Babasaheb Uttam bhakane, Ahmednagar V. Inocme-tax Officer,

ITA 327/PUN/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1188 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 20-02-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DHEERAJ KUMAR JAIN
• Assessee Lawyers: BHARAT H SHAH
• Keywords: Revised return
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , . . , BEFORE MS. SUSHMA CHOWLA , JM AND SHRI R.K. PANDA , AM IT A NO. 327 /PN/201 4 ASSESSMENT YEAR : 2008 - 09 BABASAHEB UTTAM DHAKANE, AMBIKA NAGAR CHUMBALI TAKLIMANUR, TALUKA : PATHARDI, DIST: AHMEDNAGAR 414 102. PAN : AISPD8338C . APPELLANT VS. THE INCOME TAX OFFICER, WARD 4, AHMEDNAGAR. . RESPONDE NT / APPELLANT BY : SHRI BHARAT H. SHAH / RESPONDENT BY : SHRI DHEERAJ KUMAR JAIN / DATE OF HEARING : 11 .0 8 .2015 / DATE OF PRONOUNCEMENT: 26 . 0 8 .2015 / ORDER PER SUSHMA CHO WLA, JM : THIS APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORDER OF CIT(A) - IT/TP , PUNE DATED 05.12.2013 RELATING TO ASSESSMENT YEAR 2008 - 09 AGAINST PENALTY LEVIED UNDER SECTION 271B OF THE INCOME - TAX ACT , 1961 . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING G ROUNDS OF APPEAL : - 1) THE LEARNED COMMISSIONER OF INCOME TAX ( APPEALS ) PUNE ERRED IN FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW BY SUSTAINING PENALTY LEVIED BY THE LEARNED ASSESSING OFFICER U/S 271 B OF THE INCOME TAX ACT WHO HAD LEVIED THE PENA LTY IRRESPECTIVE OF THE FACT THAT AUDIT REPORT U/S 44 AB OF INCOME TAX ACT WAS OBTAINED BY THE ASSESSEE MUCH BEFORE THE DUE DATE FOR FILING OF INCOME TAX RETURN. PENALTY SO LEVIED BE DELETED AND JUST AND PROPER RELIEF BE GRANTED TO THE ASSESSEE IN THIS RESPECT. 2 ITA NO. 327 /PN/201 4 2) THE APPELLANT PRAYS TO BE ALLOWED TO ADD, AMEND, MODIFY, RECTIFY, DELETE, RAISE ANY GROUND OF APPEAL BEFORE OR AT THE TIME OF HEARING. 3. THE ONLY ISSUE RAISED IN THE PRESENT APPEAL IS AGAINST THE LEVY OF PENALTY UNDER SECTION 271B OF THE A CT. 4. BRIEFLY, IN THE FACTS OF THE PRESENT CASE, THE ASSESSEE HAD FILED THE RETURN OF INCOME ON 26.03.2009 DECLARING TOTAL INCOME OF RS.1,77,130/ - . THE TOTAL TURNOVER OF THE ASSESSEE WAS OF RS.2,08,82,340/ - AND IN VIEW OF THE PROVISIONS OF SECTION 44AB OF THE ACT, IT WAS INCUMBENT UPON THE ASSESSEE TO GET HIS ACCOUNT S AUDITED. THE RETURN OF INCOME FILED BY THE ASSESSEE WAS PROCESSED UNDER SECTION 143(3) OF THE ACT. THE ASSESSING OFFICER NOTED THAT IN VIEW OF THE PROVISIONS OF SECTION 44AB READ WITH PRO VISIONS OF SECTION 271B OF THE ACT, THE ASSESSEE WAS TO FURNISH THE RETURN OF INCOME ALONG WITH A UDIT R EPORT OR TO SUBMIT HIS A UDIT R EPORT ON OR BEFORE 30.09.2008. HOWEVER, THE ASSESSEE FURNISHED THE RETURN OF INCOME ON 26.03.2009. THE ASSESSING OFFICER SHOW - CAUSED THE ASSESSEE TO EXPLAIN AS TO WHY AN ORDER IMPOSING PENALTY UNDER SECTION 271B OF THE ACT SHOULD NOT BE MADE. THE ASSESSEE HAD NOT REPLIED TO THE SHOW - CAUSE NOTICE AND ANOTHER OPPORTUNITY WAS GIVEN TO THE ASSESSEE TO WHICH ALSO, THE ASSESSEE D ID NO REPLY. THE ASSESSING OFFICER THUS HELD THE ASSESSEE TO HAVE FAILED TO FURNISH THE A UDIT R EPORT IN FORM NO.3CA AND 3CD REQUIRED UNDER SECTION 44AB OF THE ACT BY DUE DATE OF FILING OF RETURN OF INCOME AND CONSEQUENTLY HELD THE ASSESSEE TO BE LIABLE FO R LEVY OF PENALTY UNDER SECTION 271B OF THE ACT AT RS.1,00,000/ - . 