND RULES. IT CANNOT OVERTAKE THE APPARENT WORDS OF THE STATUTE. THEREFORE, WHAT WE CAN HOLD IS THAT FILING OF RETURN ELECTRONI CALLY IS A DIRECTORY PROVISION AND IF THE RETURN IS FILED MANU ALLY ON OR BEFORE DUE DATE, SUCH RETURN CANNOT BE IGNORED. TH E MAXIMUM THE ASSESSING OFFICER CAN ASK THE ASSESSEE IS TO FI LE THE RETURN AGAIN ELECTRONICALLY, SO THAT THE TECHNICALITY OF P ROCESSING IS SATISFIED. THIS IS ONLY FOR THE ADMINISTRATIVE CON VENIENCE OF THE INCOME-TAX DEPARTMENT. 13. THEREFORE, THE ASSESSING OFFICER IS NOT JUSTIFI ED IN IGNORING THE MANUAL RETURN FILED BY THE ASSESSEE BEFORE THE DUE DATE OF FILING OF RETURN. FOR THE PURPOSE OF SEC.139(1), THE ASSESSEE HAS FILED ITS RETURN BEFORE THE DUE DATE. ITA NO.1936/16 :- 5 -: 3.1 FURTHER, HE RELIED ON THE JUDGEMENT OF JURIDI CITIONAL HIGH COURT IN THE CASE OF L.S.LAKSHMANASWAMY VS. CIT DAT ED 09.06.07 WHEREIN HELD THAT NO PENALTY SHALL BE IMPOSABLE ON THE PERSON OR THE ASSESSEE, AS THE CASE MAY BE, FOR ANY FAILURE REFER RED TO IN THE SAID PROVISIONS IF HE PROVES THAT THERE WAS REASONABLE C UASE FOR THE SAID FAILURE. THE LD.A.R ALSO RELIED ON THE JUDGEMENT OF P&H HIGH COURT IN THE CASE OF CIT VS. ASHOKA DAIRY IN [2005] 279 ITR 32 WHEREIN HELD THAT WHERE ASSESSEE EXPLAINED DELAY IN FILING AUDI T REPORT BY STATING THAT ITS PARTNERS WERE NOT WELL EDUCATED, THAT ITS ACCOUNTANT HAD LEFT SERVICE AND THAT C.A HAD DELAYED PREPARATION OF AUD IT REPORT, TRIBUNAL WAS JUSTIFIED IN DELETING PENALTY. FURTHER, HE PL ACED RELIANCE ON THE JUDGEMENT OF JURISDICTIONAL HIGH COURT IN THE CASE OF THANJAVUR SILK HANDLOOM WEAVERS CO-OPERATIVE PRODUCTON & SALES SOC IETY LTD. VS. UOI IN [2003] 263 ITR 334 WHEREIN HELD THAT MERE F AILURE TO FILE AUDIT REPORT IN TIME WILL NOT JUSTIFY LEVY OF PENALTY AS POWER UNDER SECTION 271B IS DISCRETIONARY. 4. IN OUR OPINION, THERE WAS A DELAY IN FILING AUD IT REPORT U/S.44AB OF THE ACT ELECTRONICALLY. HOWEVER, THE A SSESSEE FILED THE SAME MANUALLY BEFORE THE DUE DATE FOR FILING THE R ETURN OF INCOME AND AUDIT REPORT , IT SHOULD BE CONSIDERED AS PROPER CO MPLIANCE UNDER PROVISIONS OF THE SECTION 44AB OF THE ACT. ACCORDIN GLY, WE ARE OF THE ITA NO.1936/16 :- 6 -: OPINION THAT THIS CASE IS NOT A FIT CASE FOR LEVY O F PENALTY U/S.271B OF THE ACT. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED. ORDER PRONOUNCED ON 25 TH JANUARY, 2017, AT CHENNAI. SD/ - SD/ - ! ' # . $ %& ' ( DUVVURU RL REDDY ) ) & / JUDICIAL MEMBER ( ) (CHANDRA POOJARI) / ACCOUNTANT MEMBER () / CHENNAI *+ / DATED: 25 TH JANUARY, 2017. K S SUNDARAM +,-- ./-0/ / COPY TO: - 1 . / APPELLANT 3. - 1-!' / CIT(A) 5. /23- 4 / DR 2. / RESPONDENT 4. - 1 / CIT 6. 3&-5 / GF