SUJATA TRADING P.LTD, MUMBAI V. ITO 8(3)(2), MUMBAI

ITA 2632/MUM/2013

• Counselvise Citation: 263219914 RSA 2013
• Duration Of Justice: 1 year(s) 3 month(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-07-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 05-04-2013
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRAKASH L PADHADE
• Assessee Lawyers: M B AGARWAL
• Keywords: Depreciation

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE HONBLE S/SHRI H.L. KARWA, PRESIDENT AND B. R.BASKARAN (AM) . . , . . , ./I.T.A. NO.2632/MUM/2013 ( / ASSESSMENT YEAR :2009-10 ) SUJATA TRADING PRIVATE LIMITED, UNIT NO.2, A TO Z INDUSTRIAL ESTATE, GANPATRAO KADAM MARG, LOWER PAREL (W), MUMBAI-400013 / VS. INCOME TAX OFFICER 8(3)(2), AAYAKAR BHAVAN, ROOM NO.260-C, M K ROAD, MUMBAI-400020 ( / APPELLANT) .. ( !' / RESPONDENT) ./ #$ ./PAN/GIR NO. : AACCS22764 % / APPELLANT BY : SHRI M B AG A RWAL !' & % /RESPONDENT BY : SHRI PRAKASH L PADHADE ' & ( ) / DATE OF HEARING : 9 .7.2014 *+ & ( ) /DATE OF PRONOUNCEMENT : 9 . 7.2014 / O R D E R PER B.R.BASKARAN, ACCOUNTANT MEMBER: THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 23.10.2012 PASSED BY LD CIT(A)-18, MUMBAI AND IT RE LATES TO THE ASSESSMENT YEAR 2009-10. 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LD CIT(A) IN CONFIRMING THE PENALTY OF RS.1.00 LAKH LEVIED U/S 271B OF THE ACT. I.T.A. NO.2632/MUM/2013 2 3. THE FACTS RELATING TO THE ISSUE CITED ABOVE A RE STATED IN BRIEF. THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME THROUGH E-FILING PROCESS FOR THE YEAR UNDER CONSIDERATION ON 28-09-2009. THERE IS NO DIS PUTE THAT THE TURNOVER OF THE ASSESSEE COMPANY HAS EXCEEDED THE THRESH HOLD LIMIT PRESCRIBED U/S 44AB OF THE ACT AND HENCE THE ASSESSEE WAS REQUIRED TO GET ITS ACCOUNT AUDITED AS PER THE PROVISIONS OF SEC. 44AB OF THE ACT. IN THE RETURN OF INCOME FILED THROUGH E FILING PROCESS, THE ASSESSEE IS REQUIRED TO ANSWER FOLLOWI NG QUESTION:- ARE YOU LIABLE FOR AUDIT UNDER SECTION 44AB IF YE S FURNISH FOLLOWING INFORMATION:- A. NAME OF THE AUDITOR SIGNING THE TAX AUDIT. B. MEMBERSHIP NO. C. NAME OF THE AUDITOR D. PERMANENT ACCOUNT NUMBER (PAN) OF THE PROPRIETORSHI P/ E. DATE OF AUDIT REPORT. THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAS ANSWERED THE ABOVE SAID QUESTION AS NO AND CONSEQUENTLY IT DID NOT FURNIS H THE DETAILS RELATING TO THE AUDITOR. HENCE THE AO TOOK THE VIEW THAT THE ASSES SEE DID NOT GET ITS ACCOUNTS AUDITED U/S 44AB OF THE ACT AND ACCORDINGLY HE INIT IATED PENALTY PROCEEDINGS U/S 271B OF THE ACT. IN RESPONSE THERETO, THE ASSESSEE COMPANY SUBMITTED THAT IT HAS GOT THE AUDIT REPORT U/S 44AB OF THE ACT ON 01. 09.2009 AND THE BY INADVERTENT MISTAKE, THE ANSWER WAS WRONGLY MARKET AS NO. IT WAS FURTHER SUBMITTED THAT THE DETAILS REQUIRED TO BE GIVEN IN TAX AUDIT REPORT ARE ALSO CONTAINED IN THE E-RETURN AND THE ASSESSEE HAS DU LY FURNISHED ALL THOSE DETAILS. THE ASSESSEE ALSO FURNISHED HARD COPY OF TAX AUDIT REPORT ALONG WITH ITS REPLY. ACCORDINGLY THE ASSESSEE COMPANY SUBMITTED THAT IT WAS ONLY A TYPOGRAPHICAL ERROR AND THERE WAS NO MALAFIDE INTENTION. ACCORDI NGLY IT WAS PRAYED THAT THE PENALTY PROCEEDINGS MAY BE DROPPED. THE AO WAS NO T CONVINCED WITH THE I.T.A. NO.2632/MUM/2013 3 ABOVE SAID EXPLANATIONS. SINCE THE ASSESSEE DID NO T FURNISH THE DETAILS OF THE AUDITOR IN THE E RETURN, THE AO HELD THAT THE ASSES SEE HAS FAILED TO GET THE ACCOUNTS AUDITED U/S 44AB OF THE ACT BEFORE FILING RETURN OF INCOME. ACCORDINGLY HE LEVIED A PENALTY OF RS.1.00 LAKH U/S 271B OF THE ACT. THE LD CIT(A) ALSO CONFIRMED THE PENALTY AND HENCE THE ASSESSEE HAS FI LED THIS APPEAL BEFORE US. 4. SHRI M.B. AGARWAL, CHARTERED ACCOUNTANT APPEARE D BEFORE US ON BEHALF OF THE ASSESSEE. HE SUBMITTED THAT HE HAS CONDUCTED T HE STATUTORY AUDIT OF THE ASSESSEE COMPANY UNDER THE COMPANIES ACT AND HAS AL SO GIVEN THE TAX AUDIT REPORT U/S 44AB OF THE ACT. HE SUBMITTED BOTH THE STATUTORY AUDIT REPORT AND TAX AUDIT REPORT WAS GIVEN ON THE VERY SAME DATE, VIZ., 01-09-2009. HE FURTHER SUBMITTED THAT THE ASSESSEE COMPANY HAS FILED ITS R ETURN OF INCOME THROUGH E FILING PROCEDURE. HE SUBMITTED THAT, AS PER INSTR UCTIONS GIVEN FOR E FILING, THE ASSESSEE COMPANY IS NOT REQUIRED TO ATTACH ANY DOCU MENT ALONG WITH E RETURN AND HENCE THE ASSESSEE WAS NOT IN A POSITION TO FUR NISH THE TAX AUDIT REPORT ALONG WITH THE RETURN OF INCOME. HE FURTHER SUBMIT TED THAT THE DETAILS THAT ARE GIVEN IN THE TAX AUDIT REPORT ARE REQUIRED TO BE GI VEN IN PART A-O1 OF THE E- RETURN. INVITING OUR ATTENTION TO THE COPY OF E-RE TURN, THE LD COUNSEL SUBMITTED THAT THE ASSESSEE HAS FURNISHED ALL THOSE DETAILS I N THE E RETURN, SOME OF WHICH ARE QUANTITATIVE DETAILS, DEPRECIATION DETAILS, AM OUNT TO BE DISALLOWED U/S 40 ETC. THE LD A.R SUBMITTED THESE FACTS PROVE THAT T HE ASSESSEE HAS OBTAINED TAX AUDIT REPORT BEFORE THE DUE DATE AND ALSO BEFORE FI LING RETURN OF INCOME. HE SUBMITTED THAT THE E RETURN WAS FILLED UP AND UPLOA DED BY A CLERICAL STAFF AND HE HAS INADVERTENTLY FILLED UP THE RELEVANT COLUMN WIT H THE ANSWER NO. THE LD A.R FURTHER SUBMITTED THAT HE, IN HIS CAPACITY OF T HE AUDITOR, HAS GIVEN AN I.T.A. NO.2632/MUM/2013 4 AFFIDAVIT TO THE EFFECT THAT HE HAS GIVEN THE TAX A UDIT REPORT ON 01-09-2009. ACCORDINGLY HE SUBMITTED THAT THE IMPUGNED PENALTY SHOULD NOT BE SUSTAINED, SINCE THE LAPSE OCCURRED DUE TO THE INADVERTENT MIS TAKE COMMITTED BY A CLERICAL STAFF. 5. ON THE CONTRARY, THE LD D.R SUBMITTED THAT THE ASSESSEE, BESIDES ANSWERING THE RELEVANT QUESTION NEGATIVELY, HAS ALS O FAILED TO FURNISH THE DETAILS OF THE AUDITOR. HENCE, THE EXPLANATIONS GIVEN BY T HE ASSESSEE IS HARD TO BELIEVE AND ACCORDINGLY PRAYED THAT THE PENALTY SHOULD BE S USTAINED. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND CARE FULLY PERUSED THE RECORD. ACCORDING TO THE ASSESSEE, IT HAS OBTAINED THE TAX AUDIT REPORT AS REQUIRED U/S 44AB OF THE ACT BEFORE THE DUE DATE FILING RETURN O F INCOME AND IN THE E-RETURN, INADVERTENTLY WRONG INFORMATION WAS GIVEN. HOWEVER , THE TAX AUTHORITIES HAVE REJECTED THE SAID EXPLANATION ON THE REASONING THAT THE ASSESSEE DID NOT FURNISH THE DETAILS OF AUDITOR IN THE E RETURN. THE ASSESS EE IS A PRIVATE LIMITED COMPANY AND HENCE ITS ACCOUNTS ARE REQUIRED TO BE AUDITED U NDER THE COMPANIES ACT. WE NOTICE THAT THE AUDIT UNDER THE COMPANIES ACT WAS C ONDUCTED BY M/S M.B. AGARWAL & CO., CHARTERED ACCOUNTANTS AND THE AUDIT REPORT HAS BEEN FURNISHED ON 01-09-2009. FROM THE PAPER BOOK, WE NOTICE THAT THE TAX AUDIT REPORT UNDER SEC. 44AB OF THE ACT HAS ALSO BEEN GIVEN BY THE ABO VE SAID AUDITOR. THE AUDITOR WHO CONDUCTED THE AUDIT BOTH UNDER THE COMPANIES AC T AND UNDER THE INCOME TAX ACT HAS FURNISHED AN AFFIDAVIT, WHEREIN HE HAS STATED THAT HE HAS SIGNED THE TAX AUDIT REPORT IN FORM 3CA AND FORM 3CD U/S 44AB OF THE ACT ON 01-09-2009, I.E., BEFORE THE DUE DATE FOR FILING OF RETURN OF I NCOME. I.T.A. NO.2632/MUM/2013 5 7. FROM THE PERUSAL OF THE PROVISIONS OF SEC. 44AB OF THE ACT AND THE RELEVANT RULES, IT MAY BE NOTICED THE CORPORATE ASS ESSEES HAVE TO FURNISH TAX AUDIT REPORT IN FORM 3CA AND FORM NO.3CD. THE NON- CORPORATE ASSESSEES HAVE TO FURNISH THE TAX AUDIT REPORT IN FORM 3CB AND FOR M 3CD. A PERUSAL OF FORM NO.3CA WOULD SHOW THAT IT REQUIRES THE TAX AUDITOR ONLY TO FURNISH THE DETAILS OF AUDIT CONDUCTED UNDER THE COMPANIES ACT, I.E., THE TAX AUDITOR HAS TO MENTION AS TO WHO CONDUCTED THE AUDIT UNDER THE COMPANIES ACT AND HE HAS TO ATTACH COPIES OF (A) AUDIT REPORT GIVEN UNDER THAT ACT, (B) AUDITED PROFIT AND LOSS ACCOUNT, (C) AUDITED BALANCE SHEET AND (D) OTHER DOCUMENTS DECLARED BY THE COMPANIES ACT T O BE PART OF, OR ANNEXED TO, THE PROFIT AND LOSS ACCOUNT AND BALANCE SHEET. IN ADDITION TO THE ABOVE HE HAS TO COMMENT ABOUT TH E STATEMENT OF PARTICULARS REQUIRED TO BE FURNISHED U/S 44AB OF THE ACT IN FOR M 3CD. 8. THUS, IN EFFECT, THE TAX AUDITOR HAS TO FURNI SH THE COPIES OF STATEMENTS AUDITED UNDER THE COMPANIES ACT AND FURTHER HE HAS TO CERTIFY FORM NO.3CD ONLY. THUS, IN EFFECT, WHAT IS REQUIRED TO BE CERT IFIED WHILE CONDUCTING TAX AUDIT U/S 44AB OF THE ACT IS ONLY THE STATEMENT OF PARTIC ULARS TO BE GIVEN IN FORM 3CD. NOW THE QUESTION THAT ARISES IS WHETHER THE STATEME NT OF THE ASSESSEE THAT IT HAS OBTAINED THE TAX AUDIT REPORT PRIOR TO FILING OF RE TURN IS CORRECT OR NOT? 9. WE HAVE ALREADY NOTICED THAT THE ASSESSEE HA S FILED THE RETURN OF INCOME UNDER E FILING PROCEDURE. PART A-O1 OF THE RETUR N OF INCOME REQUIRES THE ASSESSEES WHO ARE LIABLE FOR AUDIT UNDER SECTION 44 AB OF THE ACT TO FURNISH CERTAIN INFORMATION. THE SAME IS OPTIONAL FOR THE ASSESSEES WHO ARE NOT LIABLE FOR AUDIT UNDER SEC. 44AB OF THE ACT. THE INFORMA TION TO BE GIVEN IN PART A-O1 I.T.A. NO.2632/MUM/2013 6 CONTAINS THE DETAILS TO BE FURNISHED IN FORM NO.3CD . IT IS SEEN FROM THE COPY OF E-RETURN FILED BY THE ASSESSEE THAT THE ASSESSEE HA S DULY FURNISHED ALL THE DETAILS UNDER PART A-O1 OF THE RETURN OF INCOME, MEANING THEREBY, THERE APPEARS TO BE SOME TRUTH IN THE SUBMISSION OF THE ASSESSEE THAT I T HAS OBTAINED THE TAX AUDIT REPORT BEFORE THE DUE DATE FOR FILING RETURN OF INC OME. OUR VIEW IS FURTHER FORTIFIED WITH THE FACT THAT THE AUDIT UNDER THE CO MPANIES ACT AND UNDER SEC. 44AB OF THE ACT WAS CONDUCTED BY THE VERY SAME AUDI TOR AND HE HAS CONFIRMED THE SAID FACT BY FILING AN AFFIDAVIT BEFORE US. HE NCE, ON A HOLISTIC CONSIDERATION OF THE FACTS SURROUNDING THE ISSUE, WE ARE OF THE VIEW THAT THE ASSESSEE COULD HAVE OBTAINED THE AUDIT REPORT U/S 44AB OF THE ACT BEFOR E FILING THE RETURN OF INCOME AND IT HAS INADVERTENTLY FILLED THE RELEVANT COLUMN WRONGLY AS NO. SINCE THE ASSESSEE COULD HAVE OBTAINED THE TAX AUDIT REPORT B EFORE THE DUE DATE FOR FILING RETURN OF INCOME, IN OUR VIEW, THERE IS NO JUSTIFIC ATION FOR LEVYING PENALTY U/S 271B OF THE ACT. ACCORDINGLY, WE SET ASIDE THE ORD ER OF LD CIT(A) AND DIRECT THE AO TO DELETE THE PENALTY LEVIED IN THE HANDS OF THE ASSESSEE U/S 271B OF THE ACT. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSE SSEE IS DISMISSED. THE ABOVE ORDER WAS PRONOUNCED IN THE OPEN COURT ON 9TH JULY, 2014 . *+ ' , -. / 0 9TH JULY, 2014 + & 2 3 SD SD ( . . / H.L. KARWA) ( . . , / B.R. BASKARAN ) / PRESIDENT / ACCOUNTANT MEMBER - ' MUMBAI: 9TH JULY,2014. . . ./ SRL , SR. PS I.T.A. NO.2632/MUM/2013 7 ! ' / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. !' / THE RESPONDENT. 3. ' 5( ( ) / THE CIT(A)- CONCERNED 4. ' 5( / CIT CONCERNED 5. 67 2 !(8 , ) 8 , - ' / DR, ITAT, MUMBAI CONCERNED 6. 2 9 : / GUARD FILE. ; ' / BY ORDER, TRUE COPY < # (ASSTT. REGISTRAR) ) 8 , - ' /ITAT, MUMBAI