SMT. HARICHANDRAN KALEESWARI, CHENNAI V. ITO, NON CORPORATE RANGE - 5 (1), CHENNAI

ITA 2215/CHNY/2019

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 5892 (ITAT-CHENNAI)
• Duration Of Justice: 6 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 30-07-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause; Set aside
• Section: 143(3); 44AB

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, D BENCH : CHENNAI , . , [BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY , JUDICIAL MEMBER ] !' ./I.T.A. NOS.2215 & 2216/CHNY/2019. #$% &$ / ASSESSMENT YEARS : 2014-2015 & 2015-2016. SMT. HARICHANDRAN KALEESWARI, NO.806/665B, T.H. ROAD, SOUNDARAPANDI NAGAR, THIRUVOTRIYUR, CHENNAI 600 019. VS. THE INCOME TAX OFFICER, NON CORPORATE RANGE 5(1) CHENNAI. [PAN ANTPK 6594K] ( / APPELLANT) ( /RESPONDENT) !' '( ) * / APPELLANT BY : SHRI. I. DINESH, ADVOCATE +,'( ) * /RESPONDENT BY : SMT. R. ANITHA, IRS, JCIT. # - ) . /DATE OF HEARING : 12-02-2020 /0&% ) . /DATE OF PRONOUNCEMENT : 13-02-2020 / O R D E R PER INTURI RAMA RAO, ACCOUNTANT MEMBER THESE ARE APPEALS FILED BY THE ASSESSEE DIRECTED AGAINST THE COMMON ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- 19, CHENNAI (HEREINAFTER CALLED AS CIT(A)) DATED 27.06.2019 FOR THE ASSESSMENT YEARS 2014-15 AND 2015-2016. ITA NOS.2215 & 2216 /2019 :- 2 -: 2. SINCE, THE IDENTICAL FACTS AND ISSUES ARE INVOLVED IN THESE APPEALS, WE PROCEED TO DISPOSE OF THE SAME VIDE THI S COMMON ORDER. 3. FOR THE SAKE OF CONVENIENCE AND CLARITY THE FACTS R ELEVANT TO THE APPEAL IN ITA NO.2215/CHNY/2019 FOR ASSESSMENT YEAR 2014-15 ARE STATED HEREIN. 4. THE ASSESSEE RAISED THE FOLLOWING GROUNDS OF APPEAL : 1. THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) CONFIRMING THE LEVY OF PENALTY U/S 271 B OF THE ACT IS ARBITRARY AND CONTRARY TO THE LAW, FACTS AND CIRCUMSTANCES OF THE CASE. 2. THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE APPRECIATED THAT THERE IS A REASONABLE AND JUSTIFIABLE CAUSE FOR NON SUBMISSION OF AUDIT REPOR T U/S. 44AB OF THE INCOME TAX ACT. 3. THE COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO CONSIDER THE SUBMISSIONS MADE BEFORE HIM FOR NONCOMPLIANCE OF SECTION 44AB BY THE APPELLANT WAS BEYOND THEIR CONTROL AND IMPOSSIBLE TO COMPLY WITHI N THE TIME STIPULATED BY THE STATUE. 4. THE COMMISSIONER OF INCOME TAX (APPEALS) WENT WRONG IN NOT CONSIDERING THE AUTHORITIES PLACED BEF ORE HIM AND WENT WRONG IN DISTINGUISHING THEM. 5. THE COMMISSIONER OF INCOME TAX (APPEALS) OUGHT TO HAVE NOTED THAT THE APPELLANT FILED AUDIT REPORT ALONG WITH THE ROL BEFORE THE ASSESSMENT COMPLETED. 6. ANY OTHER GROUND THAT MAY BE RAISED AT THE TIME OF HEARING. ITA NOS.2215 & 2216 /2019 :- 3 -: 5. THE BRIEF FACTS OF THE CASE ARE AS UNDER: THE APPELLANT IS AN INDIVIDUAL AND DEALER IN EDIB LE OIL, DHALL AND COOL DRINK. THE RETURN OF INCOME FOR THE AY 2014-15 WAS FILED BELATEDLY ON 16.03.2017. BASED ON THIS INFORMATION, THE ASSESSING OFFICER FORMED AN OPINION THAT INCOME ESCAPED ASSES SMENT AND ACCORDINGLY ISSUED NOTICE U/S.148 OF THE INCOME TA X ACT, 1961 (IN SHORT THE ACT) ON 30.03.2017. IN RESPONSE TO T HE SAID NOTICE, ASSESSEE FILED RETURN OF INCOME ON 29.06.2017 ADMI TTING INCOME OF C3,18,570/-. AGAINST