Shri Pawan Agrawal, Bhopal V. The ITO, Bhopal

ITA 395/IND/2009

• Counselvise Citation: [2009] 115 COUNSELVISE.COM (IT) 0083 (ITAT-INDORE)
• Duration Of Justice: 1 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-09-2009
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 14-09-2009
• Assessment Year: 2007-2008
• Appeal Filed On: 30-07-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA KARANADDL
• Assessee Lawyers: SANDEEP MUKHERJEE
• Keywords: Reasonable cause; Revised return
• Section: 142(1); 251; 139(1); 139(4)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL INDORE (S.M.C.-I) BENCH : INDORE BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER PAN NO. :AAUPA6756F I.T.A.NO. 395/IND/2009 A.Y. : 2007-08 SHRI PAWAN AGRAWAL, ITO, SANDEEP MUKHERJEE & ASSOCIATES, VS. BHOPAL B-62, KASTURBA NAGAR, BHOPAL APPELLANT BY : SHRI SANDEEP MUKHERJEE, C. A. RESPONDENT BY : SMT.APARNA KARAN,ADDL. CIT DR O R D E R THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF LD. CIT(A) I, BHOPAL, DATED 6 TH MAY,2009, FOR THE ASSESSMENT YEAR 2007-08, CHALLEN GING THE LEVY OF PENALTY U/S 271-B OF THE INCOME-TAX ACT , 1961. - 2 - 2 2. IT WAS SUBMITTED BEFORE THE CIT(A) THAT DURING THE RELEVANT ASSESSMENT YEAR, NEW FORM FOR FILING OF THE INCOME TAX RETURN WAS INTRODUCED AND THE ASSESSEE WAS REQUIRED TO FILE HIS RETURN OF INCOME IN FORM ITR-4. THIS FORM WAS VERY DETAILED, COMPLEX AND DIFFICULT TO FILL CORRECTLY AND COMPLETELY. THE ASSESSEE SOUGHT HELP OF SOFTWARE FO R DOING THE NEEDFUL. HOWEVER, THE DATE OF OBTAINING THE AUDIT REPORT SKI PPED TO BE MENTIONED IN THE RETURN. WHEN THIS ERROR WAS NOTICED, THE ASSESS EE IMMEDIATELY FILED THE REVISED RETURN ON 31 ST JULY, 2008. THE A.O., THEREAFTER, ISSUED A SHOW CA USE NOTICE TO THE ASSESSEE, BUT DUE TO SHIFTING OF THE RESIDENCE OF THE ASSESSEE, THE SAME COULD NOT BE SERVED ON TIME. THE A.O., ACCORDI NGLY, IMPOSED PENALTY U/S 271-B OF THE INCOME-TAX ACT, 1961, VIDE ORDER D ATED 28 TH OCTOBER, 2008, BECAUSE NO DETAILS WERE FURNISHED IN THE RETURN REG ARDING COMPLETION OF THE AUDIT AND FILING OF THE AUDIT REPORT AS REQUIRED U/ S 44AB OF THE INCOME-TAX ACT, 1961. IT WAS SUBMITTED BEFORE THE LD. CIT(A) T HAT THE ASSESSEE FILED REPLY TO THE SHOW CAUSE NOTICE BEFORE THE A.O. BEFO RE PASSING OF THE PENALTY ORDER, BUT IT WAS NOT CONSIDERED BY THE ASSESSING O FFICER AND THAT THERE WAS REASONABLE CAUSE FOR FAILURE TO COMPLY WITH THE PRO VISIONS OF LAW AS EXPLAINED ABOVE. HOWEVER, THE LD. CIT(A) CONFIRMED THE PENALTY. - 3 - 3 3. THE LEARNED COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE AUTHORITIES BELOW AND REFERRED TO S EVERAL DECISIONS IN SUPPORT OF THE CONTENTION THAT THERE WAS A REASONAB LE CAUSE FOR FAILURE TO COMPLY WITH THE PROVISIONS OF LAW. ON THE OTHER HAN D, THE LD. DEPARTMENTAL REPRESENTATIVE RELIED UPON THE ORDERS OF THE AUTHOR ITIES BELOW AND SUBMITTED THAT NO DETAILS WERE FILED IN THE RETURN EVEN TO EX PLAIN THAT THE AUDIT WAS COMPLETED. THE LD. DEPARTMENTAL REPRESENTATIVE SUBM ITTED THAT ITR-4 FORM WAS NOT SO COMPLICATED THAT THE ASSESSEE COULD NOT HAVE FILED THE DETAILS OF THE AUDIT REPORT IN THE PRESCRIBED FORM. THEREFORE, THE PENALTY WAS RIGHTLY IMPOSED AGAINST THE ASSESSEE. 4. I HAVE HEARD THE LD. REPRESENTATIVES OF BOTH THE PA RTIES, PERUSED THE FINDINGS OF THE AUTHORITIES BELOW AND MATERIAL AVAI LABLE ON RECORD. 