M/s. Veerprabhu Overseas Limited [Earlier known as LMJ Overseas Ltd.], Kolkata V. ITO, Ward - 8(3), , Kolkata

ITA 2215/KOL/2018

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4811 (ITAT-KOLKATA)
• Duration Of Justice: 6 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-05-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 23-10-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHANKAR HALDER JCITSRDR
• Keywords: Reasonable cause

Judgement Text

, D , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH D KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 2215 / KOL / 20 18 ASSESSMENT YEAR :2012-13 M/S VEERPRABHU OVERSEAS LTD. ( EARLIER KNOWN AS LMJ OVERSEAS LTD ) 30, JAWAHARLAL NEHRU ROAD, 2 ND , FLOOR, KOLKATA-16 [ PAN NO.AAACL 4426 A ] V/S . INCOME TAX OFFICER, WARD-8(3), KOLKATA /APPELLANT .. / RESPONDENT /BY APPELLANT NONE /BY RESPONDENT SHRI SHANKAR HALDER, JCIT-SR-DR /DATE OF HEARING 08-05-2019 /DATE OF PRONOUNCEMENT 17-05-2019 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2012-13 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (APPEALS)-3, KOLKATAS O RDER DATED 06.08.2018 PASSED IN CASE NO.2080/CIT(A)-3/15-16/KOL, UPHOLDIN G ASSESSING OFFICERS ACTION IMPOSING PENALTY OF 1.50 LAC IN PROCEEDINGS U/S 271B OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. CASE CALLED TWICE. NONE APPEARS AT THE ASSESSEES B EHEST. IT IS ACCORDINGLY PROCEEDED EX PARTE . 2. THE ASSESSEES SOLE SUBSTANTIVE GRIEVANCE CHALLE NGES CORRECTNESS OF BOTH THE LOWER AUTHORITIES ACTION IMPOSING SEC. 271 B PENALTY ON ACCOUNT OF ITS FAILURE TO FILE ITS TAX AUDITORS REPORT DURING THE COURSE OF ASSESSMENT. THIS ITA NO.2215/KOL/2018 A.Y. 201 2-13 M/S VEERPRABHU OVERSEAS LTD. VS. ITO WD -8(3) KOL. PAGE 2 MADE THE ASSESSING OFFICER TO LEVY THE IMPUGNED PEN ALTY AMOUNTING TO 1,50 LAC AS AFFIRMED IN LOWER APPELLATE PROCEEDINGS AS U NDER:- 3.OBOSERVATIONS AND DECISION:- THE ONLY ISSUE IN THIS CASE IS THE PENALTY LEVIED O F RS.1,50,000/- BY THE ASSESSING OFFICER U/S. 271B OF THE ACT FOR NON-FURNISHING OF THE TAX AUDIT REPORT. THE APPELLANT WAS REQUIRED TO GET THE BOOKS OF ACCOUNT AUDITED U/ S. 44AB OF THE ACT, AS THE TURNOVER DURING THE PREVIOUS YEAR EXCEEDED RS.6,00, 000/-. DURING THE COURSE OF SCRUTINY PROCEEDINGS THE APPELLANT DID NOT FURNISH THE TAX AUDIT REPORT BEFORE THE ASSESSING OFFICER AND THE EXPLANATION GIVEN WAS THA T IT HAD BEEN MISPLACED. IT WAS ALSO SUBMITTED BEFORE THE ASSESSING OFFICER THAT SH RI GAURAV AGARWAL HAD DONE THE TAX AUDIT AND THE REPORT CAN BE CALLED FROM HIM. AC CORDINGLY THE ASSESSING OFFICER ISSUED NOTICE U/S.133(6) TO SHRI GAURAV AGARWAL AND ASKED FOR A COPY OF THE TAX AUDIT REPORT. HOWEVER, SHRI GAURAV AGARWAL ALSO EXPRESSED HIS INABILITY TO FURNISH THE COPY OF THE TAX AUDIT REPORT. INSPITE OF REPEATED OPPORT UNITIES GIVEN BY THE ASSESSING OFFICER THE TAX AUDIT REPORT WAS NOT FURNISHED BEFO RE THE ASSESSING OFFICER AND HENCE HE LEVIED THE PENALTY OF RS.1,50,000/- U/S. 271B FO R THE SAID DEFAULT. DURING THE COURSE OF APPELLATE PROCEEDINGS IT HAS B EEN SUBMITTED BEFORE ME THAT DURING THE RELEVANT PREVIOUS YEAR RESTRUCTURING OF THE BUSINESS GROUP TOOK PLACE, ON ACCOUNT OF FAMILY DISPUTES, AND LMJ GROUP SEPARATED FROM M/S SURRESH KUMAR JAIL GROUP. ON ACCOUNT OF THE ONGOING DISPUTE AN ARBITRA TION PROCEEDING WAS INITIATED AND SHRI KAMALESHS SOGANI WAS APPOINTED THE CUSTODIAN O F ALL THE DOCUMENTS, BOOKS OF ACCOUNT ETC. PERTAINING TO THE GROUP CONCERNS. THE DOCUMENTS WERE SEALED AND PLACED IN SECURITY AT THE PREMISES ATE 15B, HEMANT BASU SARANI, KOLKATA. FURTHER ON 06/11/2015 IT WAS DISCOVERED BY THE CUSTODIAN THAT ALL THE BOOKS OF ACCOUNT AND DOCUMENTS WERE MISSING