5 . BEFORE THE CIT(A), THE CLAIM OF THE ASSESSEE WAS THAT HIS BOOKS OF ACCOUNT WERE AUDITED BEFORE 30.09.2008 THOUGH HE HAD FILED BELATED RETURN OF INCOME. SINCE THE ASSESSEE HAD NOT FURN ISHED THIS FACTUAL EXPLANATION BEFORE THE ASSESSING OFFICER AND ALSO FAILED TO APPEAR BEFORE THE ASSESSING OFFICER , T HE EXPLANATION OF THE ASSESSEE WAS HELD TO BE AN AFTERTHOUGHT AND IN VIEW THEREOF, THE PENALTY LEVIED UNDER SECTION 271B OF THE ACT FOR NOT FURNISHING OF A UDIT R EPORT IN FORM NO.3CA AND 3 ITA NO. 327 /PN/201 4 3CD AS REQUIRED UNDER SECTION 44AB OF THE ACT, BEFORE 30.09.2008, WAS UPHELD BY THE CIT(A) . 6. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF THE CIT(A). 7 . DURING THE COURSE OF HEARING, THE ASSESSEE FURNI SHED A PAPER BOOK IN WHICH AN AFFIDAVIT OF THE AUDITOR, MR. TAWANI ISHWAR HAS BEEN FILED WHEREIN HE HAS CERTIFIED THAT THE A UDIT OF THE A CCOUNTS UNDER SECTION 44AB OF THE ACT FOR THE FINANCIAL YEAR 2007 - 08 WAS CARRIED OUT AND HE HAD FURNISHED THE A UDIT R EP ORT DATED 28.09.2008. COPY OF THE REPORT IN FORM NO.3CB AND 3CD HAS BEEN ENCLOSED. FURTHER, REFERENCE HAS BEEN MADE TO THE CIRCULAR NO.5/2007 DATED 26.07.2007 UNDER WHICH IT WAS NOTIFIED THAT THE REPORT OF AUDIT UNDER SECTION 44AB OF THE ACT IS NOT TO BE ATTACHED WITH THE RETURN OF INCOME AND ALSO NOT TO BE FURNISHED SEPARATE LY BEFORE OR AFTER THE DUE DA TE. HOWEVER, THE ASSESSEE WAS REQUIRED TO GET THE REPORT OF AUDIT BEFORE DUE DATE OF FURNISHING THE RETURN OF INCOME. 8 . THE LD. DEPARTMENTAL REPRESEN TATIVE FOR THE REVENUE PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW. 9 . WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD. UNDER THE PROVISIONS OF SECTION 44AB OF THE A CT , WHERE ANY PERSON IS CARRYING ON BUSINESS OR PROFESS ION AND HIS TOTAL SALES, TURNOVER OR GROSS RECEIPTS, AS THE CASE MAY BE, EXCEEDED FORTY LAKH RUPEES , IN ANY PREVIOUS YEAR , THEN HE HAS REQUIRED TO GET HIS ACCOUNTS AUDITED FOR SUCH PREVIOUS YEAR BY AN ACCOUNTANT, BEFORE THE SPECIFIED DATE AND FURNISH BY TH AT DATE, THE REPORT OF SUCH AUDIT IN THE PRESCRIBED FORM, DULY SIGNED AND VERIFIED BY SUCH ACCOUNTANT, FURNISHING SUCH PARTICULARS AS MAY BE PRESCRIBED. WHERE THE PERSON FAILS TO GET HIS ACCOUNTS AUDITED IN RESPECT OF ANY PREVIOUS YEAR OR FAILS TO FURNISH A REPORT OF SUCH AUDIT, AS REQUIRED UNDER SECTION 44AB OF THE ACT, BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME THEN THE ASSESSING OFFICER MAY DIRECT THAT SUCH PERSON SHALL PAY, BY WAY OF PENALTY, A SUM 4 ITA NO. 327 /PN/201 4 EQUAL TO 1 % OF THE TOTAL SALES/TURNOVER OR G ROSS RECEIPTS, AS THE CASE MAY BE , IN BUSINESS OR GROSS RECEIPTS IN PROFESSION OR A SUM OF HUNDRED THOUSAND RUPEES, WHICHEVER IS LESS . FROM THE READING OF THE PROVISIONS OF THE ACT, IT IS INCUMBENT UPON FROM PERSON , CARRYING ON ANY BUSINESS OR PROFESSION WHERE THE TOTAL SALES, TURNOVER OR GROSS RECEIPT S EXCEED ED FORTY LAKH RUPEES , IN ANY PREVIOUS YEAR , THEN HE IS STATUTOR IL Y REQUIRED TO GET HIS ACCOUNT S AUDITED BY AN ACCOUNTANT BEFORE THE SPECIFIED DATE AND FURNISH THE AUDIT REPORT IN THE PRESCRIBED FORM D ULY SIGNED , BEFORE THE DUE DATE OF FURNISHING THE RETURN OF INCOME . I N CASE OF FA ILURE OF THE ASSESSEE TO DO SO, LEVY OF PENALTY PROVIDED UNDER SECTION 271B OF THE ACT ARE ATTRACTED. INITIALLY, THE RETURNS OF INCOME WERE FILED IN PHYSICAL FORMAT AND IT W AS INCUMBENT UPON EACH PERSON , IN WHOSE CASE THE PROVISIONS OF SECTION 44AB OF THE ACT ARE ATTRACTED , TO FURNISH THE A UDIT R EPORT DULY SIGNED IN THE PRESCRIBED FORM ALONG WITH THE RETURN OF INCOME. HOWEVER, THE CENTRAL BOAR D OF DIRECTOR TAXES VIDE NOTIFIC ATION NO.S.O. NO.762(E) DATED 14 TH MAY, 2007 HAD NOTIFIED NEW RETURN FORMS FOR ASSESSMENT YEAR 2007 - 08. IT WAS FURTHER PROVIDED UNDER SUB - RULE (3) OF RULE 12 FOR ASSESSMENT YEAR 2007 - 08. IT WAS FURTHER PROVIDED UNDER SUB - RULE (3) OF RULE 12 OF THE INCOME TAX RULES, 1962 (IN SHORT THE RULES ) THAT THE RETURN OF INCOME/FRINGE BENEFITS CO ULD BE FURNISHED IN ANY OF THE FOLLOWING MANNERS : - (I) FURNISHING THE RETURN IN A PAPER FORM; (II) FURNISHING THE RETURN ELECTRONICALLY UNDER DIGITAL SIGNATURE; (III) TRANS MITTING THE DATA IN THE RETURN ELECTRONICALLY AND THEREAFTER SUBMITTING THE VERI FICATION OF THE RETURN IN FORM ITR - V; (IV) FURNISHING A BAR - CODED RETURN IN A PAPER FORM. 10 . FURTHER, IN EXERCISE OF POWERS CONFERRED BY SECTION 139C READ WITH CLAUSE (EEBA) OF SUB - SECTION (2) OF SECTION 295 OF THE ACT, IT WAS PROVIDED IN SUB - RULE (2) OF RULE 12 OF THE RULES THAT THE RETURN TO BE FURNISHED IN THE ABOVE - MENTIONED FORMS (EXCEPT IN ITR - 7) SHALL NOT BE ACCOMPANIED BY ANY ATTACHMENTS/ANNEXURES. T HE CBDT IN VIEW THEREOF ISSUED A CIRCULAR NO.5/2007 DATED 26.07.2007 UNDER WHICH IT WAS CLARIFI ED THAT THE TAX PAYERS SHOULD NOT ENCLOSE WITH REVISED RETURN FORMS , ANY STATEMENT SHOWING THE COMPUTATION OF INCOME OR TAX, COPIES OF BALANCE - SHEET, PROFIT AND LOSS ACCOUNT, TDS/TCS CERTIFICATES, PROOF OF PAYMENT OF ADVANCE TAX OR SELF - 5 ITA NO. 327 /PN/201 4 ASSESSMENT TAX. HO WEVER, THE SAID DOCUMENTS SHALL BE PRODUCED BEFORE THE ASSESSING OFFICER ON DEMAND BY HIM. FURTHER, CLARIFICATION WAS GIVEN BY THE SAID CIRCULAR THAT THE REPORT OF AUDIT UNDER SECTION 44AB OF THE ACT WAS NOT TO BE ATTACHED WITH THE RETURN OF INCOME. IT W AS DIRECTED THAT THE SAME SHOULD BE FURNISHED SEPARATELY ALSO BEFORE OR AFTER THE DUE DATE. HOWEVER, IT WAS INCUMBENT UPON THE ASSESSEE TO GET THE REPORT OF AUDIT FROM THE ACCOUNTANT UNDER SAID SECTION BEFORE THE DUE DATE OF FURNISHING THE RETURN OF INCOM E AND THE RELEVANT COLUMNS OF THE RETURN FORMS SHOULD BE FILLED ON THE BASIS OF SUCH REPORT. THE ASSESSEE WAS REQUIRED TO RETAIN THE REPORT WITH HIMSELF AND COULD PRODUCE THE SAME IN ORIGINAL DURING THE ASSESSMENT PROCEEDINGS. IT WAS ALSO CLARIFIED BY TH E SAID CIRCULAR THAT NO PENALTY UNDER SECTION 271B OF THE A CT SHALL BE INITIATED OR LEVIED FOR NOT FURNISHING THE TAX AUDIT REPORT ON OR BEFORE THE DUE DATE. HOWEVER, IF THE AUDIT REPORT HAS NOT BEEN OBTAINED BEFORE THE DUE DATE, PROVISIONS OF SECTION 271 B OF THE ACT SHALL BE ATTRACTED. 11 . NOW, COMING TO THE FACTS OF THE PRESENT CASE, THE ASSESSEE , FOR THE YEAR UNDER CONSIDERATION I.E. A.Y. 2008 - 09 , HAS FURNISHED THE RETURN OF INCOME ELEC TRONICALLY ON 26.03.2009. THE SAID FACT HAS BEEN NOTED BY THE ASSE SSING OFFICER WHILE PASSING THE ORDER UNDER SECTION 271B OF THE ACT. SINCE THE ASSESSEE IS GOVERNED BY THE NEW RULES UNDER WHICH THE RETURN OF INCOME , IF FILED , ELECTRONICALLY IS NO T TO BE ACCOMPANIED BY ANY OF THE DOCUMENTS INCLUDING TDS CERTIFICATE, ADV ANCE TAX RECEIPT, BALANCE SHEET AND/OR AUDIT REPORT OBTAINED IN THE PRESCRIBED FORM UNDER THE PROVISIONS OF SECTION 44AB OF THE ACT. THE REQUIREMENT OF THE STATUTE WAS THAT THE BOOKS OF ACCOUNT SHOULD BE AUDITED BEFORE 30.09.2008 AND THE PARTICULARS OF TH E AUDIT REPORT SHOULD BE FURNISHED IN THE RETURN OF INCOME, WHICH WAS ELECTRONICALLY FILED BY THE ASSESSEE. THE CASE OF THE ASSESSEE BEFORE US IS THAT IT HAD OBTAINED THE AUDIT REPORT FROM THE AUDITOR IN FORM NO.3CB AND 3CD BEFORE THE DUE DATE FOR FILING THE RETURN OF INCOME AND IN EVIDENCE THE ASSESSEE HAS FILED THE COPY OF THE AUDIT REPORT AT PAGES 2 TO 13 OF THE PAPER BOOK, WHICH IS DATED 6 ITA NO. 327 /PN/201 4 28.09.2008. THE DUE DATE FOR FILING THE RETURN OF INCOME IN THE CASE OF THE ASSESSEE WAS 30.09.2008 AND WHERE THE A SSESSEE HAD OBTAINED THE AUDIT REPORT BEFORE THE DUE DATE OF FILING THE RETURN OF INCOME, WE FIND NO MERIT IN THE ORDERS OF THE AUTHORITIES BELOW. THE CIRCULAR NO.5/2007 (SUPRA) IS SQUARELY ATTRACTED IN THE PRESENT CASE AND IN VIEW THEREOF, THERE WAS NO R EQUIREMENT FOR THE ASSESSEE TO FURNISH THE AUDIT REPORT OBTAINED UNDER THE PROVISIONS OF SECTION 44AB OF THE ACT , ALONG WITH THE RETURN OF INCOME AND THE SAME IS TO BE FILED ONLY WHEN THE ASSESSING OFFICER ASKED FOR THE SAME. IN THE TOTALITY OF THE ABOVE - SAID FACTS AND CIRCUMSTANCES AND IN VIEW OF THE AFFIDAVIT OF THE CHARTERED ACCOUNTANT , WHO HAD CARRIED OUT THE AUDIT IN THE CASE OF THE ASSESSEE, WE FIND NO MERIT IN THE LEVY OF PENALTY UNDER SECTION 271B OF THE ACT. ACCORDINGLY, WE DIRECT THE ASSESSING O FFICER TO DELETE THE PENALTY UNDER SECTION 271B OF THE ACT AT RS.1,00,000/ - . THE GROUND OF APPEAL RAISED BY THE ASSESSEE IS THUS , ALLOWED. 12 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 26 TH DAY OF AUGUST , 2015. SD/ - SD/ - ( R.K. PANDA ) ( SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER PUNE ; DATED : 26 TH AUGUST , 2015. / GCVSR / COPY OF THE O RDER IS FORWARDED TO : 1 ) THE ASSESSEE; 2 ) THE DEPARTMENT; 3 ) THE CIT(A) - IT/TP , PUNE ; 4 ) THE CIT - IT/TP, PUNE; 5 ) THE DR A BENCH, I.T.A.T., PUNE; 6 ) GUARD FILE. / BY ORDER , //TRUE COPY// / SR. PRIVATE SECRETARY , / ITAT, PUNE