Natraj Traders, CHENNAI V. ITO, CHENNAI

ITA 3222/CHNY/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4613 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-05-2017
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2013-2014
• Appeal Filed On: 24-11-2016
• Court: TRIBUNAL
• Department Lawyers: NATARAJA
• Assessee Lawyers: B JAISHEILA
• Keywords: Reasonable cause

Judgement Text

, , IN THE INCOME - TAX APPELLATE TRIBUNAL A BENCH, CHENNAI , . , BEFORE SHRI CHANDRA POOJARI , ACCOUNTANT MEMBER & SHRI DUVVURU RL REDDY , J UDICIAL MEMBER ./ I.T.A.NO. 3222 /MDS/2016 / ASSESSMENT YEAR :20 1 3 - 1 4 NATRAJ TRADERS , NO. 45, STROTTEN MUTHIAH MUDALI STREET, CHENNAI 600 0 79 . [PAN: A A A F N4320J ] VS. THE INCOME TAX OFFICER , NON CORPORATE WARD 5( 2 ) , CHENNAI 600 0 06 . ( / APPELLANT ) ( / RESPONDENT ) / APPELLANT BY : MS. B. JAISHEILA, C.A. / RESPONDENT BY : SHRI N ATARAJA , J CIT / DATE OF HEARING : 1 3 . 0 2 .201 7 / DAT E OF P RONOUNCEMENT : 04. 0 5 .201 7 / O R D E R PER DUVVURU RL REDDY , JUDICIAL MEMBER : THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) 5 , C HENNAI DATED 2 8 . 0 9 .2016 RELEVANT TO THE AS SESSMENT YEAR 20 1 3 - 1 4 . THE ONLY EFFECTIVE GROUND RAISED IN THE APPEAL OF THE ASSESSEE IS THAT THE LD. CIT(A) HAS ERRED IN CONFIRMING THE PENALTY LEVIED UNDER SECTION 271B OF THE INCOME TAX ACT, 1961 { ACT IN SHORT]. I.T.A. NO . 3222 /M/ 1 6 2 2. BRIEF FACTS OF THE CASE ARE THAT T HE ASSESSEE FIRM HAS FILED ITS RETURN OF INCOME ON 01.04.2014 ADMITTING AN INCOME OF .26,400/ - . THE RETURN FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(1) OF THE ACT. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER HAS NOTICED THAT THE ASSESSEE HAS DERIVING INCOME FROM BUSINESS AND ADMITTED A TOTAL TURNOVER OF .4,04,92,962/ - . A PER SECTION 44AB OF THE ACT, THE ASSESSEE OUGHT TO HAVE FURNISHED THE AUDIT REPORT ON OR BEFORE 30.09.2013, WHEREAS, THE AUDIT REPORT UNDER SECTION 44AB OF THE ACT WAS NOT FURNISHED. THUS, THE ASSESSING OFFICER LEVIED PENALTY UNDER SECTI ON 271B OF THE ACT. 3. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE LD. CIT(A) AGAINST LEVY OF PENALTY. AFTER CONSIDERING THE SUBMISSION OF THE ASSESSEE, THE LD. CIT(A) CONFIRMED THE PENALTY LEVIED UNDER SECTION 271B OF THE ACT. 4. ON BEING A GGRIEVED, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. BY FILING COPY OF THE DISCHARGE SUMMARY REPORT OF THE HOSPITAL IN RESPECT OF SHRI PRADEEP C. JAIN, THE LD. COUNSEL FOR THE ASSESSEE HAS SUBMITTED THAT THE PARTNER OF THE FIRM SHRI PRADEEP CHAMPALAL J AIN , WHO LOOKS AFTER THE ACCOUNTS AND OTHER RELATED MATTERS, WAS HOSPITALIZED FOR TREATMENT AND THEREFORE, THE ASSESSEE FIRM COULD NOT FURNISH THE SAME IN TIME. IT WAS SUBMITTED THAT THE ASSESSEE HAS OBTAINED THE AUDIT REPORT UNDER SECTION 44AB OF THE ACT ALONG WITH THE FINANCIAL STATEMENTS FOR THE YEAR ENDING I.T.A. NO . 3222 /M/ 1 6 3 31.03.2013 ON 15.09.2013. THEREFORE, THE LD. COUNSEL FOR THE ASSESSEE HAS PRAYED THAT THE PENALTY LEVIED UNDER SECTION 271B OF THE ACT MAY BE DELETED. 5. ON THE OTHER HAND , THE LD. DR SUPPORTED TH E ORDERS OF AUTHORITIES BELOW. 6. WE HAVE HEARD BOTH SIDES, PERUSED THE MATERIALS AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IN THE PENALTY ORDER, THE ASSESSING OFFICER HAS OBSERVED THAT THE ASSESSEE HAS NOT FURNISHED THE AUDI T REPORT UNDER SECTION 44AB OF THE ACT AND THE ASSESSEE ALSO ADMITTED THAT THE SAID AUDIT REPORT WAS FURNISHED ON 11.09.2014. THE REASON FOR LEVY OF PENALTY UNDER SECTION 271B OF THE ACT IS THAT IF ANY PERSON FAILS WITHOUT REASONABLE CAUSE TO GET HIS ACC OUNTS AUDITED WITHIN THE TIME STIPULATED AND FAILURE ON HIS PART TO FURNISH A REPORT OF SUCH AUDIT. IN THE PENALTY ORDER, THE ASSESSING OFFICER HAS NOT DISPUTED THAT THE ASSESSEE HAS NOT GET ITS ACCOUNTS AUDITED WITHIN THE TIME STIPULATED AND FURTHER THE A SSESSEE HAS NOT FILED THE AUDIT REPORT BEFORE THE ASSESSING OFFICER. THE ACTUAL DISPUTE WAS DELAY IN FILING OF THE RETURN AND THE AUDIT REPORT AND THE ASSESSEE S CONTENTION WAS THAT DUE TO CIRCUMSTANCES BEYOND THE CONTROL OF THE ASSESSEE THE SAME ARE NOT F ILED DUE TO REASONABLE CAUSE AS EXPLAINED BEFORE THE ASSESSING OFFICER. ON CAREFUL PERUSAL OF THE PROVISIONS OF SECTION 271B OF THE ACT, IT IS CLEAR THAT PENALTY UNDER THIS SECTION CANNOT LEVIED FOR BELATED FILING OF RETURN OF INCOME AND THE AUDIT REPORT U NDER SECTION 44AB OF I.T.A. NO . 3222 /M/ 1 6 4 THE ACT. ONLY IF THE ASSESSEE HAS NOT GET ITS ACCOUNTS AUDITED WITHIN THE STIPULATED, PENALTY UNDER SECTION 271B OF THE ACT SHALL BE LEVIABLE. 6.1 A FTER THE INTRODUCTION OF ANNEXURE LESS FORMS , I.E ., ITR4, ITR5, ITR6 ETC., THE TAX AUD IT REPORT IS NOT REQUIRED TO BE SUBMITTED ALONG WITH THE RETURN OF INCOME NOR IT IS TO BE SUBMITTED SEPARATELY ANY TIME BEFORE OR AFTER THE DUE DATE. BUT ONE SHOULD GET THE TAX AUDIT REPORT FROM HIS CA BEFORE THE DUE DATE OF SUBMITTING THE RETURN OF INCOME AND FILL THE RELEVANT COLUMNS OF THE RETURN OF INCOME ON THE BASIS OF SUCH REPORT . THE TAX AUDIT REPORT IS REQUIRED TO BE SUBMITTED IF IT IS CALLED FOR BY THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS. THIS HAS ALSO BEEN EXPLAINED IN CBDT'S CIRC ULAR NO 3 OF 2009. THE RELEVANT PORTION OF THE SAID CIRCULAR IS REPR O DUCED HERE IN BELOW: '7. FOLLOWING CLARIFICATIONS ARE ALSO ISSUED IN RESPECT OF CERTAIN ISSUES ARISING FROM FURNISHING THE RETURNS IN THE ABOVE MENTIONED FORMS: (I) AN ASSESSEE SHOULD OB TAIN THE REPORT OF AUDIT FROM AN ACCOUNTANT UNDER SECTION 44AB OF THE ACT ON OR BEFORE THE DUE DATE OF THE FURNISHING OF THE RETURN AND SHOULD FILL OUT THE RELEVANT COLUMNS OF THE RETURN FORMS ON THE BASIS OF SUCH REPORT. HOWEVER, THE REPORT OF AUDIT SHOUL D NOT BE ATTACHED WITH THE RETURN OR FURNISHES SEPARATELY ANY TIME BEFORE OR AFTER THE DUE DATE. THE ASSESSEE SHOULD RETAIN THE REPORT WITH HIMSELF. IF CALLED FOR BY ANY INCOME - TAX AUTHORITY DURING ANY PROCEEDING UNDER THE ACT, IT SHALL BE INCUMBENT UPON T HE ASSESSEE TO FURNISH/PRODUCE THE SAME IN ORIGINAL. NO PENALTY UNDER SECTION 271B SH ALL BE INITIATED OR LEVIED FOR NOT FURNISHING THE TAX AUDIT REPORT ON OR BEFORE THE DUE DATE. HOWEVER, IF THE AUDIT REPORT HAS I.T.A. NO . 3222 /M/ 1 6 5 NOT BEEN OBTAINED BEFORE THE DUE DATE, PROVISIONS OF SECTION 271B SHALL CONTINUE TO BE ATTRACTED.' AS PER THE ABOVE CIRCULAR , TH E ASSESSEE IS NOT IN CONTRAVENTION OF ANY PROVISIONS IF TAX AUDIT REPORT IS OBTAINED BEFORE DUE DATE. IN THE PRESENT CASE, THE ASSESSEE HAS SUBMITTED BEFORE THE ASSESSING OFFICER THAT THE ASSESSEE HAS OBTAINED AUDIT REPORT UNDER SECTION 44AB OF THE ACT ALO NG WITH THE FINANCIAL STATEMENT FOR THE YEAR ENDING 31.03.2013 ON 15.09.2013 AND THIS WAS ALSO NOT DISPUTED IN THE PENALTY PROCEEDINGS BY THE ASSESSING OFFICER. UPON PERSONAL OF THE DISCHARGE SUMMARY OF THE PARTNER OF THE ASSESSEE FIRM, WE ARE OF THE CONSI DERED OPINION THAT THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE IN FILING THE BELATED RETURN AS WELL AS AUDIT REPORT BEFORE THE DEPARTMENT. UNDER THESE CIRCUMSTANCES, PENALTY UNDER SECTION 271B OF THE ACT CANNOT BE LEVIED FOR BELATED FILING OF RETURN AND AUDIT REPORT AND THUS, THE PENALTY LEVIED UNDER SECTION 271B OF THE ACT IS DELETED. 7 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED ON THE 4 TH MAY , 201 7 AT CHENNAI. SD/ - SD/ - ( CHANDRA POOJARI ) ACCOUNTANT MEMBER ( DUVVURU RL REDDY ) JUDICIAL MEMBER CHENNAI, DATED, THE 04 . 0 5 .201 7 VM/ - / COPY TO: 1. / APPELLANT , 2. / RESPONDENT , 3. ( ) / CIT(A) , 4. / CIT , 5. / DR & 6. / GF.