Shreenathji Realty, Vadodara V. The DCIT, Circle-1(2), Vadodara

ITA 2221/AHD/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7507 (ITAT-AHMEDABAD)
• Duration Of Justice: 1 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 02-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause; Tangible material; Ignorance of law; Set aside
• Section: 273B; 143(3); 133A; 143(2); 139(1); 271B; 44AB; 72; 27

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, AHMEDABAD BEFORE SHRI MAHAVIR PRASAD, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER 1. ./ITA NO.2221/AHD/2018 - A.Y. 2013-14 2. ./ITA NO.2222/AHD/2018 A.Y. 2013-14 1.SHREENATHJI REALTY BANSI BUNGALOWS ATLADARA, VADODARA 390 012 PAN: ABSES 8363 H 2.NILKANTH DEVELOPERS VACHNAMRUT RESIDENCY ATLADARA, VADODARA 390 012 PAN: AAIFN 0619 C / VS. 1-2. THE DY.CIT CIRCLE-1(2) BARODA 390 007 ( /APPELLANTS ) .. ( / RESPONDENT ) / APPELLANT BY : SHRI MUKUND BAKSHI, AR / RESPONDENT BY: SHRI VIDHYUT TRIVEDI, SR.DR / DATE OF HEARING 29/01/2020 / DATE OF PRONOUNCEMENT 30/01/2020 / O R D E R PER WASEEM AHMED, ACCOUNTANT MEMBER: THE CAPTIONED APPEALS HAVE BEEN FILED AT THE INSTAN CE OF THE DIFFERENT ASSESSEES AGAINST THE SEPARATE ORDERS OF THE COMMI SSIONER OF INCOME TAX (APPEALS)5, VADODARA [CIT(A) IN SHORT] VIDE APPEAL NOS.CIT(A), VADODARA- 5/10130 AND 10068/16-17 BOTH DATED 31/07/2018 ARI SING IN THE PENALTY ORDER(S) PASSED UNDER S. 271B OF THE INCOME TAX ACT , 1961(HEREINAFTER REFERRED TO AS 'THE ACT') DATED 24/05/2016 RELEVAN T TO ASSESSMENT YEAR (AY) 2013-14 RESPECTIVELY. ITA NO.2221/AHD/2018 - SHREENATHJI REALTY VS. DCIT ITA NO.2222/AHD/2018 - NILKANTH DEVELOPERS VS. DCIT ASST.YEAR - 2013- 14 - 2 - SINCE BOTH THE APPEALS RELATE TO THE SAME ISSUE INV OLVING IDENTICAL FACTS & CIRCUMSTANCES BUT TO DIFFERENT ASSESSEES, HENCE THE SAME ARE HEARD ANALOGOUSLY AND ARE BEING DISPOSED OF BY WAY OF THI S COMMON ORDER. 2. FIRST, WE TAKE UP ASSESSEES APPEAL IN ITA NO. 2 221/AHD/2018 FOR AY 2013-14 IN THE CASE OF M/S SHREENATHJI REALTY. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- 1. THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-5, VA DODARA HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ACTION OF THE LD.A.O . IN LEVYING PENALTY TO THE EXTENT OF RS.1,37,500/- U/S.271B OF THE ACT IGNORIN G THE FACTS AND CIRCUMSTANCES OF THE CASE. THE LEVY OF PENALTY OF RS.1,37,500/- IS BAD IN LAW AND IN FACTS IS PRAYED TO BE CANCELLED. 2. YOUR APPELLANT CRAVES LIBERTY TO ADD, ALTER, DELETE OR SUBSTITUTE ANY OF THE GROUNDS OF APPEAL HEREINABOVE CONTAINED. 