M.R. ASSOCIATES, MUMBAI V. ITO 25(2)(4), MUMBAI

ITA 3462/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3276 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: B
• Next Hearing Date: 08-06-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 15-05-2014
• Court: TRIBUNAL
• Department Lawyers: SACCH IDANAND DUBE

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH, MUMBAI BEFORE S/SHRI B.R. BASKARAN (AM) & RAMLAL NEGI (JM) I.T.A. NO. 3462 /MUM/ 20 14 (ASSESSMENT YEAR 200 8 - 0 9 ) M/S. M.R. ASSO CIATES 1, DHIRENDRA VILLA 2 PLOT NO. 12, DAULAT NAGAR BORIVALI EAST MUMBAI - 400 0 66. VS. ITO 25(2)(4 MUMBAI ( APPELLANT ) ( RESPONDENT ) PAN NO . AAOFM3100B ASSESSEE BY SHRI TARUN GHIA DEPARTMENT BY SHRI SACCHIDANAND DUBE DATE OF HEARING 8 . 6. 201 6 DATE OF PRONOUNCEMENT 8 . 6 . 201 6 O R D E R PER B.R. BASKARAN, A M : - THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 19.2. 2014 PASSED BY LEARNED CIT(A) - 3 5 , MUMBAI AND IT RELATES TO A.Y. 200 8 - 0 9, WHEREIN HE HAS CONFIRMED THE PENALTY OF ` 80,529/ - LEVIED BY THE ASSESSING OFFICER U/S. 271B OF THE ACT. 2. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. THE ASSESSEE IS A CIVIL CONTRACTOR. THE ASSESSEE FILED ITS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 2.2.2009 DECLARING TOTAL INCOME AT ` 18.44 LAKHS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, T HE ASSESSING OFFICER NOTICED THAT THE TOTAL TURNOVER OF THE ASSESSEE STOOD AT ` 1.61 CRORES AND HENCE THE ASSESSEE W AS REQUIRED TO GET ITS BOOKS OF ACCOUNT AUDITED BEFORE STIPULATED TIME U/S 44AB OF THE ACT. HE NOTICED THAT THE ASSESSEE HAS FILE D THE RETU RN OF INCOME BEYOND THE S TIPULATED TIME. ACCORDINGLY THE AO TOOK THE VIEW THAT THE ASSESSEE HAS COMMITTED DEFAULT IN TERMS OF SEC. 44AB OF THE ACT AND ACCORDINGLY INITIATED PENALTY PROCEEDINGS U/S. 271B OF THE ACT . THE ASSESSEE SUBMITTED BEFORE THE M/S. M.R. ASSOCIATES 2 AO T HAT, AS PER THE CIRCULAR NO. 5/2007 ISSUED BY CBDT, FILING OF AUDIT REPORT ALONG WITH RETURN OF INCOME HAS BEEN DONE AWAY WITH. IT WAS FURTHER SUBMITTED THAT THE RETURN OF INCOME WAS FILED ELECTRONICALLY , WHEREIN THE D ETAILS OF AUDIT OR AS WELL AS THE DATE OF AUDIT REPORT WAS DULY MENTIONED . ACCORDINGLY, IT WAS SUBMITTED THAT THE AUDIT REPORT WAS OBTAINED BY THE ASSESSEE WITHIN DUE DATE PRESCRIBED U/S 44AB OF THE ACT . HOWEVER, THE ASSESSING OFFICER TOOK THE VIEW THAT THE ASSESSEE WOULD HAVE FILED THE RETUR N OF INCOME WITHIN DUE DATE PRESCRIBED U/S 139(1) OF THE ACT, HAD HE OBTAINED THE AUDIT REPORT WITHIN DUE DATE PRESCRIBED UNDER SEC. 44AB OF THE ACT. ACCORDINGLY HE INFERRED THAT THE ASSESSEE HAS NOT OBTAINED THE AUDIT REPORT WITHIN THE DUE DATE. T HE ASSE SSING OFFICER FURTHER STRENGTHENED HIS VIEW BY OBSERVING THAT THE AUDIT REPORT DOES NOT MENTION DATE ANYWHERE. ACCORDINGLY, HE TOOK THE VIEW THAT THE ASSESSEE DID NOT GET AUDIT REPORT WITHIN DUE DATE PRESCRIBED U/S. 44AB OF THE ACT AND ACCORDINGLY LEVIED P ENALTY OF ` 80,529/ - U/S. 271B OF THE ACT. 3. LEARNED CIT(A) DID NOT AGREE WITH THE ASSESSING OFFICER THAT BE LATED FILING OF RETURN WOULD GIVE RISE TO A PRESUMPTION THAT THE AUDIT REPORT WAS NOT OBTAINED IN TIME. HOWEVER, SINCE THE AUDIT REPORT SUBMITTE D BY THE ASSESSEE DID NOT CARRY DATE OF AUDIT, THE LEARNED CIT(A) T OOK THE VIEW THAT THE SAME CASTS A DOUBT ON THE CLAIM OF THE ASSESSEE . ACCORDINGLY, HE AGREED WITH THE AO THAT THE ASSESSEE HAS NOT GOT HIS ACCOUNTS AUDITED WITHIN THE PRESCRIBED TIME LIMIT AND ACCORDINGLY CONFIRMED THE PENALTY LEVIED BY THE ASSESSING OFFICER U/S 271B OF THE ACT . 4. WE HAVE HEARD THE PARTIES AND PERUSED THE RECORD. IT IS AN ADMITTED FACT THE ASSESSEE HAS FURNISHED AUDIT REPORT BEFORE THE ASSESSING OFFICER DURING THE COURSE OF ASSESSMENT PROCEEDINGS. IT IS ALSO AN UNDISPUTED FACT THAT DATE OF AUDIT REPORT AND DETAILS OF AUDITOR HAVE BEEN DULY MENTIONED IN THE RETURN OF INCOME FILED ELECTRONICALLY BY THE ASSESSEE. WE HAVE NOTICED EARLIER THAT THE LD CIT(A) HAS CONFIRMED THE P ENALTY ONLY FOR THE REASON THAT THE AUD IT REPORT DID NOT MENTION THE DATE OF AUDIT AND HENCE THE ASSESSEE WOULD NOT HAVE GOT THE M/S. M.R. ASSOCIATES 3 ACCOUNTS AUDITED BY THE PRESCRIBED DATE . WE NOTICE THAT THE TAX AUTHORITIES HAVE COME TO SUCH A CONCLUSION PURELY ON PRESUMPTI ONS AND NEITHER THE ASSESSING OFFICER NOR LEARNED CIT(A) CHOSE TO SEEK CLARIFICATION OR TO EXAMINE THE CONCERNED AUDITOR TO FIND OUT THE FACTS RELATING TO THE SAME. THE OMISSION , IN ANY, TO MENTION THE DATE IN THE AUDIT REPORT MAY BE AN INADVERTENT OMISSI ON OR LAXITY ON THE PART OF THE AUDITOR AND , IN OUR VIEW, THE SAME CANNOT BE USED TO TAKE ADVERSE VIEW AGAINST THE ASSESSEE . ON THE CONTRARY, THE RELEVANT DETAILS WERE GIVEN BY THE ASSESSEE IN THE RETURN OF INCOME FILED BY HIM U/S 139(4) OF THE ACT. UNDER THESE SET OF FACTS, WE ARE OF THE VIEW THAT THERE IS NO MATERIAL TO SUPPORT THE PRESUMPTION ENTERTAINED BY THE TAX AUTHORITIES THAT THE ASSESSEE DID NOT OBTAIN AUDIT REPORT WITHIN DUE DATE PRESCRIBED IN SECTION 44AB OF THE ACT. ACCORDINGLY, WE DO NOT AGR EE WITH THE CONCLUSION REACHED BY LEARNED CIT(A). ACCORDINGLY, WE SET ASIDE THE ORDER OF LEARNED CIT(A) AND DIRECT THE ASSESSING OFFICER TO DELETE THE PENALTY LEVIED U/S. 271B OF THE ACT FOR THE YEAR UNDER CONSIDERATION. 5. IN THE RESULT , APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER HAS BEEN PRONOU NCED IN THE OPEN COURT ON 8 .6 .2016 . SD/ - SD/ - (RAMLAL NEGI ) (B.R.BASKARAN ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED : 8 / 6/ 20 1 6 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) ITAT, MUMBAI PS