Shri Bhimraj P.Gupta, Baroda V. The ACIT, Circle-2(1),., Baroda

ITA 2973/AHD/2014

• Counselvise Citation: [2018] 126 COUNSELVISE.COM (IT) 5955 (ITAT-AHMEDABAD)
• Duration Of Justice: 3 year(s) 3 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2010-2011
• Appeal Filed On: 12-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: O P PATHAK

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD A BENCH (BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER & SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER) ITA. NO: 2973/AHD/2014 (ASSESSMENT YEAR: 2010-11) SHRI BHIMRAJ P. GUPTA 28, SHIVDAS NAGAR, MAKARPURA, BARODA V/S ASST. COMM. OF INCOME TAX CIRCLE-2(1), BARODA (APPELLANT) (RESPONDENT) PAN: ACCPG7529E APPELLANT BY : SHRI MANISH SHAH RESPONDENT BY : SHRI O. P. PATHAK, SR. D.R. ( )/ ORDER DATE OF HEARING : 22 -02-201 8 DATE OF PRONOUNCEMENT : 26 -2-2018 PER N.K. BILLAIYA, ACCOUNTANT MEMBER: 1. THIS APPEAL BY THE ASSESSEE IS PREFERRED AGAINST TH E ORDER OF THE LD. CIT(A)- II, BARODA DATED 27.08.2014 PERTAINING TO A.Y. 2010 -11. ITA NO. 2973 /AHD/2014 . A.Y. 2010-1 1 2 2. THE ONLY GRIEVANCE OF THE ASSESSEE IS THAT THE LD. CIT(A) ERRED IN CONFIRMING THE PENALTY OF RS. 1,00,000/- LEVIED U/S. 271B OF T HE ACT ON THE GROUND THAT THERE IS A DELAY IN OBTAINING THE TAX AUDIT REPORT U/S. 44AB OF THE ACT. 3. THE FACTS WHICH TRIGGERED THE PENAL PROCEEDINGS U/S . 271B OF THE ACT ARE THAT THE ASSESSEE FILED RETURN OF INCOME ON 09.09.2 011ELECTRONICALLY. THE RETURN WAS SELECTED FOR SCRUTINY ASSESSMENT AND DUR ING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEEDINGS; THE A.O. NOTICED T HAT THE AUDIT REPORT IS DATED21.03.2011. THE A.O. WAS OF THE OPINION THAT S INCE THE AUDIT REPORT WAS NOT OBTAINED BEFORE THE SPECIFIED DATE, THE ASS ESSEE IS LIABLE FOR PENALTY U/S. 271B OF THE ACT. THE A.O. LEVIED PENAL TY OF RS. 1,00,000/- FOR THE DEFAULT. 4. THE ASSESSEE CARRIED THE MATTER BEFORE THE LD. CIT( A) BUT WITHOUT ANY SUCCESS. 5. BEFORE US, THE LD. COUNSEL FOR THE STATED THAT THE DELAY IN GETTING ACCOUNTS AUDITED IS MAINLY DUE TO CASCADING EFFECT OF THE SE ARCH OPERATIONS CARRIED ON IN JUNE 2008 ON THE APPELLANT AND HIS WHOLE FAMI LY AND THEIR VARIOUS INDUSTRIAL CONCERNS. IT IS THE SAY OF THE LD. COUNS EL THAT DURING THE COURSE OF SEARCH NUMEROUS DOCUMENTS AND DATA WERE SEIZED WITH RESULTED IN DELAY IN FINALIZING THE ACCOUNTS OF F.Y. 2008-09, WHICH FURT HER DELAYED THE UPDATING OF THE ACCOUNTS FOR F.Y. 2009-10 I.E. THE YEAR UNDE R APPEAL. THE LD. COUNSEL CONCLUDED BY SAYING THAT THE ASSESSEE WAS PREVENTED BY REASONABLE AND ITA NO. 2973 /AHD/2014 . A.Y. 2010-1 1 3 SUFFICIENT CAUSE FOR NOT GETTING ITS ACCOUNTS ON OR BEFORE THE DUE DATE. THEREFORE, THE PENALTY SO LEVIED SHOULD BE DELETED. 6. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE AUTH ORITIES BELOW. IT IS TRUE THAT THE AUDIT REPORT IS DATED 21.03.2011. IT IS EQ UALLY TRUE THAT THE AUDIT REPORT WAS AVAILABLE WITH THE A.O. AT THE TIME OF T HE ASSESSMENT PROCEEDINGS AND THE A.O. WAS NOT DEPRIVED WITH THE BENEFITS OF GOING THROUGH THE AUDIT REPORT WHILE FRAMING THE ASSESSME NT ORDER U/S. 143(3)OF THE ACT. 7. THE FACTS ON RECORD SHOW THAT DUE TO THE SEARCH OPE RATIONS AND IMPOUNDING OF DOCUMENTS, THE FINALIZATION OF ACCOUN TS FOR F.Y. 2008-09 WAS DELAYED. WHICH FURTHER DELAYED THE ACCOUNTS FOR F.Y . 2009-10 RELEVANT TO THE IMPUGNED ASSESSMENT YEAR. 8. NOWADAYS THE RETURN OF INCOME IS FILED ELECTRONICAL LY AND IT IS A PAPERLESS RETURN WHICH MEANS THAT THE AUDIT REPORT CAN ONLY B E FURNISHED AT THE TIME OF THE ASSESSMENT PROCEEDINGS WHICH WAS THERE IN TH E CASE IN HAND. FURTHER, MORE DUE TO THE SEARCH OPERATIONS, THE FIN ALIZATION OF THE ACCOUNTS OF THE ASSESSEE GOT DELAYED. IN OUR CONSIDERED OPIN ION, THE ASSESSEE COULD NOT COMPLY WITH THE PROVISIONS BECAUSE THERE WAS A DELAY IN FINALIZING THE ACCOUNTS IN THE PRECEDING YEAR. ON IDENTICAL SET OF FACTS, THE HONBLE HIGH COURT OF GUJARAT IN THE CASE OF TEA KING 123 TAXMAN N.COM 162 HAS HELD THAT WHERE THE ASSESSEE COULD NOT COMPLY WITH THE PROVI SIONS FOR SUBSEQUENT YEARS BECAUSE ITA NO. 2973 /AHD/2014 . A.Y. 2010-1 1 4 THERE WAS NO AUDIT FOR PRERCEDING YEAR, NO PENALTY COULD BE IMPOSED ON ASSESSEE FOR SUBSEQUENT YEARS. 9. RESPECTFULLY FOLLOWING THE FINDINGS OF THE HONBLE JURISDICTIONAL HIGH COURT OF GUJARAT (SUPRA), WE SET ASIDE THE FINDINGS OF TH E LD. CIT(A) AND DIRECT THE A.O. TO DELETE THE PENALTY OF RS. 1,00,000/-. 10. APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON 26- 02- 20 18 SD/- SD/- (RAJPAL YADAV) (N. K. BILLAIYA) JUDICIAL MEMBER TRUE COPY A CCOUNTANT MEMBER AHMEDABAD: DATED 26/02/2018 RAJESH COPY OF THE ORDER FORWARDED TO: - 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT (APPEALS) 4. THE CIT CONCERNED. 5. THE DR., ITAT, AHMEDABAD. 6. GUARD FILE. BY ORDER DEPUTY/ASSTT.REGISTRAR ITAT,AHME DABAD