3. THE EFFECTIVE ISSUE RAISED BY THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY FOR A SUM OF RS. 1,37,500.00 LEVIED BY THE AO U/S 271B OF THE ACT. 4. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS A PARTNERSHIP FIRM AND ENGAGED IN THE BUSINESS OF LAND DEALINGS AND RE AL ESTATE DEVELOPMENT. THERE WAS A SURVEY OPERATION CONDUCTED UNDER SECTIO N 133A OF THE ACT DATED 29-10-2012. THE ASSESSEE DURING THE SURVEY PROCEEDI NGS ADMITTED UNDISCLOSED/UNACCOUNTED INCOME OF RS. 2.03 CRORES W HICH WAS ALSO OFFERED TO TAX IN THE INCOME TAX RETURN FILED DATED 30 TH MARCH 2014 AFTER DUE DATE (31 ST OCTOBER 2013) SPECIFIED UNDER SECTION 139(1) OF THE ACT. AS SUCH, THE ASSESSEE GOT ITS ACCOUNT AUDITED UNDER SECTION 44 A B OF THE ACT FROM THE QUALIFIED CHARTERED ACCOUNTANT DATED 29 TH MARCH 2014. THE ASSESSEE DEFAULTED IN GETTING THE ACCOUNTS AUDITED WITHIN TH E TIME AS SPECIFIED UNDER ITA NO.2221/AHD/2018 - SHREENATHJI REALTY VS. DCIT ITA NO.2222/AHD/2018 - NILKANTH DEVELOPERS VS. DCIT ASST.YEAR - 2013- 14 - 3 - SECTION 44 AB OF THE ACT AND FURNISHING THE SAME TO THE INCOME TAX OFFICE WITHIN THE TIME. 4.1. ACCORDINGLY, THE ASSESSING OFFICER INITIATED THE PENALTY PROCEEDINGS FOR NOT GETTING THE ACCOUNTS AUDITED AND FURNISHING THE AUDIT REPORT WITHIN THE SPECIFIED TIME UNDER THE PROVISIONS OF SECTION 271B OF THE ACT VIDE NOTICE DATED 5 TH NOVEMBER 2015 AND 5 TH MAY 2016 BUT THERE WAS NO RESPONSE FROM THE SIDE OF THE ASSESSEE. HENCE THE AO LEVIED THE P ENALTY OF RS. 1,50,000/- UNDER THE PROVISIONS OF SECTION 271B OF THE ACT. AGGRIEVED ASSESSEE PREFERRED AN APPEAL TO THE LEARN ED CIT(A). 4.2. THE ASSESSEE BEFORE THE LEARNED CIT(A) SUBMIT TED THAT THERE WERE VARIOUS INCRIMINATING DOCUMENTS RELATING TO THE REC EIPTS WERE FOUND AND IMPOUNDED DURING THE SURVEY PROCEEDINGS CONDUCTED U NDER SECTION 133A OF THE ACT. AS A RESULT OF DISCOVERY OF INCRIMINATING DOCUMENTS DURING SURVEY, THE ASSESSEE GOT THEM ACCOUNTED IN THE BOOKS OF ACC OUNTS WHICH HAVE TAKEN CONSIDERABLE TIME. THEREFORE THE ASSESSEE COULD NOT COMPLETE THE BOOKS OF ACCOUNTS WITHIN THE TIME WHICH RESULTED DELAY IN TH E AUDIT OF THE ACCOUNTS IN THE MANNER AS SPECIFIED UNDER SECTION 44AB OF THE A CT. ACCORDINGLY THE ASSESSEE CLAIMED THAT THERE WAS REASONABLE CAUSE WH ICH PREVENTED TO GET ITS ACCOUNTS AUDITED AND FURNISHED THE SAME WITHIN THE TIME LIMIT AS SPECIFIED UNDER SECTION 44AB OF THE ACT. ACCORDINGLY THE ASSE SSEE PRAYED BEFORE THE LEARNED CIT (A) TO PROVIDE IMMUNITY FROM THE PENALT Y IMPOSED BY THE AO UNDER SECTION 44 AB OF THE ACT IN PURSUANCE TO THE PROVISIONS OF SECTION 273B OF THE ACT. ITA NO.2221/AHD/2018 - SHREENATHJI REALTY VS. DCIT ITA NO.2222/AHD/2018 - NILKANTH DEVELOPERS VS. DCIT ASST.YEAR - 2013- 14 - 4 - 4.3. HOWEVER, THE LEARNED CIT (A) DISREGARDED THE CONTENTION OF THE ASSESSEE BY OBSERVING THAT THERE WAS NO ALLEGATION OF THE ASSESSEE THAT THERE WAS DELAY IN GETTING THE IMPOUNDED DOCUMENTS FROM T HE INCOME TAX OFFICE. FURTHERMORE, THERE WAS ENOUGH TIME AVAILABLE TO THE ASSESSEE BETWEEN THE DATE OF SURVEY I.E. 29 TH OCTOBER 2012 AND LAST DATE OF FILING THE TAX AUDIT REPORT UNDER SECTION 44AB OF THE ACT. ACCORDINGLY, THE LEARNED CIT (A) CONFIRMED THE PENALTY IN PART FOR RS. 1,37,500.00 O NLY. BEING AGGRIEVED BY THE ORDER OF THE LD. CIT-A, THE ASSESSEE IS IN APPEAL BEFORE US. 5. THE LD. AR BEFORE US SUBMITTED THAT THE PURPOSE OF THE TAX AUDIT UNDER SECTION 44AB OF THE ACT WAS TO ENSURE THAT TH E INFORMATIONS FURNISHED BY THE ASSESSEE IN THE INCOME TAX RETURN ARE CORREC T SO AS TO SAVE THE TIME OF THE INCOME TAX OFFICERS IN CARRYING OUT ROUTINE VER IFICATIONS OF THE PURCHASES AND SALES SHOWN IN THE FINANCIAL STATEMENTS. IN THE PRESENT CASE, THE INCOME DISCLOSED BY THE ASSESSEE IN ITS RETURN OF INCOME W AS ACCEPTED WITHOUT ANY VARIATION IN THE ASSESSMENT FRAMED UNDER SECTION 14 3(3) OF THE ACT. THUS, THE OBJECT OF THE TAX AUDIT REPORT AS SPECIFIED IN THE CBDT CIRCULAR BEARING NO. 387 DATED 6 JULY 1984 WAS ACHIEVED. 5.1. THE LEARNED AR ALSO CLAIMED THAT THE ASSESSE ES TURNOVER FROM THE DISCLOSED SOURCES FOR THE YEAR UNDER CONSIDERATION WAS RS. 72 LAKHS ONLY WHEREAS IT WAS LIABLE TO GET ACCOUNTS AUDITED UNDER SECTION 44AB OF THE ACT, IN THE EVENT WHERE THE TURNOVER WAS IN EXCESS OF RS . 1 CRORE. ACCORDINGLY THE ASSESSEE WAS UNDER THE BONA FIDES BELIEVE THAT IT I S NOT LIABLE TO GET THE ACCOUNTS AUDITED UNDER SECTION 44AB OF THE ACT. MOR EOVER, THE ASSESSEE WAS ALSO UNDER THE BONA FIDES BELIEVE THAT THE INCOME A DMITTED DURING THE SURVEY ITA NO.2221/AHD/2018 - SHREENATHJI REALTY VS. DCIT ITA NO.2222/AHD/2018 - NILKANTH DEVELOPERS VS. DCIT ASST.YEAR - 2013- 14 - 5 - PROCEEDINGS SHALL NOT BE PART OF THE TURNOVER FOR T HE PURPOSE OF TAX AUDIT UNDER SECTION 44AB OF THE ACT. 5.2. THE LEARNED AR ALSO CLAIMED THAT THE BOOKS OF ACCOUNTS WERE AUDITED AND THE TAX AUDIT REPORT WAS FURNISHED MUCH BEFORE THE COMMENCEMENT OF SCRUTINY ASSESSMENT UNDER SECTION 143(3) OF THE ACT . AS SUCH THE NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED UPON THE ASSESSEE ON 3 RD SEPTEMBER 2014, MUCH AFTER COMPLYING THE PROVISIONS OF SECTION 44AB OF THE ACT. AS SUCH THERE WAS NO LOSS TO THE REVENUE FOR N OT GETTING THE ACCOUNTS AUDITED AND CORRESPONDINGLY FURNISHING THE TAX AUDI T REPORT WITHIN THE TIME SPECIFIED UNDER THE PROVISIONS OF LAW IN THE GIVEN FACTS AND CIRCUMSTANCES. 