MUDASSIR RASHID AHMED BAKHLA, MUMBAI V. ITO 17(2)(3), MUMBAI

ITA 4130/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 3007 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2013-2014
• Appeal Filed On: 11-06-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JYOTHILAKSHMI NAYAK
• Section: 273B; 139(1); 271B; 44AB; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER ITA NO. 4130 / MUM . /201 8 ( ASSESSMENT YEAR : 20 13 14 ) MUDASSIR RASHID AHMED BAKHLA MAKKER & CO., SHOP NO.7B SHAMJI MORRJI BUILDING CHAMPSI BHUMJI ROAD MAZGAON, MUMBAI 400 010 PAN AELPB9504K . APPELLANT V/S INCOME TAX OFFICER WARD 17(2)(3), MUMBAI . RESPONDENT ASSESSEE BY : MS. NEHA PARANJPE REVENUE BY : SMT. JYOTHILAKSHMI NAYAK DATE OF HEARING 05 . 03 .20 20 DATE OF ORDER 13.03.2020 O R D E R PER SAKTIJIT DEY. J.M. THE CAPTIONED APPEAL HAS BE EN FILED BY THE ASSESSEE CHALLE NG ING THE ORDER DATED 28 TH MARCH 2018, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 58, MUMBAI, CONFIRMING PENALTY OF ` 1,50,000 IMPOSED UNDER SECTION 271B OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ). 2 MUDASSIR RASHID AHMED BAKHLA 2. BRIEF FACTS ARE, IN THE C OURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER NOTICED THAT , THOUGH , THE ASSESSEE IS REQU IRED TO GET HIS ACCOUNT S AUDITED UNDER SECTI ON 44AB OF THE ACT AND FURNISH THE AUDIT REPORT ELECTRONICALLY BEFORE THE DUE DATE OF RETURN OF INCOME AS PER SECTION 139(1) OF THE ACT. HOWEVER, THE ASSESSEE HAS FAILED TO DO SO. THE REFORE, HE INITIATED PROCEEDI NG FOR IMPOSITION OF PENALTY UNDER SECTION 271B OF THE ACT FOR NON FURNISHING THE AUDIT REPORT. AFTER ISSUING A SHOW CAUSE NOTICE AND EXAMINING THE EXPLANATION OF THE ASSESSEE, THE ASSESSING OFFICER ULTIMATELY PASSED AN ORDER ON 11 TH FEBRUARY 2015, IMPOSING PENALTY OF ` 1,50,000, UNDER SECTION 271B OF THE ACT. THOUGH, THE ASSESSEE CHALLENGED THE IMPOSITION OF PENALTY BEFORE THE FIRST APPELLATE AUTHORITY, HOWEVER, THE PENALTY IMPOSED WAS UPHELD. THE LEARNED AUTHORISED REPRESENTATIVE SU BMITTED , IN THE ASSESSMENT YEAR UNDER CONSIDERATION, FOR THE FIRST TIME, THE CBDT HAS ISSUED NOTIFICATION BEARING NO.36, DATED 23 RD MAY 2013, AND NOTIFICATION NO.44, DATED 19 TH JUNE 2013, REQUIRING FILING OF TAX AUDIT REPORT ONLINE. SHE SUBMITTED , DUE TO L ATE ISSUANCE OF SUCH NOTIFICATIONS AND UNAWARENESS, MANY ASSESSEES COULD NOT FILE THE TAX AUDIT REPORT ELECTRONICALLY. CONSIDERING THE DIFFICULTIES FACED BY THE ASSESSEES, THE BOARD ISSUED FURTHER CLARIFICATION STATING THAT IN CASE OF DIFFICULTY IN FILING THE AUDIT REPORT ELECTRONICALLY, SUCH REPORT MAY ALSO BE FURNISHED MANUALLY BEFORE THE JURISDICTIONAL ASSESSING OFFICER. SHE SUBMITTED , THOUGH , THE ASSESSEE HAS OBTAINED THE AUDIT REPORT SIGNED BY THE 3 MUDASSIR RASHID AHMED BAKHLA AUDITORS ON 10 TH SEPTEMBER 2013, MUCH BEFORE THE DUE DA TE OF FILING OF RETURN OF INCOME, HOWEVER, KEEPING IN VIEW THE EXPRESSION MAY USED IN THE CLARIFICATION, THE ASSESSEE THOUGH T THAT MANUAL FILING OF TAX AUDIT REPORT IS NOT