5. THE ASSESSEE IN THE PAPER BOOK FILED REPLY DATED 26 TH SEPTEMBER,2008 ( P.B. 20 ) SHOWING THAT THE ASSESSE E FILED REPLY BEFORE THE A.O. AND REQUESTED FOR DROPPING THE PENALTY PROCEED INGS ON THE REASONS MENTIONED. THIS REPLY WAS NOT CONSIDERED BY THE ASS ESSING OFFICER. IT IS ALSO A FACT THAT THE ASSESSEE ON COMING TO KNOW THE DEFE CT IN THE RETURN OF INCOME IMMEDIATELY FILED REVISED RETURN PRIOR TO THE ISSUE OF THE SHOW CAUSE NOTICE - 4 - 4 FOR THE PENALTY GIVING THE COMPLETE DETAILS OF THE AUDIT AND THE AUDIT REPORT WAS ALSO FILED. THERE IS NOTHING ON RECORD TO SHOW THAT IF THE A.O. AT ALL ISSUED ANY DEFECT NOTICE TO THE ASSESSEE TO FILE TH E PARTICULARS OF AUDIT IN THE PRESCRIBED FORM. HONBLE RAJASTHAN HIGH COURT IN TH E CASE OF BAJRANG OIL MILLS VS. ITO, 295 ITR 314, OBSERVED THAT IT WAS TH E DUTY OF THE A.O. TO GIVE ASSESSEE AN OPPORTUNITY TO RECTIFY THE DEFECT FOR T HE FAILURE TO FILE AUDIT REPORT. IT WAS HELD THAT SINCE NO OPPORTUNITY TO RE CTIFY DEFECT WAS GIVEN AND THAT THE ASSESSEE CONTESTED LIABILITY TO FILE THE A UDIT REPORT, THEREFORE, THERE WAS A BONA FIDE BELIEF OF THE ASSESSEE THAT THE AUD IT WAS NOT NECESSARY. THEREFORE, PENALTY COULD NOT BE LEVIED. IN THE PRES ENT CASE, BEFORE THE A.O. COULD NOTICE ANY DEFECT IN THE RETURN OF INCOME, TH E ASSESSEE ADMITTEDLY RECTIFIED THE DEFECT AND FILED THE REVISED RETURN A LONGWITH THE PARTICULARS OF AUDIT. IT WAS ALSO SUBMITTED IN THE REPLY DATED 26. 9.2008 THAT THE AUDIT WAS DONE AND AUDIT REPORT WAS OBTAINED ON 14.9.2007. TH IS FACT IS NOT DISPUTED THROUGH ANY MATERIAL ON RECORD. IT, THEREFORE, STAN DS PROVED THAT THE ASSESSEE OBTAINED THE AUDIT REPORT BEFORE THE SPECIFIED DATE . HOWEVER, DUE TO PROBLEM WITH THE PERSON FILLING THE FORM I.E. ITR-4, THE DA TE OF OBTAINING THE REPORT SKIPPED TO BE MENTIONED IN THE RETURN, THEREFORE, S UCH A REASON WAS BEYOND - 5 - 5 THE CONTROL OF THE ASSESSEE. THE ASSESSEE, HOWEVER, BEFORE INITIATION OF THE PENALTY PROCEEDINGS RECTIFIED THE DEFECT BY FILING THE REVISED RETURN AND FILING THE PARTICULARS OF THE AUDIT REPORT. HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. S. S. BANGA, 279 ITR 107, HELD THAT THE REPORT FILED ALONGWITH BELATED RETURN AND SHOWING THAT THE AUDIT REPORT WAS OBTAINED BEFORE THE DUE DATE, PENALTY CANNOT BE LEVIED. HON BLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. ANAND KUMAR & COMPANY, 281 I TR 111, HELD THAT THE DELAY IN FILING OF THE AUDIT REPORT DUE TO ILLNESS AND SUBSEQUENT DEATH OF SENIOR PARTNER IS A REASONABLE CAUSE. PENALTY CANCE LLED. HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. JANTA SER VICE STATION, 251 ITR 347, HELD THAT AUDIT REPORT U/S 44AB OBTAINED BEFOR E THE SPECIFIED DATE BUT FILED WITH THE RETURN U/S 139(4) AND NOT U/S 139(1) AND NOT U/S 139(1). NO NOTICE WAS ISSUED U/S 142(1) ASKING THE ASSESSEE TO FILE THE RETURN. PENALTY NOT LEVIABLE. HONBLE PUNJAB & HARYANA HIGH COURT I N THE CASE OF CIT VS. ASHOK DAIRY, 279 ITR 32, HELD THAT WHEN THE ASSESSE E EXPLAINED THAT THE DELAY IN FILING OF THE AUDIT REPORT OCCURRED DUE TO THE SERVICES LEFT BY THE ACCOUNTANT IS A REASONABLE CAUSE. PENALTY NOT JUSTI FIED. - 6 - 6 6. CONSIDERING THE FACTS AND CIRCUMSTANCES NOTED ABOVE , WE ARE OF THE VIEW THAT THE ASSESSEE HAS A REASONABLE CAUSE FOR F AILURE TO FILE THE DETAILS OF AUDIT REPORT IN THE RETURN AT THE INITIAL STAGE, BE CAUSE THE FORM WAS NEW ONE AND THE PERSON, WHO COMPLETED THE PARTICULARS IN TH E SOFTWARE COULD NOT MENTION THE DETAILS OF THE AUDIT REPORT. THE DEFECT WAS RECTIFIED BY THE ASSESSEE SUO MOTU. THEREFORE, I AM OF THE VIEW THAT IT IS NOT A FIT CASE FOR LEVY OF PENALTY. I, ACCORDINGLY, SET-ASIDE THE ORDE RS OF THE AUTHORITIES BELOW AND CANCEL THE PENALTY. 7. AS A RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 17 TH SEPTEMBER, 2009. SD/- BHAVNESH SAINI JUDICIAL MEMBER DATED :17 TH _SEPTEMBER, 2009. CPU* 149