5.3. IN VIEW OF THE ABOVE, THE LEARNED AR FOR THE ASSESSEE PRAYED TO PROVIDE THE IMMUNITY FROM THE PENALTY FOR THE DEFAULT COMMI TTED UNDER SECTION 44AB OF THE ACT, IN PURSUANCE TO THE PROVISIONS OF SECTI ON 273B OF THE ACT. 6. ON THE OTHER HAND, THE LD. DR BEFORE US VEHEM ENTLY SUPPORTED THE ORDER OF THE AUTHORITIES BELOW. 7. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUS ED THE MATERIALS AVAILABLE ON RECORD. THE ISSUE IN THE INSTANT CASE IS THAT TH E ASSESSEE DID NOT GET THE BOOKS OF ACCOUNT AUDITED WITHIN THE TIME AS PRESCRI BED UNDER THE PROVISION OF SECTION 44AB OF THE ACT. 7.1. THE AO LEVIED THE PENALTY UNDER SECTION 271B OF THE ACT FOR NOT FURNISHING THE AUDIT REPORT IN FORM 3CD WITHIN THE SPECIFIED TIME. UNDISPUTEDLY, THE ASSESSEE COULD NOT GET THE ACCOUN TS AUDITED UNDER SECTION 44 AB OF THE ACT WITHIN THE SPECIFIED TIME. HOWEVER , THE ASSESSEE HAS BEEN ITA NO.2221/AHD/2018 - SHREENATHJI REALTY VS. DCIT ITA NO.2222/AHD/2018 - NILKANTH DEVELOPERS VS. DCIT ASST.YEAR - 2013- 14 - 6 - PROVIDED IMMUNITY FROM SUCH PENALTY UNDER THE PROVI SIONS OF SECTION 273B OF THE ACT IF IT PROVES THAT THERE WAS THE REASONABLE CAUSE FOR NON-COMPLIANCE OF GETTING THE BOOKS OF ACCOUNTS AUDITED. THUS, THE ON US LIES ON THE ASSESSEE TO PROVE THAT THERE WAS THE REASONABLE CAUSE WHICH PRE VENTED IT TO GET THE ACCOUNTS AUDITED. 7.2. THE EXPRESSION 'REASONABLE CAUSE' HAS NOT BE EN DEFINED IN THE ACT AND IT HAS, THEREFORE, TO BE UNDERSTOOD IN ITS NATURAL SENSE. WHETHER A PARTICULAR FACT OR CIRCUMSTANCE IS A REASONABLE CAUSE OR NOT W ILL DEPEND ON THE FACTS OF EACH CASE. IT IS PRIMARILY A QUESTION OF FACT WHICH HAS TO BE DECIDED, KEEPING IN VIEW THE FACTS AND CIRCUMSTANCES OF EACH CASE. W HERE A PARTICULAR FACT OR CIRCUMSTANCE IS CAPABLE OF TWO INTERPRETATIONS, THE INTERPRETATION FAVOURABLE TO THE ASSESSEE SHOULD BE ADOPTED. IT IS THE DUTY O F THE AUTHORITY CONCERNED TO TAKE A REASONABLE VIEW AND NOT TO REACH A CONCLU SION ARBITRARILY OR CAPRICIOUSLY. IN ADDL. CIT V. MOHAMMED & SONS [1985] 154 ITR 220, THE RAJASTHAN HIGH COURT SAID: 'BEFORE A CAUSE CAN BE S AID TO BE REASONABLE OR NOT, IT MUST BE FOUND ON A FACT THAT A PARTICULAR C AUSE OPERATED UPON THE MIND OF THE ASSESSEE WHICH PREVENTED HIM FROM FILIN G THE RETURN IN TIME. THE ONUS IS ON THE ASSESSEE TO SHOW THAT HE WAS PREVENT ED BY SUFFICIENT CAUSE FROM COMPLYING WITH THE STATUTORY REQUIREMENT OF FI LING RETURN IN TIME AND IT IS FOR THE AUTHORITY CONCERNED TO BE SATISFIED THAT TH E CAUSE SHOWN IS A REASONABLE CAUSE'. IN THIS DECISION, THE COURT ALSO HELD THAT 'SUFFICIENT CAUSE' OR 'REASONABLE CAUSE' CANNOT VIRTUALLY BE THE SAME SHADE OF MEANING AND THAT THERE IS NO SUBSTANTIAL DIFFERENCE BETWEEN THE TWO EXPRESSIONS. 7.3. NOW WE APPLY THE AFORESAID PRINCIPLES IN TH E PRESENT FACTS OF THE CASE WHETHER THERE WAS SUFFICIENT CAUSE FOR THE NON-COMP LIANCE OF THE STATUTORY PROVISION AS PROVIDED UNDER SECTION 44AB READ WITH SECTION 271B OF THE ACT. ITA NO.2221/AHD/2018 - SHREENATHJI REALTY VS. DCIT ITA NO.2222/AHD/2018 - NILKANTH DEVELOPERS VS. DCIT ASST.YEAR - 2013- 14 - 7 - IN THIS REGARD WE NOTE THAT THE ASSESSEE HAS GIVEN TWO CAUSES WHICH PREVENTED IT FROM THE COMPLIANCE OF THE PROVISIONS OF SECTION 44 AB OF THE ACT. 7.4. FIRSTLY, THERE WAS NOT SUFFICIENT TIME AVAI LABLE TO IT AS LOT OF DOCUMENTS WHICH ARE INCRIMINATING IN NATURE WERE FOUND DURING THE SURVEY PROCEEDINGS. ACCORDINGLY, THE ASSESSEE CLAIMED TO HAVE TAKEN A L OT OF TIME FOR GETTING THE ACCOUNTS AUDITED. REGARDING THIS, WE FIND THAT THE LEARNED AR AT TIME OF HEARING HAS NOT SUBSTANTIATED THE ARGUMENTS BASED O N ANY TANGIBLE MATERIALS. THEREFORE, WE ARE NOT IMPRESSED WITH THE ARGUMENT OF THE LEARNED AR FOR THE ASSESSEE. IT IS BECAUSE OF THE FACT THAT THE ASSESSEE WAS HAVING SUFFICIENT TIME IN HAND AFTER DATE OF THE SURVEY I. E. 29 TH OCTOBER 2012 TILL THE DATE OF FILING THE RETURN OF INCOME I.E. 31 ST OCTOBER 2013. HENCE, WE REJECT THE 1 ST CONTENTION OF THE LEARNED AR IN THE PRESENT FACTS AND CIRCUMSTANCES. 7.5. THE 2 ND FOLD OF CONTENTION OF THE LEARNED AR IS THAT THE A SSESSEE WAS NOT AWARE ABOUT FACT THAT IT WAS UNDER THE OBLIGATI ON TO TREAT THE INCOME DISCLOSED DURING THE SURVEY PROCEEDINGS AS PART OF THE TURNOVER. AGAIN THE LEARNED AR FOR THE ASSESSEE, FAILED TO SUBSTANTIATE HIS CONTENTION BASED ON THE DOCUMENTARY EVIDENCE. JUST IGNORANCE OF THE PRO VISIONS OF LAW, THE ASSESSEE CANNOT TAKE THE BENEFIT OF NON-COMPLIANCE OF THE PROVISIONS AS SPECIFIED UNDER THE ACT. IN THIS REGARD WE DRAW SUP PORT AND GUIDANCE FROM THE JUDGMENT OF MADRAS HIGH COURT IN THE CASE OF VI SHWANATHAN SILK CENTRE VS. CIT REPORTED IN 203 ITR 131 WHEREIN IT WAS HELD THAT IGNORANCE OF LAW CANNOT BE OF SUFFICIENT REASON. HENCE, WE REJECT TH E 2 ND FOLD OF CONTENTION RAISED BY THE ASSESSEE. ITA NO.2221/AHD/2018 - SHREENATHJI REALTY VS. DCIT ITA NO.2222/AHD/2018 - NILKANTH DEVELOPERS VS. DCIT ASST.YEAR - 2013- 14 - 8 - 7.6. HOWEVER, NEVERTHELESS IT IS IMPORTANT TO NO TE THAT THERE WAS NO INFIRMITY IN SUCH TAX AUDIT REPORT AS OBSERVED BY T HE AO. AS SUCH THE INCOME DECLARED BY THE ASSESSEE IN ITS INCOME TAX RETURN H AS BEEN ACCEPTED WITHOUT POINTING ANY VARIATION. MOREOVER THE PURPOSE OF TAX AUDIT WAS TO ENSURE THAT THE INFORMATION FURNISHED BY THE ASSESSEE IN THE IN COME TAX RETURN ARE CORRECT SO AS TO SAVE THE TIME OF THE INCOME TAX OF FICER IS IN CARRYING OUT ROUTINE VERIFICATIONS OF THE PURCHASES AND SALES AN D OTHER DETAILS SHOWN IN THE FINANCIAL STATEMENTS. THUS IT IS TRANSPIRED THA T THERE WAS THE SUBSTANTIAL COMPLIANCE ON THE PART OF THE ASSESSEE IN GETTING T HE ACCOUNTS AUDITED AND SUBSEQUENTLY FURNISHING THE TAX AUDIT REPORT WHICH WAS ACCEPTED BY THE REVENUE WITHOUT POINTING OUT ANY DEFECT. 7.7. IN HOLDING SO, WE DRAW SUPPORT AND GUIDANCE FROM THE ORDER OF AMRITSAR TRIBUNAL IN THE CASE OF ITO VERSUS BINDRA BAN BANSI LAL REPORTED IN 78 ITD 228 WHEREIN IT WAS HELD AS UNDER: THERE WAS NO DIFFERENCE BETWEEN THE RETURNED INCOM E AND THE FINALLY ASSESSED INCOME. ADMITTEDLY, THERE WAS NO LOSS OF REVENUE TO THE GOVERNMENT. UNDER SECTION 271B THE ASSESSING OFFICER IS VESTED WITH DISCRETIO N EITHER TO IMPOSE OR NOT TO IMPOSE PENALTY DEPENDING UPON THE FACTS AND THE CIR CUMSTANCES OF THE CASE. NO DOUBT, DISCRETION SHOULD BE EXERCISED JUDICIALLY AN D NOT ARBITRARILY. IT IS WELL SETTLED LAW THAT WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF LAW, THE ENDS OF JUSTICE REQUIRE THAT DISCRETION SHOULD NOT BE EX ERCISED IN FAVOUR OF PUNISHING A MINOR DEFAULT. TAKING INTO CONSIDERATION THE RELEVA NT FACTS OF THE CASE, THE ASSESSING OFFICER SHOULD NOT HAVE IMPOSED PENALTY UNDER SECTI ON 271B. 7.8. WE ALSO NOTE THAT THE DELAY IN GETTING THE BOOKS OF ACCOUNTS AUDITED CANNOT BE CONSIDERED AS FAILURE ON THE PART OF THE ASSESSEE AS ENVISAGED UNDER THE PROVISIONS OF SECTION 271B OF THE ACT. TH US THE DELAY IN GETTING THE ACCOUNTS AUDITED CANNOT ATTRACT THE PENALTY PROVISI ONS AS SPECIFIED UNDER SECTION 271B OF THE ACT. IN THIS REGARD WE FIND SUP PORT AND GUIDANCE FROM THE ITA NO.2221/AHD/2018 - SHREENATHJI REALTY VS. DCIT ITA NO.2222/AHD/2018 - NILKANTH DEVELOPERS VS. DCIT ASST.YEAR - 2013- 14 - 9 - ORDER OF THIS TRIBUNAL IN THE CASE OF ITO VERSUS SA PHIRE TRADERS PVT. LTD. REPORTED IN 66 TTJ 180 WHEREIN IT WAS HELD AS UNDER : WHEREVER THE LEGISLATURE HAS SOUGHT TO PENALISE A DEFAULT RELATING TO DELAY IN COMPLYING WITH A STATUTORY PROVISION, THE QUANTUM O F PENALTY IS INVARIABLY LINKED TO THE PERIOD OF DELAY SUCH AS THE DAYS OR MONTHS INVO LVED IN THE DELAY. ON THE OTHER HAND, WHEN THE DEFAULT RELATES TO FAILURE TO COMP LY WITH A STATUTORY PROVISION, THE QUANTUM OF PENALTY IS AT A SPECIFIED AMOUNT IN ABSO LUTE TERMS OR AS A PERCENTAGE OF THE TAX INVOLVED OR TOTAL INCOME ASSESSED TO TURNOV ER OR AN AMOUNT RELATING TO A TRANSACTION WHICH GIVES RISE TO SUCH DEFAULT. BY THE SAME ANALOGY, AS IN THE CASE OF SECTION 271( 1)(A ), 271(1)(B) AND 271(1)(C), IT WAS REASONABLE TO CONCLUDE THAT UNDER SECTION 27 1B, THE LEGISLATURE PURPORTED TO PUNISH A FAILURE RATHER THAN A DELAY IN COMPLYI NG WITH THE STATUTORY PROVISIONS. IF A DELAY IS TO BE VISITED WITH PENALTY UNDER SECTION 2 71B, IT WOULD MEAN THAT THE PENALTY AMOUNT WOULD BE THE SAME IRRESPECTIVE OF TH E PERIOD OF DELAY. IN OTHER WORDS, DELAY OF EVEN ONE DAY WILL INVITE THE SAME C ONSEQUENCE AS DELAY OF ONE MONTH OR ONE YEAR. OBVIOUSLY SUCH AN INTERPRETATION WAS NOT WARRANTED WHILE APPLYING THE PENAL PROVISIONS. IN THIS VIEW OF THE MATTER ALSO, WHAT IS SOUGHT TO BE PENALISED UNDER SECTION 271B WAS NOT DELAY BUT TH E ABSOLUTE FAILURE IN GETTING THE ACCOUNTS AUDITED OR TO OBTAIN THE REPORT OF SUCH AU DIT OR TO FURNISH SUCH REPORT. IN THE PRESENT CASE, THE ASSESSEE DID FILE THE AUDIT R EPORT ALONG WITH THE RETURN, THOUGH THE RETURN WAS LATE BY A SHORT PERIOD OF 15 DAYS. H ENCE, IN VIEW OF THE LEGAL POSITION, PENALTY WAS NOT EXIGIBLE UNDER SECTION 271B. 7.9. THEREFORE, WE ARE OF THE VIEW THAT THE ASSE SSEE CANNOT BE VISITED TO THE PENALTY ON ACCOUNT OF DELAY IN GETTING THE ACCO UNTS AUDITED AND FURNISHING THE TAX AUDIT REPORT IN FORM 3CD UNDER T HE PROVISIONS OF SECTION 44 AB OF THE ACT. WITH THE ABOVE OBSERVATIONS, THE ORD ERS OF LOWER AUTHORITIES ARE SET ASIDE AND THE PENALTY LEVIED U/S 271B IS DE LETED. 8. IN THE RESULT, THE APPEAL OF THE TAXPAYER STAN DS ALLOWED. COMING TO ASSESSEES APPEAL IN ITA NO.2222/AHD/2018 FOR AY 2013-14 IN THE CASE OF NILKANTH DEVELOPERS. ITA NO.2221/AHD/2018 - SHREENATHJI REALTY VS. DCIT ITA NO.2222/AHD/2018 - NILKANTH DEVELOPERS VS. DCIT ASST.YEAR - 2013- 14 - 10 - 9. BOTH THE SIDES CONSENTED THAT IDENTICAL ISSUE IS INVOLVED IN THIS APPEAL AS WELL. THUS, FOR PARITY OF REASONS NOTED ABOVE, OUR VIEW IN ITA NO. 2221/AHD/2018 IN THE CASE OF SHREENATHJI REALTY FOR AY 2013-14 (SUPRA) SHALL APPLY MUTATIS MUTANDIS TO THIS ASSESSEES APPEAL. AS A RESULT, THE APPEAL OF THE ASSESSEE IN ITA NO.2222/AHD/2018 IN THE CASE OF NILKANTH DEVELOPERS FOR AY 2013-14 IS ALLOWED . 10. IN THE COMBINED RESULT, BOTH THE APPEALS OF THE ASSESSEES ARE ALLOWED. THIS ORDER PRONOUNCED IN OPEN COURT ON 30/01/2020 SD/- SD/- (MAHAVIR PRASAD) (WASEEM AHMED) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD; DATED 30/01/2020 . . , . . . / T.C. NAIR, SR. PS ! / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. !'!#$ % / CONCERNED CIT 4. % ( ) / THE CIT(A)-5, VADODARA 5. &'( #$ , #$ , ' / DR, ITAT, AHMEDABAD 6. (+, / GUARD FILE. / BY ORDER, & //TRUE COPY// / (DY./ASSTT.REGISTRAR) , / ITAT, AHMEDABAD