THE SAID RETURN OF INCOME, T HE ASSESSMENT CAME TO BE COMPLETED AT TOTAL INCOME OF C14,37,030/ - AFTER MAKING ADDITION ON ACCOUNT OF UNACCOUNTED CASH DEPOSIT OF C90,440/- AND DISALLOWANCE OF EXPENSES OF C3,22,651/-. ADDITIONS MADE ARE NOT SUBJECT MATTER OF PRESENT APPEAL. SUBSEQUENTLY, TH E ASSESSING OFFICER ON NOTICING THAT ASSESSEE HAD DISCLOSED TURNOVER OF C9,97,79,324/- AND TAX AUDIT REPORT AS PRESCRIBED U/S.44AB OF THE ACT WAS NOT FILED WITHIN THE DUE DATE ISSUED SHOW CAUSE NOTICE DATED 29.12. 2017. IN RESPONSE, IT WAS SUBMITTED THAT TAX AUDIT REPORT WAS UPLOADED ALONGWITH RETURN OF INCOME ON 29.06.2017 AND THERE FORE PENALTY SHOULD NOT BE LEVIED. THE ASSESSING OFFICER WAS OF THE VIEW THAT ASSESSEE HAD FAILED TO DEMONSTRATE REASONABLE CAUSE AND THEREFORE PROCEEDED WITH LEVY PENALTY OF C1,50,000/- VIDE ORD ER DATED 28.06.2018. ITA NOS.2215 & 2216 /2019 :- 4 -: 6. BEING AGGRIEVED, AN APPEAL WAS PREFERRED BEFORE THE LD.CIT(A) WHO VIDE IMPUGNED ORDER CONFIRMED LEVY O F PENALTY. 7. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT(A), TH E APPELLANT IS IN APPEAL BEFORE US IN THE PRESENT APPEAL. THE LD. AUTHORISED REPRESENTATIVE SUBMITTED THAT TAX AUDIT REPORT WAS FILED BEFORE THE COMPLETION OF ASSESSMENT PROCEEDINGS ALONGWITH RE TURN OF INCOME FILED IN RESPONSE TO NOTICE ISSUED U/S.148 OF THE A CT. THEREFORE, THE ASSESSING OFFICER HAD THE BENEFIT OF TAX AUDIT REPO RT BEFORE COMPLETION OF ASSESSMENT PROCEEDINGS AND THEREFORE THE QUESTIO N OF LEVY OF PENALTY DOES NOT ARISE. HE ALSO PLACED RELIANCE ON THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF P. SENTHIL KUMAR VS. PCIT (2019) 416 ITR 0336 . 8. ON THE OTHER HAND, THE LD. SR. DEPARTMENTAL REPRESE NTATIVE PLACED RELIANCE ON THE ORDERS OF LOWER AUTHORITIES. 9 . WE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ISSUE IN THE PRESENT APPEAL RELATES TO WHETHER OR NOT LEVY OF PENALTY U/S.271B OF THE ACT IS JUSTIFIED. ADMIT TEDLY, TAX AUDIT REPORT WAS FILED ALONGWITH RETURN FILED IN RESPONSE TO SHO W CAUSE NOTICE ISSUED U/S.148 OF THE ACT WHICH MEANS THAT THE ASSE SSING OFFICER HAD THE BENEFIT OF TAX AUDIT REPORT AND NO PREJUDICE C AN SAID TO HAVE BEEN CAUSED FOR THE DEPARTMENT ON ACCOUNT OF BELATED SUB MISSION OF TAX ITA NOS.2215 & 2216 /2019 :- 5 -: AUDIT REPORT. THE RATIO DECISION OF THE HONBLE JU RISDICTIONAL HIGH COURT IN THE CASE OF P. SENTHIL KUMAR (SUPRA) IS SQUARELY APPLICABLE TO THE FACTS OF THE PRESENT CASE, WHEREIN IT WAS HELD AT PARAS 10 TO 12 AS FOLLOWS. 10. ADMITTEDLY, THE REASONS ASSIGNED BY THE ASSES SEE HAVE NOT BEEN FOUND TO BE FALSE NOR WITH ANY MALA FIDE INTEN TION, THE REASONS WERE ASSIGNED. THEREFORE, THIS COURT IS OF THE VIEW THAT THE EXPLANATION OFFERED BY THE ASSESSEE CAN BE TAKE N AS A REASONABLE CAUSE FOR HIS FAILURE TO FILE THE AUDIT REPORT WITHIN TIME. WE ARE ALSO AWARE THAT THE ASSESSMENT WAS COM PLETED UNDER SECTION 143(3) OF THE ACT ONLY ON 29.3.2015 A ND ON THAT DATE, THE AUDIT REPORT WAS VERY MUCH AVAILABLE WITH THE ASSESSING OFFICER. 11. THE HONBLE APEX COURT, IN THE CASE OF HINDUSTA N STEEL LIMITED VS. STATE OF ORISSA [REPORTED IN (1972) 83 ITR 26], CONSIDERED THE VALIDITY OF LEVY OF PENALTY UNDER TH E PROVISIONS OF THE ORISSA SALES TAX ACT, 1947. ONE OF THE QUEST IONS, WHICH WAS FRAMED FOR CONSIDERATION WAS AS TO WHETHER IMPO SITION OF PENALTY FOR FAILURE TO REGISTER AS A DEALER WAS JUS TIFIED. THE HONBLE APEX COURT POINTED OUT THAT THE LIABILITY T O PAY PENALTY DOES NOT ARISE MERELY UPON PROOF OF DEFAULT IN REGI STERING AS A DEALER, THAT AN ORDER IMPOSING PENALTY FOR FAILURE TO CARRY OUT A STATUTORY OBLIGATION IS THE RESULT OF QUASI CRIMINA L PROCEEDING AND THAT PENALTY WILL NOT ORDINARILY BE IMPOSED UNL ESS THE PARTY OBLIGED EITHER ACTED DELIBERATELY IN DEFIANCE OF LA W OR WAS GUILTY OF CONDUCT CONTUMACIOUS OR DISHONEST OR ACTED IN CO NSCIOUS DISREGARD OF ITS OBLIGATION. IT WAS FURTHER HELD TH AT WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHORI TY TO BE EXERCISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMSTANCES AND THAT EVEN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHORITY COMPETENT TO IMPOSE THE P ENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY, WHEN TH ERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FROM A BONA FIDE BELIEF THAT THE O FFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATU TE. ITA NOS.2215 & 2216 /2019 :- 6 -: 12. THOUGH THE ABOVE DECISION ARISES UNDER THE ORIS SA SALES TAX ACT, 1947, THE RATIO DECIDENDI OF THE SAID DECI SION COULD VERY WELL BE APPLIED TO THE ASSESSEES CASE. WE FIN D THAT THE NON FILING OF THE TAX AUDIT REPORT BEFORE 30.9.2012 IS A TECHNICAL BREACH AND ADMITTEDLY, THE ASSESSEE FILED THE AUDIT REPORT ALONG WITH THE RETURN OF INCOME ON 31.3.2013 AND THAT THE ASSESSMENT WAS FRAMED BY THE ASSESSING OFFICER ONLY ON 29.3.2015, ON WHICH DATE, THE AUDIT REPORT WAS VERY MUCH ON THE FILE OF THE ASSESSING OFFICER. THUS, WE ARE OF THE VIEW THAT THE EXPLANATION OFFERED BY THE ASSESSEE CAN BE ACCE PTED AS A REASONABLE CAUSE FOR HIS FAILURE TO FILE THE AUDIT REPORT WITHIN TIME AND THE CASE ON HAND IS NOT A FIT CASE FOR IMP OSING PENALTY ON THE APPELLANT. IN VIEW OF THE ABOVE FACTS AND LEGAL POSITION, WE A RE OF THE CONSIDERED OPINION THAT LEVY OF PENALTY U/S.271B OF THE ACT IS NOT WARRANTED. ACCORDINGLY, WE SET ASIDE THE ORDERS OF THE LOWER A UTHORITIES AND DIRECT THE ASSESSING OFFICER TO DELETE LEVY OF PENALTY MAD E U/S.271B OF THE ACT. THUS, THE APPEAL FILED BY THE ASSESSEE IN ITA NO.2215/CHNY/2019 FOR ASSESSMENT YEAR 2014-2015 STA NDS ALLOWED. ITA NO.2216/CHNY/2019 FOR ASSESSMENT YEAR 2015-16 10. SINCE, THE FACTS IN THE PRESENT APPEAL ARE IDENTIC AL TO THE FACTS IN ITA NO.2215/CHNY/2019, FOR ASSESSMENT YEAR 2014- 15, FOR THE REASONS MENTIONED THEREIN, WE ALLOW THE APPEAL IN THE SAME LINES INDICATED IN APPEAL ITA NO.2215/CHNY/2019 SUPRA. HE NCE, THE ABOVE CAPTIONED APPEAL FILED BY THE ASSESSEE STANDS ALLO WED. ITA NOS.2215 & 2216 /2019 :- 7 -: 11. IN THE RESULT, THE APPEALS FILED BY THE ASSESSEE I N ITA NOS. 2215 & 2216/CHNY/2019 FOR ASSESSMENT YEARS 2014-15 AND 2 015-16 ARE ALLOWED. ORDER PRONOUNCED ON 13TH DAY OF FEBRUARY, 2020, AT CHENNAI. SD/- SD/- ( . ) (DUVVURU RL REDDY) ! '# /JUDICIAL MEMBER ( ) (INTURI RAMA RAO) /ACCOUNTANT MEMBER 1 #- / CHENNAI 2# / DATED:13TH FEBRUARY, 2020. KV 3 ) +.4 5' !6 5&. / COPY TO: 1 . !' '( / APPELLANT 3. 7. (!' ) / CIT(A) 5. 5 :; +.#< / DR 2. +,'( / RESPONDENT 4. 7. / CIT 6. ;$ =- / GF