St.Francis De Sales Press, Cochin V. DCIT, Ernakulam

ITA 453/COCH/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 61501 (ITAT-COCHIN)
• Duration Of Justice: 1 year(s) 10 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 26-04-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 30-07-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV
• Assessee Lawyers: MOHANAN KUTTICKAT
• Keywords: Reasonable cause

Judgement Text

1 ITA NO. 453/COCH/2010 IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN BEFORE SHRI N.R.S. GANESAN (JM) AND SHRI B.R. BASKARA N(AM) I.TA NO. 453/COCH/2010 (ASSESSMENT YEAR 2005-06) ST. FRANCIS DE SALES PRESS VS THE DY.CIT, CIR.2( 2) BORADWAY, ERNAKULAM ERNAKULAM COCHIN-31 PAN : AALFS6263L (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI MOHANAN KUTTICKAT RESPONDENT BY : SHRI ABHIMANYU SINGH YADAV DATE OF HEARING : 26-04-2012 DATE OF PRONOUNCEMENT : 01-06-2012 O R D E R PER N.R.S. GANESAN (JM) THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST TH E ORDER OF COMMISSIONER OF INCOME-TAX(A)-II, KOCHI DATED 31-03-2010 CONFIRMING THE PENALTY LEVIED U/S 271B OF THE ACT. 2. SHRI MOHANAN KUTTICKAT, THE LD.REPRESENTATIVE FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE OBTAINED THE AUDIT REPORT ON 05-12 -2005 AND THE SAME WAS FILED ALONG WITH THE RETURN OF INCOME ON 02-01-2006. ACCORDING TO THE LD.REPRESENTATIVE, THERE WAS A DELAY OF ABOUT TWO M ONTHS IN FILING THE AUDIT REPORT. THE LD.REPRESENTATIVE SUBMITTED THAT THE R EASONS FOR DELAY IN FILING THE 2 ITA NO. 453/COCH/2010 RETURN WAS THAT THE MOTHER OF THE MANAGING PARTNER WAS SERIOUSLY ILL FOR ABOUT SIX MONTHS FROM JULY, 2005 AND SHE WAS HOSPITALISED. I N FACT, THE MOTHER OF THE MANAGING PARTNER DIED IN THE FIRST WEEK OF JANUARY, 2006. THEREFORE, THE ACCOUNTS COULD NOT BE FINALIZED. ACCORDING TO THE LD.REPRESENTATIVE, THERE WAS A REASONABLE CAUSE ON THE PART OF THE ASSESSEE IN NOT FILING THE AUDIT REPORT IN TIME. 3. ON THE CONTRARY, SHRI ABHIMANYU SINGH YADAV, THE LD.DR SUBMITTED THAT MERELY BECAUSE THE MANAGING PARTNERS MOTHER WAS NO T WELL, THAT CANNOT BE A REASON FOR NOT GETTING THE ACCOUNTS AUDITED. THE A SSESSEE WAS EXPECTED TO DISCHARGE ITS STATUTORY OBLIGATION WHEN THE TURNOVE R WAS SO VOLUMINOUS. THEREFORE, THE COMMISSIONER OF INCOME-TAX(A) HAS RIG HTLY CONFIRMED THE PENALTY. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE AND HAVE ALSO PERUSED THE MATERIAL AVAILABLE ON RECORD. IT IS NO T IN DISPUTE THAT THE MOTHER OF THE MANAGING PARTNER WAS NOT WELL AND IN FACT SHE D IED IN THE FIRST WEEK OF JANUARY, 2006. WHEN THE MOTHER OF THE MANAGING PAR TNER WAS SERIOUSLY ILL, HOSPITALIZED AND SUBSEQUENTLY DIED, NO ONE COULD EX PECT THE MANAGING PARTNER TO CONCENTRATE ON HIS BUSINESS AND TO GET THE BOOKS OF ACCOUNT AUDITED. THIS TRIBUNAL IS OF THE OPINION THAT THE ILLNESS OF THE MOTHER OF THE MANAGING PARTNER AND SUBSEQUENT DEATH WOULD DEFINITELY CONSTITUTE A SUFFICIENT CAUSE FOR NOT GETTING THE AUDIT REPORT IN TIME. IN FACT, THE AUD IT REPORT WAS OBTAINED ON 05-12- 2005 AND IT WAS FILED ALONG WITH THE RETURN OF INCO ME ON 02-01-2006. IT IS WELL SETTLED PRINCIPLES OF LAW THAT OBTAINING OF AUDIT R EPORT IS MANDATORY BUT FILING OF THE SAME IS DIRECTORY. IN OTHER WORDS, THE INTENTI ON OF THE LEGISLATURE REQUIRING THE ASSESSEE TO FILE THE AUDIT REPORT IS TO ASSIST THE ASSESSING OFFICER TO COMPUTE THE TAXABLE INCOME. IN THIS CASE, THE AUDIT REPORT WAS FILED ALONG WITH THE RETURN OF INCOME. THEREFORE, THE ASSESSING OFFICER WAS NO T PREJUDICED OR PREVENTED IN 3 ITA NO. 453/COCH/2010 ANY WAY FROM MAKING USE OF THE AUDIT REPORT IN THE P ROCESS OF COMPUTING THE TAXABLE INCOME. THEREFORE, THIS TRIBUNAL IS OF THE OPINION THAT THIS IS NOT A FIT CASE FOR LEVY OF PENALTY U/S 271B OF THE ACT. ACCORDING LY, THE ORDERS OF THE AUTHORITIES BELOW ARE SET ASIDE AND PENALTY LEVIED U/S 271B IS DELETED. 5. IN THE RESULT, APPEAL OF THE ASSESSEE STANDS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 01 ST JUNE, 2012. SD/- SD/- (B.R. BASKARAN) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER COCHIN, DT : 01 ST JUNE, 2012 PK/- COPY TO: 1. THE APPEAL 2. THE RESPONDENT 3. THE COMMISSIONER OF INCOME-TAX 4. THE COMMISSIONER OF INCOME-TAX(A) 5. THE DR (TRUE COPY) BY ORDER ASSTT. REGISTRAR, INCOME-TAX APPELLATE TRIBUNAL, COCHIN BENCH