M/s.Johns Biwheelers, Alappuzha V. The ACIT, Alappuzha

ITA 411/COCH/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3942 (ITAT-COCHIN)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 05-02-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 05-09-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A S BINDHU
• Keywords: Reasonable cause
• Section: 273B

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFOR E S/ SHRI CHANDRA POOJARI , AM & GEORGE GEORGE K., J M I .T . A. NO . 411 / COCH/ 20 1 8 ASSESSMENT YEAR : 2 0 13 - 14 M/S. JOHNS BIWHEELERS, THIRUMALA WARD, THATHAMPALLY P.O., ALAPPUZHA. [PAN:AADFJ 1350R] VS. THE ASSISTANT COMMISSIONER OF INCOME - TAX, CIRCLE - 1, ALAPPUZHA. (ASSESSEE - APPELLANT) (REVENUE - RESPONDENT) A SSESSEE BY SHRI R. SREENIVASAN, CA REVENUE BY SMT. A.S. BINDHU, SR. DR D ATE OF HEARING 05 / 0 2/ 201 9 DATE OF PRONOUNCEMENT 05 / 0 2 /201 9 O R D E R PER CHANDRA POOJARI , AM: THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE CIT(A) , KOTTAYAM DATED 06/08/2018 A ND PERTAINS TO ASSESSMENT YEAR 2013 - 14 . 2. THE ONLY ISSUE IN THIS APPEAL IS WITH REGARD TO LEVY OF PENALTY U/S. 271B OF THE ACT. 3. THE FACTS OF THE CASE ARE THAT THE GROSS RECEIPTS FROM BUSINESS OF THE ASSESSEE FOR THE RELEVANT ASSESSMENT YEAR WAS RS.74,59,70,875/ - AND THEREFORE, I.T.A. NO . 411 /COCH/ 201 8 2 WAS LIABLE TO GET ITS ACCOUNTS AUDITED AS PER THE PROVISIONS OF SE C TION 44AB OF THE ACT ON OR BEF ORE THE DUE DATE OF FILING OF RETURN OF INCOME, I.E. 30/09/2013. HOWEVER, THE ASSESSEE GOT ITS ACCOUNTS AUDITED ONLY ON 28/03/2014. THEREFORE, THERE WAS DELAY IN GETTING THE ACCOUNTS AUDITED AND PENALTY U/S. 271B WAS LEVIED FOR FAILURE TO COMPLY WITH THE PROVISIONS OF SECTION 44AB OF THE ACT SUBJECT TO PROVISIONS OF SECTION 273B OF THE ACT, I.E. REASONABLE CAUSE FOR THE DELAY. HENCE, THE ASSESSING OFFICER LEVIED PENALTY OF RS.1,50,000/ - U/S. 271B OF THE ACT. 4. ON APPEAL, THE CIT(A) CONFIRMED THE LEVY OF PENALTY U/S. 271B OF THE ACT. 5. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. THE LD. AR SUBMITTED THAT DUE TO VIRUS INFECTION IN THE COMPUTER SYSTEM, THE DATA GOT ERASED AND NO BACK UP DATE WAS MAINTAINED. THE LD. AR RELIED ON FOLLOWING DE CISIONS WHEREIN IT WAS HELD THAT FILING OF REPORT IS ONLY DIRECTORY AND NOT MANDATORY: A) CIT VS. MALAYALAM PLANTATIONS (103 ITR 835) B) ACIT VS. AMAR CHAND RAJ (89 ITD 96) C) PREM PRAKASH SENAPATI VS. ITO (ITAT, CUTTACK IN ITA 459 & 185/CTK/2017). IT WAS ALSO SUBMITTED THAT THERE WAS A REASONABLE CAUSE FOR THE DELAY WITHIN THE MEANING OF S.273B OF THE ACT. 6. THE LD. DR RELIED ON THE ORDER OF THE CIT(A). I.T.A. NO . 411 /COCH/ 201 8 3 7. W E HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. IN THIS CASE, THE ASSESSEE WAS REQUIRED TO GET HIS BOOKS OF ACCOUNT AUDITED AND FILED ALONG WITH THE RETURN OF INCOME U/S. 44AB WITH IN THE DUE DATE OF 30/09/201 3 FOR THE ASSESSMENT YEAR 2013 - 14 . HOWEVER, THE AUDIT REPORT WAS FURNISHED ONLY ON 2 8 /0 3 /2014. THE CONTENTION OF THE LD . AR WAS THAT THE DELAY IN FILING THE RETURN OF INCOME WAS DUE TO DAMAGE TO COMPUTER SYSTEM DUE TO VIRUS INFECTION WHICH IS A REASONABLE CAUSE AS PRESCRIBED U/S. 273B OF THE I.T. ACT. THE LD. AR RELIED ON THE FOLLOWING JUDGMENTS IN SUPPORT OF HIS CONTENTI ONS: I) CIT VS. MALAYALAM PLANTATIONS LTD. (1976) (103 ITR 835) (KER.) II) ACIT VS. AMAR CHAND RAJ KUMAR (2004) (89 ITD 96)(ITAT, CHANDIGARH) III) PREM PRAKASH SENAPATI VS. ITO (ITA NO.459&185/CTK/2017 DATED 17/04/2018) )(ITAT, CUTTACK). 7.1 FROM THE MATERIAL AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT THE ASSESSEE GOT HIS BOOKS OF ACCOUNTS AUDITED ON 2 8/03/ 2014 WHICH WAS MADE AVAILABLE T O THE ASSESSING OFFICER AND NO PREJUDICE HAS BEEN CAUSED TO THE REVENUE. NOW THE SHORT QUESTION THAT ARISES I S WHETHER IN THIS SCENARIO, PENALTY U/S. 271B OF THE ACT CAN BE LEVIED OR NOT. IN OUR CONSIDERED OPINION, THE ASSESSEE HAD ONLY COMMITTED TECHNICAL VENIAL BREACH WHICH DOES NOT CREAT E ANY LOSS TO THE EXCHEQUER AS THE AUDIT REPORT WAS AVAILABLE TO THE ASSE SSING OFFICER BEFORE THE COMPLETION OF THE ASSESSMENT PROCEEDINGS. THE MADRAS HIGH COURT IN THE CASE OF CIT VS. A.N. ARUNACHALAM (208 ITR 481) IN THE CONTEXT OF FILING OF AUDIT REPORT FOR CLAIMING DEDUCTION U/S. 80J OF THE ACT, OBSERVED THAT ONCE AUDIT I.T.A. NO . 411 /COCH/ 201 8 4 RE PORT HAS BEEN MADE AVAILABLE BEFORE THE LD. ASSESSING OFFICER BEFORE THE COMPLETION OF ASSESSMENT PROCEEDINGS, THE ASSESSEE SHOULD BE GRANTED DEDUCTION U/S. 80J OF THE ACT. WE OBSERVE THAT THIS JUDGMENT WAS RENDERED IN THE CONTEXT OF ADJUDICATION OF QUANTU M OF DEDUCTION CLAIMED BY THE ASSESSEE. HENCE, THE SAID ANALOGY CAN VERY WELL BE DRAWN AND USED IN THE PENALTY PROCEEDINGS LIKE THAT OF THE ASSESSEE. TO SUM UP, WE HOLD THAT THE ASSESSEE HAD COMMITTED ONLY TECHNICAL VENIAL BREACH FOR WHICH HE CANNOT BE PE NALIZED. IN VIEW OF THE ABOVE, WE ARE INCLINED TO DELETE THE PENALTY MADE BY THE ASSESSEE U/S. 271B OF THE ACT. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 5 TH FEBRUARY, 2019 SD/ - SD/ - (GEORGE GEORGE K.) (CHANDRA POOJARI) JUDICIAL MEMBER ACCOUNTANT MEMBER PLACE: KOCHI DATED: 5 TH F EBRUARY, 2019 GJ COPY TO: 1 . M/S. JOHNS BIWHEELERS, THIRUMALA WARD, THATHAMPALLY P.O., ALAPPUZHA. 2 . THE ASSISTANT COMMISSIONER OF INCOME - TAX, CIRCLE - 1, ALAPPUZHA. 3 . THE COMMISSIONER OF INCOME - TAX (AP P EALS) , KOTTAYAM . 4 . THE PR. COMMISSIONER OF INCOME - TAX , KOTTAYAM. 5. D. R., I.T.A.T., COCHIN BENCH, COCHIN. 6. GUARD FILE. BY ORDER (ASSISTANT R EGISTRAR) I.T.A.T., COCHIN I.T.A. NO . 411 /COCH/ 201 8 5