VINOD KUMAR GUPTA, MUMBAI V. ITO 12(3)(2), MUMBAI

ITA 2738/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7837 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-02-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 25-01-2010
• Assessment Year: 2001-2002
• Appeal Filed On: 29-04-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S B MOREY
• Keywords: Reasonable cause
• Section: 271B; 44AB

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL F BENCH, MUMBAI. BEFORE SHRI R.V.EASWAR, SR.VP AND SHRI RAJENDRA SINGH, AM I.T.A. NO.2738/MUM/2009 (ASSESSMENT YEAR : 2001-02) SHRI VINOD KUMAR GUPTA 31/32, INDU CHAMBER, 349153 SAMUEL STREET, VADGADO, MUMBAI-400 003. PAN:AAIPG6320M VS. THE INCOME TAX OFFICER- 12(3)(2), MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : MS. USHA DALAL RESPONDENT BY : MR. S.B.MOREY O R D E R PER R.V.EASWAR, SENIOR VICE PRESIDENT: THIS APPEAL BY THE ASSESSEE RELATES TO THE ASSESSMENT YEAR 2001-02 AND IS DIRECTED AGAINST THE PENALTY OF RS. 52,092/- LEVIED UNDER SE CTION 271B OF THE INCOME TAX ACT. 2. THE ASSESSEE UNDISPUTEDLY WAS LIABLE TO GET HIS ACCOUNTS AUDITED UNDER SECTION 44AB OF THE ACT, SINCE HIS TU RNOVER EXCEEDED THE LIMIT PRESCRIBED IN THAT SECTION. HE D ID NOT SUBMIT THE TAX AUDIT REPORT ENVISAGED BY THAT SECTION ALON G WITH THE RETURN OF INCOME. HOWEVER, THE SAID REPORT WAS FILE D DURING THE ASSESSMENT PROCEEDINGS UNDER COVER OF A LETTER DATE D 31.01.2006. THE ASSESSMENT WAS COMPLETED BY ORDER D ATED 27.03.2006 ON A TOTAL INCOME OF RS.2,57,73,500/- AS AGAINST THE DECLARED TOTAL INCOME OF RS.79,117/-, AFTER MAKING VARIOUS ADDITIONS AND DISALLOWANCES ON ACCOUNT OF SALE OF S HARES AND PROFIT ON SALE OF LAND. AFTER COMPLETING THE ASSES SMENT, PENALTY PROCEEDINGS WERE TAKEN UNDER SECTION 271B OF THE AC T FOR THE DEFAULT COMMITTED BY THE ASSESSEE IN NOT SUBMITTING THE TAX AUDIT REPORT ON OR BEFORE THE SPECIFIED DATE MENTIO NED IN SECTION 44AB, WHICH IS 30 TH OCTOBER OF 2001. IN REPLY TO THE PENALTY ITA NO.2738/MUM/09 2 PROCEEDINGS, THE ASSESSEE WOULD APPEAR TO HAVE SUBM ITTED THAT HE HAD OBTAINED THE TAX AUDIT REPORT WELL WITHIN TH E TIME NAMELY ON 25.07.2001, BUT DUE TO OVERSIGHT IT WAS NOT FILE D ALONG WITH THE RETURN OF INCOME WHICH WAS FILED ON 30.07.2001 AND THAT THE OMISSION WAS DUE TO OVERSIGHT AND IT WAS ALSO P LEADED THAT ONCE THE OMISSION WAS NOTICED, THE ASSESSEE HASTENE D TO FILE THE REPORT ON 31.01.2006 IN THE COURSE OF THE ASSESSMEN T PROCEEDINGS. THESE SUBMISSIONS DID NOT FIND FAVOUR WITH THE ASSESSING OFFICER WHO IMPOSED THE IMPUGNED PENALTY. THE SAME HAVING BEEN CONFIRMED BY THE CIT(A), THE ASSESSEE I S IN FURTHER APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS. IT SEEMS TO US THAT THIS IS NOT A CASE FIT FOR PENALTY. THE ASSESSEE DO ES NOT DISPUTE THAT HE WAS LIABLE TO GET HIS ACCOUNTS AUDITED UNDE R SECTION 44AB OR THAT THE AUDIT REPORT SHOULD HAVE BEEN OBTA INED AND FILED ON OR BEFORE THE SPECIFIED DATE AS PER THE SE CTION. WHAT HE FURTHER SUBMITS IS THAT THOUGH HE OBTAINED THE REPO RT ON 25.07.2001, THE SAME WAS NOT FILED BEFORE THE SPECI FIED DATE ON ACCOUNT OF OVERSIGHT AND ONCE HE CAME TO KNOW OF IT , HE HASTENED TO FILE THE SAME EVEN BEFORE BEING REMINDE D BY THE ASSESSING OFFICER. IT IS FURTHER SUBMITTED THAT SIN CE THE AUDIT REPORT WAS BEFORE THE ASSESSING OFFICER WHEN HE WAS SEIZED OF THE ASSESSEES RETURN AND HAD COMMENCED THE ASSESSM ENT PROCEEDINGS, THERE WAS SUBSTANTIAL COMPLIANCE. IT I S SUBMITTED THAT IN THESE CIRCUMSTANCES THE PENALTY LEVIED WAS NOT JUSTIFIED. 4. THE LEARNED D.R., ON THE OTHER HAND, HAS POINTED OUT THAT EVEN THE TAX AUDIT REPORT HAD BEEN OBTAINED ON 25.0 7.2001, AS CLAIMED BY THE ASSESSEE, THERE WAS NO JUSTIFICATION FOR THE LONG DELAY OF ALMOST FIVE YEARS BEFORE IT WAS SUBMITTED TO THE ASSESSING OFFICER. IN THIS CONNECTION, IT IS POINTE D OUT THAT AFTER THE AMENDMENT MADE TO SECTION 44AB BY THE FINANCE A CT, 1995 WITH EFFECT FROM 1.7.1995, IT IS NOT ENOUGH IF THE ASSESSEE MERELY OBTAINS THE AUDIT REPORT BEFORE THE SPECIFIED DATE AND THAT IT IS ITA NO.2738/MUM/09 3 FURTHER REQUIRED OF HIM TO FURNISH THE SAME BEFORE THE SPECIFIED DATE, WHICH IN THIS CASE WAS 31.10.2001. IT IS CONT ENDED THAT SINCE THERE WAS NO REASONABLE CAUSE WITHIN THE MEAN ING OF SECTION 271B, THE PENALTY IMPOSED WAS JUSTIFIED. 5. IN OUR VIEW, AS ALREADY STATED, THIS IS NOT A CA SE FIT FOR LEVY OF PENALTY. IT IS NO DOUBT TRUE THAT THE ASSESSEE O UGHT TO HAVE FILED THE TAX AUDIT REPORT ON OR BEFORE 31.10.2001. THE INCOME- TAX AUTHORITIES HAVE NOT DOUBTED THE CLAIM OF THE A SSESSEE THAT THE TAX AUDIT REPORT WAS OBTAINED ON 25.7.2001. THE RE IS NO MATERIAL TO SUGGEST THAT OTHER THAN OVERSIGHT OR IN ADVERTENCE THERE WAS SOME OTHER MOTIVE ON THE PART OF THE ASSE SSEE TO WITHHOLD THE FILING OF THE TAX AUDIT REPORT ON OR BEFORE 31.10.2001. WE ARE INCLINED TO BELIEVE THE ASSESSEE S CLAIM THAT IT WAS DUE TO OVERSIGHT ALONE THAT THE REPORT WAS N OT FILED BEFORE THE ABOVE DATE. THE ASSESSEES BONAFIDE IS ALSO SEE N FROM THE FACT THAT EVEN WITHOUT BEING REMINDED BY THE ASSESS ING OFFICER, HE HAD FILED THE TAX AUDIT REPORT IN THE COURSE OF THE ASSESSMENT PROCEEDINGS. THIS ALSO SHOWS THAT THE ASSESSEE DID NOT WANT TO PLACE ANY IMPEDIMENT IN THE COMPLETION OF THE ASSES SMENT OR THE SCRUTINY OF THE ACCOUNTS. WE ARE ALSO INFORMED BY THE LEARNED COUNSEL FOR THE ASSESSEE THAT IN THE EARLIE R YEARS THERE WAS NO DEFAULT IN SUBMITTING THE TAX AUDIT REPORT. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT THERE WAS RE ASONABLE CAUSE INASMUCH AS IT WAS ONLY DUE TO OVERSIGHT OR I NADVERTENCE THAT THE TAX AUDIT REPORT WAS OMITTED TO BE FILED O N OR BEFORE THE SPECIFIED DATE. WE ACCORDINGLY CANCEL THE PENALTY A ND ALLOW THE APPEAL OF THE ASSESSEE WITH NO ORDER AS TO COSTS. ORDER PRONOUNCED ON THIS 8 TH DAY OF FEBRUARY, 2010. SD/- (RAJENDRA SINGH) SD/- ( R.V.EASWAR ) ACCOUNTANT MEMBER SENIOR VICE PRESIDENT MUMBAI, DATED 8 TH FEBRUARY, 2010. SOMU ITA NO.2738/MUM/09 4 COPY TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT-XII, MUMBAI. 4. THE CIT(A)-XII, MUMBAI 5. THE DR F BENCH /TRUE COPY/ BY ORDE R ASSTT. REGISTRAR, I.T.A.T, MUMBAI