Supreme agencies, Malappuram V. ITo, Tirur

ITA 443/COCH/2010

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 7818 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 9 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-05-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-04-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 19-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV
• Assessee Lawyers: A MURALEEDHARAN
• Keywords: Reasonable cause
• Section: 273B

Judgement Text

1 ITA NO.443/COCH/2010 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKA RAN(AM) I.T.A NO. 443/COCH/2010 (ASSESSMENT YEAR 2006-07) M/S SUPREME AGENCIES VS ITO, WD.1 MAIN ROAD, KOTTAKKAL TIRUR MALAPPURAM DIST PAN : AARFS5604B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI A MURALEEDHARAN RESPONDENT BY : SHRI ABHIMANYU SINGH YADAV DATE OF HEARING : 24-04-2012 DATE OF PRONOUNCEMENT : 09-05-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-I, CALICUT DATED 23-06-2010 FO R THE ASSESSMENT YEAR 2006-07 CONFIRMING THE LEVY OF PENALTY U/S 271B OF THE ACT. 2. SHRI A MURALEEDHARAN, THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE WAS REQUIRED TO OBTAIN THE AUDIT REPORT FO R THE YEAR UNDER CONSIDERATION ON OR BEFORE 31-10-2006. HOWEVER, DUE TO INCONVENIENCE O F THE ACCOUNTANT, THE ASSESSEE COULD NOT GET THE AUDIT REPORT WITHIN THE PRESCRIBE D TIME. ACCORDING TO THE LD.REPRESENTATIVE, THE SON OF THE ACCOUNTANT WAS IL L AND EVENTUALLY DIED WHICH AFFECTED THE FINALIZATION OF THE ACCOUNTS. ACCORDING TO THE LD.REPRESENTATIVE, THIS WAS DUE TO THE CIRCUMSTANCE BEYOND THE CONTROL OF THE ASSESSEE. H OWEVER, THE ASSESSEE OBTAINED THE 2 ITA NO.443/COCH/2010 AUDIT REPORT ON 25-05-2007 AND THE SAME WAS FILED A LONG WITH THE RETURN OF INCOME ON 29-06-2007. THEREFORE, ACCORDING TO THE LD.REPRESE NTATIVE, THERE WAS A REASONABLE CAUSE IN NOT GETTING THE AUDIT REPORT WITHIN THE TI ME PRESCRIBED. THE LD.REPRESENTATIVE PLACED HIS RELIANCE ON THE DECISION OF THIS TRIBUNA L IN KARTHIKA ENTREPRENUERS VS ITO (1993) 45 ITD 70 (COCH). 3. ON THE CONTRARY, SHRI ABHIMANYU SINGH YADAV, THE LD.DR SUBMITTED THAT THERE WAS NO REASONABLE CAUSE FOR NOT GETTING THE AUDIT R EPORT WITHIN THE PRESCRIBED PERIOD. ACCORDING TO THE LD.DR, THE ILLNESS OF THE SON OF T HE ACCOUNTANT CANNOT BE A REASON FOR NOT GETTING THE AUDIT REPORT IN TIME. 4. WE HAVE CONSIDERED THE SUBMISSIONS ON EITHER SID E AND ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACT THAT THE SO N OF THE ACCOUNTANT WAS ILL AND SUBSEQUENTLY HE EXPIRED, IS NOT IN DISPUTE. THE ON LY CONTENTION OF THE LD.DR IS THAT THE ILLNESS OF THE SON OF THE ACCOUNTANT CANNOT BE A RE ASONABLE CAUSE FOR NOT GETTING THE AUDIT REPORT IN TIME. THIS TRIBUNAL IS OF THE OPIN ION THAT WHEN THE SON OF THE ACCOUNTANT WAS BEDRIDDEN AND EXPIRED SUBSEQUENTLY, HE CANNOT B E EXPECTED OF COMPLETING THE ACCOUNTS FOR THE SAKE OF GETTING IT AUDITED IN TIME . THEREFORE, THIS TRIBUNAL IS OF THE OPINION THAT THERE WAS A REASONABLE CAUSE WITHIN TH E MEANING OF SECTION 273B FOR NOT GETTING THE AUDIT REPORT WITHIN THE PRESCRIBED PERI OD. EVEN OTHERWISE, ADMITTEDLY, THE AUDIT REPORT WAS OBTAINED ON 25-05-2007 AND THE SAM E WAS FILED ALONG WITH THE RETURN OF INCOME ON 29-06-2007. THE INTENTION OF THE LEGI SLATURE REQUIRING THE ASSESSEE TO FILE THE AUDIT REPORT ALONG WITH THE RETURN OF INCOME IS TO ASSIST THE ASSESSING OFFICER IN COMPUTING THE CORRECT TAXABLE INCOME. WHEN THE RET URN OF INCOME WAS FILED ALONG WITH THE AUDIT REPORT THOUGH BELATEDLY, IN OUR OPINION, IT WILL NOT PREVENT THE ASSESSING OFFICER FROM COMPUTING CORRECT TAXABLE INCOME ON THE BASIS OF THE AUDIT REPORT. THEREFORE, FILING THE AUDIT REPORT ALONG WITH THE RETURN BELAT EDLY IS A SUFFICIENT COMPLIANCE AS REQUIRED UNDER THE STATUTORY PROVISION. THE INTENT ION OF THE LEGISLATURE IS TO REQUIRE THE ASSESSEE TO FILE THE AUDIT REPORT BEFORE COMPLETION OF THE ASSESSMENT. SINCE THIS WAS 3 ITA NO.443/COCH/2010 COMPLIED WITH, THIS TRIBUNAL IS OF THE OPINION THAT THIS IS NOT A FIT CASE OF LEVY OF PENALTY U/S 271B OF THE ACT. ACCORDINGLY THE ORDERS OF LOW ER AUTHORITIES ARE SET ASIDE AND THE PENALTY LEVIED U/S 271B IS DELETED. 5. IN THE RESULTED, THE APPEAL OF THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 09 TH DAY OF MAY, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 09 TH MAY, 2012 PK/- COPY TO: 1. M/S SUPREME AGENCIES, MAIN ROAD, KOTTAKKAL, MALAPPU RAM DIST 2. ITO, WD.1, TIRUR 3. THE COMMISSIONER OF INCOME-TAX(A)-I, CALICUT 4. THE COMMISSIONER OF INCOME-TAX, CALICUT 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH