THE GOLD KING EXPORTS, TIRUPUR V. ITO, WARD-2(1), TIRUPUR

ITA 3492/CHNY/2018

• Counselvise Citation: [2019] 115 COUNSELVISE.COM (IT) 3466 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-11-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 24-12-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause
• Section: 143(2)

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B BENCH, CHENNAI . . . , , BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO.3492/CHNY/2018 [ [ /ASSESSMENT YEAR: 2015-16 M/S. THE GOLD KING EXPORTS, NO.1, VAIKKAL THOTTAM, PALLADAM ROAD, TIRUPUR 641 604. VS. THE INCOME TAX OFFICER, WARD 2(1), TIRUPUR. PAN: AABFT6732B ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : SHRI ARJUNRAJ, CA /RESPONDENT BY : SHRI G.D. JAYANTHI ANGAYARKANNI, JCIT /DATE OF HEARING : 22.08.2019 /DATE OF PRONOUNCEMENT : 08.11.2019 / O R D E R PER SHRI S. JAYARAMAN, ACCOUNTANT MEMBER : THE ASSESSEE FILED THIS APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS)-3, COIMBATORE IN APPEAL NO.295/17-18 DATED 28.11.2018 FOR THE ASSESSMENT YEAR 2015-16 IN WHICH THE LD.CIT(A) SUSTAINED THE PENALTY LEVIED U/S.271B OF THE ACT. ITA NO.3492/CHNY/2018 :- 2 -: 2. M/S. THE GOLD KING EXPORTS, THE ASSESSEE FILED ITS RETURN FOR THE ASSESSMENT YEAR 2015-16 ON 14.102.106 ADMITTING A LOSS OF RS.67,97,660/-. ON VERIFICATION, THE ASSESSING OFFICER FOUND THAT THE TURNOVER REPORTED BY THE ASSESSEE WAS AT RS.2,54,66,791/-. HOWEVER, THE ASSESSEE FAILED TO SUBMIT AUDIT REPORT AS REQUIRED U/S.44AB WITHIN THE STATUTORY TIME ALLOWED I.E., 30.09.2015 BUT FILED IT ON 14.10.2016 ONLY. SINCE, THERE WAS A FAILURE ON THE PART OF THE ASSESSEE, THE ASSESSING OFFICER INITIATED PENALTY PROCEEDINGS U/S.271B AND LEVIED THE PENALTY. AGGRIEVED AGAINST THAT ORDER, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A). THE LD.CIT(A) SUSTAINED THE LEVY OF PENALTY. AGAINST THAT ORDER, THE ASSESSEE FILED THIS APPEAL. 3. THE LD.AR PLEADED THAT THE AUDIT REPORT WAS SIGNED ON 31.10.2015. THE ASSESSEE FILED VOLUNTARILY THE RETURN OF INCOME ADMITTING A LOSS OF RS.67,97,660/- ON 14.10.2016 ALONG WITH AUDIT REPORT U/S.44AB. THE DELAY IN FILING WAS BECAUSE OF THE MISTAKE OF THE ACCOUNTANT WHO WAS ENTRUSTED WITH THE WORK OF TAKING CARE OF THE TAX MATTERS WHO HAS LEFT SERVICE WITHOUT DUE INFORMATION. THE PARTNER MRS. SRILATHA WAS ALSO SUFFERING FROM CHICKEN KUNIYA FEVER DUE TO WHICH SHE WAS IMMOBILIZED EVEN AFTER RECOVER FROM FEVER. THE COMPANY HAS INCURRED HUGE LOSS OF RS.17,04,144/- IN THE ASSESSMENT YEAR 2014-15 ITA NO.3492/CHNY/2018 :- 3 -: AND DURING THE YEAR THE LOSS OF RS.67,97,660/-. BECAUSE OF CONTINUOUS LOSSES YEAR AFTER YEAR THERE WAS ALSO MISUNDERSTANDING AMONG THE PARTNERS. NO NOTICE U/S.142(1) OR 143(2) OR 148 WAS ISSUED. THE ASSESSING OFFICER ISSUED THE SHOW CAUSE NOTICE FOR LEVY OF PENALTY, FOR THE REASON THAT THE ASSESSEE FAILED TO GET ITS ACCOUNTS AUDITED WITHIN THE SPECIFIED DATE, I.E., HOWEVER HE LEVIED THE PENALTY FOR NOT SUBMITTING THE AUDIT REPORT WITHIN TIME. THE LD.CIT(A) WITHOUT APPRECIATING THE FACTS AND CIRCUMSTANCES SUSTAINED THE LEVY OF PENALTY AND HENCE PLEADED TO ALLOW THE APPEAL. 4. PER CONTRA, THE LD.DR SUBMITTED THAT THE ASSESSEE WITHOUT REASONABLE CAUSE FAILED TO COMPLY WITH THE PROVISIONS OF THE ACT AND HENCE, THE LEVY MADE BY THE ASSESSING OFFICER AND SUSTAINED BY THE LOWER AUTHORITIES MAY BE UPHELD. 5. WE HEARD THE RIVAL SUBMISSIONS AND GONE THROUGH THE RELEVANT MATERIAL. DUE TO UNAVOIDABLE CIRCUMSTANCES, THE ASSESSEE FILED ITS RETURN BELATEDLY ON 14.10.2016 ALONG WITH AUDIT REPORT DATED 31.10.2015. IT IS NOT THE CASE OF THE ASSESSING OFFICER THAT THE AUDIT WAS NOT CONCLUDED AS ON 31.10.2015 NOR THE ACCOUNTS OF THE ASSESSEE WAS NOT RELIABLE ETC. IN THE FACTS AND CIRCUMSTANCES, WE ARE OF THE ITA NO.3492/CHNY/2018 :- 4 -: VIEW THAT THE LEVY OF PENALTY FOR A VENIAL BREACH IS UNWARRANTED AND HENCE WE DELETE THE IMPUGNED PENALTY AND ALLOW THE ASSESSEES APPEAL. 6. IN THE RESULT, THE ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE COURT ON 8 TH NOVEMBER, 2019 IN CHENNAI. SD/- SD/- /CHENNAI, /DATED 8 TH NOVEMBER, 2019 RSR /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. ( ) /CIT(A) 4. /CIT 5. /DR 6. /GF ( . . . ) (N.R.S. GANESAN) / JUDICIAL MEMBER ( ) (S. JAYARAMAN) /ACCOUNTANT MEMBER