MANDATORY AND ACCORDINGLY SUBMITTED SUCH REPORT DURING THE ASSESSMENT PROCEEDINGS. THUS, S HE SUBMITTED , THE LAPSE ON THE PART OF THE ASSESSEE , IF ANY, BEING NOT DELIBERATE AND DUE TO BONA FIDE REASON S , NO PENALTY SHOULD BE IMPOSED UNDER SECTION 271B OF THE ACT. 3. STRONGLY SUPPORTING THE IMPOSITION OF PENALTY, LEARNED DEPARTMENTAL REPRESEN TATIVE SUBMITTED , EVEN ACCEPTING THE CLAIM OF THE ASSESSEE THAT FILING TAX AUDIT REPORT ONLINE HAS COME FOR THE FIRST TIME AND THE ASSESSEES WERE FACING DIFFICULT Y FILING THEM ONLINE , STILL THE ASSESSEE SHOULD HAVE FILED THE TAX AUDIT REPORT MANUALLY WITHI N THE DUE DATE. SHE SUBMITTED , IN TH E COURSE OF PENALTY PROCEEDINGS THE ASSESSEE HAS ALSO ACCEPTED THE DEFAULT AND HAS MERELY STATED THAT NON FILING OF THE TAX AUDIT REPORT WAS DUE TO INADVERTENCE. THUS, S HE SUBMITTED , THERE IS A CLEAR DEFAULT ON THE PART OF THE ASSESSEE IN COMPLYING WITH THE PROVIS IONS OF SECTION 44AB OF THE ACT. THEREFORE, PENALTY IMPOSED IS JUSTIFIED. 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. AS COULD BE SEEN FROM THE FACTS ON RECORD, BY VIRTUE OF NOTIFICATIONS ISSUED BY THE CBDT IN MAY AN D JUNE 2013, FOR THE FIRST TIME THE BOARD MAD E IT MANDATORY FOR ONLINE FILING OF TAX AUDIT REPORT 4 MUDASSIR RASHID AHMED BAKHLA UNDER SECTION 44AB OF THE ACT WITHIN THE DUE DATE OF FILING OF RETURN OF INCOME. HOWEVER, SINCE THE RULE WAS IMPLEME NTED FOR THE FIRST TIME AND THE ASSESSEES WERE FACING DIFFICULTY IN FILING THE TAX AUDIT REPORT ELECTRONICALLY, T HE BOARD AGAIN CLARIFIED THAT ASSESSEE S MAY FILE SUCH TAX AUDIT REPORT MANUALLY. IN THE FACTS OF THE PRESENT CASE, UNDISPUTEDLY, THE ASSESSEE H AS OBTAINED THE TAX AUDIT REPORT ON 10 TH SEPTEMBER 2013, I.E., MUCH BEFORE THE DUE DAT E OF FILING OF RETURN OF INCOME. H OWEVER, AS STATED BY THE ASSESSEE, DUE TO LACK OF CLARITY AND MISINTERPRETATION OF THE CIRCULAR ISSUED BY THE BOARD , THE ASSESSEE DID NO T FILED TAX AUDIT REPORT BEFORE THE DUE DATE OF RETURN OF INCOME. IN OUR VIEW, THE AFORESAID EXPLANATION FURNISHED BY THE ASSESSEE APPEARS TO BE PLAUSIBLE, THEREFORE, BENEFIT OF DOUBT CAN BE GIVEN TO THE ASSESSEE. A READING OF SECTION 273B OF THE ACT MAKES IT CLEAR THAT IMPOSITION OF PENALTY UNDER SECTION 271B OF THE ACT IS NEITHER MANDATORY NOR AUTOMATIC. IF THE ASSESSEE SATISFACTORILY EXPL AINS THE FAILURE IN COMPLYING WITH THE STATUTORY PROVISIONS, NO PENALTY IS TO BE IMPOSED. IN THE PRESENT CASE, WE ARE OF THE VIEW THAT THE FAILURE ON THE PART OF THE ASSESSEE IN FILING THE TAX AUDIT REPORT WITHIN THE DUE DATE IS DUE TO BONA FIDE REASON S . THEREFORE, WE ARE INCLINED TO DELETE THE PENALTY IMPOSED OF ` 1,50,000 UNDER SECTION 271B OF THE ACT . GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED. 5 MUDASSIR RASHID AHMED BAKHLA 5. IN THE RESULT, APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN C OURT ON 13.03.2020 SD/ - N.K. PRADHAN ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 13.03.2020 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI