Abdul Amzad Ali Khan, Khurda V. I, Khurda

ITA 40/CTK/2015

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 7239 (ITAT-CUTTACK)
• Duration Of Justice: 1 year(s) 11 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 03-01-2017
• Assessment Year: 2009-2010
• Appeal Filed On: 20-01-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: D K PRADHAN
• Assessee Lawyers: S K AGARWAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CUTTACK SMC BENCH, CUTTACK BEFORE SHRI N.S SAINI, ACCOUNTANT MEMBER ITA NO. 40/CTK/2015 ASSESSMENT YEAR : 2009 - 2010 ABDUL AMZAD ALI KHAN, PROP. MILAN FINANCIAL SERVICES, AT: KUSUPALA, PO: BEGUNIA, DIST: KHURDA. VS. ITO, KHURDA WARD, SRIRAM NAGAR, KHURDA PAN/GIR NO. AMLPK 1554 G (APPELLANT ) .. ( RESPONDENT ) ASSESSEE BY : SHRI S.K.AGARWAL, AR REVENUE BY : SHRI D.K.PRADHAN, DR DATE OF HEARING : 03 /01/ 2017 DATE OF PRONOUNCEMENT : 0 3 /01/ 2017 O R D E R THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) - 1, BHUBANESWAR , DATED 29.10.2014, FOR THE ASSESSMENT YEAR 2009 - 2010. 2. THE SOLE ISSUE INVOLVED IN THIS APPEAL IS THAT THE LD CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN IMPOSING PENALTY UNDER SECTION 271B OF THE I.T.ACT, 1961 FOR RS.27,500/ - . 2 ITA NO. 40/CTK/2015 ASSESSMENT YEAR : 2009 - 2010 3. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE ORDERS OF LOWER AUTHORITIES AND MATERIALS AVAILABLE ON RECORD. IN THE INSTANT CASE, THE ASSESSEE FILED THE RETURN OF INCOME ON 30.9.2009 SHOWING INCOME OF RS.1,53,850/ - . THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE WAS REQUIRED TO GET THE ACCOUNT AUDITED U/S.44AB AND FURNISH THE SAME TO THE DEPARTMENT. THE RETURN WAS FILED WITHOUT AUDIT REPORT FOR WHICH THE ASSESSING OFF ICER ISSUED A LETTER DATED 29.4.2010 CALLING FOR FURNISHING OF A COPY OF THE AUDIT REPORT BY 7.5.2010. THE ASSESSEE DID NOT FILE THE AUDIT REPORT AND, THEREFORE, HE INITIATED THE PENALTY PROCEEDINGS U/S.271B OF THE ACT AND LEVIED PENALTY OF RS.27, 500/ - @ 0.5% OF THE GROSS RECEIPTS. 4. ON APPEAL BEFORE THE LD CI(A), THE ASSESSEE SUBMITTED THAT THE RETURN OF INCOME WAS REQUIRED TO BE FILED IN ITR - 4, WHEREAS BY MISTAKE THE ASSESSEE FILED THE RETURN OF INCOME IN ITR - 2. SINCE THE ITR - 2 DOES NOT HAVE SPACE TO ME NTION REGARDING THE AUDIT REPORT U/S.44AB , THE ASSESSING OFFICER PRESUMED THAT NO AUDIT HAS BEEN DONE U/S.44AB OF THE ACT BEFORE THE SPECIFIED DATE WHEREAS THE AUDIT HAS BEEN DONE ON 21.9.2009 I.E. BEFORE THE SPECIFIED D ATE. IT WAS SUBMITTED THAT WHI LE FI LING THE RETURN OF INCOME, THE ASSESSEE WAS NOT REQUIRED TO FURNISH ANY ANNEXURE INCLUDING THE AUDIT REPORT. 5. THE LD CIT(A) AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, OBSERVED THAT THE ASSESSEE SHOULD HAVE FILED THE AUDIT REPORT BY 7.5.2010 BEFOR E THE ASSESSING OFFICER AS REQUIRED BY THE ASSESSING OFFICER. HOWEVER, 3 ITA NO. 40/CTK/2015 ASSESSMENT YEAR : 2009 - 2010 THE ASSESSEE DID NOT COMPLY WITH THE REQUEST AND WHEN THE PENALTY NOTICE WAS ISSUED REFUSED TO RECEIVE THE NOTICE SENT BY RPAD. SUBSEQUENTLY, THE ASSESSEE SOUGHT 14 TO 15 DAYS MORE TI ME TO SUBMIT THE AUDIT REPORT. THIS SHOWS THAT THE AUDIT WAS NOT DONE WHEN THE ASSESSEE SOUGHT MORE TIME TO PRODUCE THE SAME WHICH IS MUCH AFTER THE SPECIFIED DATE. THIS CLEARLY SHOWS THAT THE AUDIT REPORT U/S.44AB HAS BEEN BACK DATED AND NOT PREPARED BY THE SPECIFIED DATE. HE FURTHER OBSERVED THAT THE ASSESSEE WAS NOT ONLY REQUIRED TO GET THE ACCOUNTS AUDITED BUT FURNISH THE SAME WITHIN THE SPECIFIED DATE. THE ASSESSEE FAILED TO FURNISH THE AUDIT REPORT EVEN BY 15.5.2010, WHICH IS MUCH AFTER THE SPECIF IED DATE WHEN THE ASSESSEE ASKED FOR MORE TIME. THEREFORE, HE HELD THAT THE ASSESSING OFFICER IS JUSTIFIED TO CONCLUDE THAT THE ASSESSEE HAS FAILED TO GET THE ACCOUNTS AUDITED AND FURNISHED THE SAME BY THE SPECIFIED DATE AND IN LEVYING THE PENALTY. 6. BEFORE ME, LD A.R. OF THE ASSESSEE FILED A COPY OF THE AUDIT REPORT DATED 21.9.2009 AND REITERATED THE SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER AS WELL AS LD CIT(A). 7. ON THE OTHER HAND, LD D.R. SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 8. I FIND TH E EXPLANATION OF THE ASSESSEE IS A PLAUSIBLE ONE THAT THE ASSESSEE BY MISTAKE FILED HIS RETURN OF INCOME IN ITR - 2 WHEREAS IT WAS REQUIRED TO FILE THE RETURN OF INCOME IN ITR - 4. AS THERE WAS NO COLUMN PROVIDED IN ITR - 2 TO 4 ITA NO. 40/CTK/2015 ASSESSMENT YEAR : 2009 - 2010 MENTION REGARDING THE AUDIT REPORT U/S.44AB, THE SAME COULD NOT BE MENTIONED BY THE ASSESSEE. LD A.R. SUBMITTED THAT THROUG HOUT THE SUBMISSION BEFORE THE ASSESSING OFFICER AS WELL AS LD CIT(A) AND ALSO BEFORE THE TRIBUNAL IS THAT THE AUDIT REPORT WAS OBTAINED ON 21.9.2009 AND THIS FACT CO ULD NOT BE REPORTED IN THE RETURN OF INCOME BY THE ASSESSEE IN ITR - 2 IN PLACE OF ITR - 4. BEFORE ME, LD A.R. OF THE ASSESSEE HAS FILED THE COPY OF AUDIT REPORT U/S.44A B OF THE ACT OF THE ASSESSEE FOR THE ASSESSMENT YEAR 2009 - 2010. IN VIEW OF ABOVE FACTS OF THE CASE AND ALSO KEEPING IN VIEW THE FACT THAT THE ASSESSMENT OF THE ASSESSEE WAS MADE AT THE RETURNED INCOME OF THE ASSESSEE AT RS.2,43,900/ - , THE DEFAULT COMMITTED BY THE ASSESSEE WAS ONLY A TECHNICAL OR VENIAL BREACH OF LAW IN NOT SUBMITTING THE PARTI CULARS OF AUDIT REPORT IN THE RETURN OF INCOME FILED BY THE ASSESSEE AND, THEREFORE, THE ASSESSEE IS NOT EXIGIBLE TO PENALTY U/S.271B OF THE ACT. MY ABOVE VIEW FINDS SUPPORT FROM THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. VS. STATE OF ORISSA (1972) 83 ITR 26 (SC) WHEREBY HON'BLE APEX COURT HAS HELD AS UNDER: - 'EVEN IF A MINIMUM PENALTY IS PRESCRIBED, THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY WHEN THERE IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WERE THE BREACH FLOWS FROM A BONA FIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE.' 5 ITA NO. 40/CTK/2015 ASSESSMENT YEAR : 2009 - 2010 9 . HENCE, I DELETE THE LEV Y OF PENALTY U/S.271B OF THE ACT OF RS.27,500/ - AND ALLOW THE GROUND OF APPEAL OF THE ASSESSEE. 10. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCE D IN THE OPEN COURT ON 03 /01/2017 IN THE PRESENCE OF PARTIES. SD/ - ( N.S SAINI) A CCOUNTANT MEMBER CUTTACK; DATED 03 /01 /2017 B.K.PARIDA, SPS COPY OF THE ORDER FORWARDED TO : BY ORDER, ASST.REGISTRAR, ITAT, C U TTACK 1. THE APPELLANT : ABDUL AMZAD ALI KHAN, PROP. MILAN FINANCIAL SERVICES, AT: KUSUPALA, PO: BEGUNIA, DIST: KHURDA 2. THE RESPONDENT. ITO, KHURDA WARD, SRIRAM NAGAR, KHURDA 3. THE CIT(A) - 1, BHUBANESWAR 4. CIT , BHUBANESWAR. 5. DR, ITAT, CUTTACK 6. GUARD FILE. //TRUE COPY//