FROM THE SAID PREMISES. A PO LICE REPORT TO THAT EFFECT WAS FILED. THE AUTHORISED REPRESENTATIVE OF THE APPELLA NT THEREFORE ARGUED BEFORE ME THAT AS THE DOCUMENTS HAD BEEN STOLEN THE TAX AUDIT REPORT CANNOT BE PRODUCED. IT IS OBSERVED THAT THE EXPLANATION GIVEN BEFORE THE ASSE SSING OFFICER WAS DIFFERENT FROM WHAT HAS BEEN SUBMITTED BEFORE ME. THE APPELLANT HA S BEEN TAKING CONTRADICTORY STANDS BEFORE DIFFERENT AUTHORITIES. HOWEVER THE AUTHORISED REPRESENTATIVE OF THE APP ON 06/08/2018 HAS FILED A COPY OF THE TAX AUDIT REPORT STATING THAT IT HAS BEEN OBTAI NED FROM A STAFF. ACCORDINGLY IT WAS SUBMITTED THAT THE PENALTY U/S.271B SHOULD BE DELET ED. I HAVE GONE THROUGH THE SUBMISSIONS OF THE APPELLAN T AND THE FINDINGS OF THE ASSESSING OFFICER. EARLIER THE CONTENTION OF THE AP PELLANT WAS THAT SINCE THE TAX AUDIT REPORT HAD GONE MISSING FROM THE CUSTODY OF THE PER SON APPOINTED BY THE ARBITRATOR THEREFORE THEY WERE UNABLE TO FURNISH THE SAME. THE STAND TAKEN WAS THAT IT HAS BEEN STOLEN FROM CUSTODY. MOREOVER, EVEN THE AUDITOR SHR I GAURAB AGARWAL EXPRDESSED HIS INABILITY TO PROVIDE A COPY OF THE SAID REPORT. HOW EVER NOW A COPY OF THE SAME HAS BEEN FURNISHED. IT IS THEREFORE OBSERVED THAT THE A RGUMENT GIVEN THAT THE TAX AUDIT REPORT HAD BEEN STOLEN IS INCORRECT. THERE IS NO PR OOF THAT THE STOLEN DOCUMENTS HAVES BEEN RECOVERED TILL DATE. HOWEVER A COPY OF T HE TAX AUDIT REPORT HAS BEEN FURNISHED BY THE APPELLANT. THAT MEANS THAT THE APP ELLANT ALL ALONG WAS IN POSSESSION OF THE TAX AUDIT REPORT AND THE SAME WAS NOT PRODUC ED BEFORE THE ASSESSING OFFICER DURING THE CURSE OF SCRUTINY PROCEEDINGS WITHOUT PR OPER AND VALID REASONS. THE ARGUMENTS AND EXPLANATION GIVEN FOR NOT PRODUCING T HE AUDIT REPORT BEFORE THE ASSESSING OFFICER IS NOW FOUND TO BE INCORRECT AND FALSE. AS THE APPELLANT WAS HAVING THE TAX AUDIT REPORT WITH THEM THE SAME SHOULD HAVE BEEN DULY PRODUCED BEFORE THE ASSESSING OFFICER FOR VERIFICATION. THE APPELLANT T HEREFORE CONSCIOUSLY ABSTAINED FROM FURNISHING THE REPORT BEFORE THE ASSESSING OFFICER AS THE EXPLANATIONS GIVEN ARE FOUND TO BE INCORRECT. ACCORDINGLY I AM OF THE CONS IDERED OPINION THAT THE APPELLANT HAS FAILED TO FURNISH THE TAX AUDIT REPORT BEFORE T HE ASSESSING OFFICER WITHOUT ANY ITA NO.2215/KOL/2018 A.Y. 201 2-13 M/S VEERPRABHU OVERSEAS LTD. VS. ITO WD -8(3) KOL. PAGE 3 REASONABLE CAUSE. PENALTY LEVIED BY THE ASSESSING O FFICER OF RS.1,50,-000/- FOR NOT FURNISHING THE TAX AUDIT REPORT U/S. 271B IS, THERE FORE, HEREBY CONFIRMED. 3. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO AS SESSEES PLEADINGS AND REVENUES ARGUMENTS AGAINST AND IN SUPPORT OF T HE IMPUGNED PENALTY. LEARNED DEPARTMENTAL REPRESENTATIVE FAILS TO DISPUT E THE FACT THAT THE ASSESSEES PLEA BEFORE THE CIT(A) EXPLAINING THE RE ASON OF NON-FILING OF ITS TAX AUDIT REPORT AS GONE UNREBUTTED ON FACTS. WE MAKE I T CLEAR THAT ASSESSEE HAD CLAIMED THAT ITS DOCUMENTS REQUIRED TO BE COMPILED IN TAX AUDIT REPORT HAD BEEN STOLEN FORMING THE REASONABLE CAUSE. WE THEREF ORE HOLD THAT THE IMPUGNED PENALTY IS NOT LIABLE TO BE SUSTAINED BECA USE OF THE SAID REASONABLE CAUSE. THE SAME IS DIRECTED TO BE DELETED. 4. THIS ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 17 /05/2019 SD/- SD/- ( %) (' %) (DR.A.L. SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP, SR.P.S (- 17 / 05 /201 9 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-M/S VEERPRABHU OVERSEAS LTD., 30, JAWAHA RLAL NEHRU ROAD, 2ND FLOOR, KOLKATA-7 00016 2. /RESPONDENT-INCOME TAX OFFICER, WARD-8(3), KOLKATA 3. 3 4 / CONCERNED CIT KOLKATA 4. 4- / CIT (A) KOLKATA 5. 7 ''3, 3, / DR, ITAT, KOLKATA 6. < / GUARD FILE. BY ORDER/ , /TRUE COPY/ 3,