Unique Automobiles , Sangli V. Assistant Commissioner of Income-tax, Circle - 2, Sangli

ITA 477/PUN/2018

• Counselvise Citation: [2022] 107 COUNSELVISE.COM (IT) 0272 (ITAT-PUNE)
• Duration Of Justice: 4 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2022
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: misc
• Appeal Filed On: 13-03-2018
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Reasonable cause; Set aside
• Section: 32; 27; 148; 28; 144; 273B; 271E; 271B; 44AB

Judgement Text

आयकर अपीलीय अिधकरण “बी” Ɋायपीठ पुणे मŐ। IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, PUNE BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. DIPAK P. RIPOTE, ACCOUNTANT MEMBER आयकर अपीलसं. / ITA No.477/PUN/2018 िनधाᭅरणवषᭅ / Assessment Year : 2004-05 Unique Automobiles, 32, Jayraj, Near Tata Petrol Pump, Vishrambag, Sangli – 416416. PAN: AAAFU 3563 A Vs . The CIT(A), Kolhapur. Appellant/ Assessee Respondent /Revenue Assessee by None. Revenue by Shri M.G.Jansnani - DR Date of hearing 11/07/2022 Date of pronouncement 05/08/2022 आदेश/ ORDER Per S.S.Godara, JM: This assessee’s appeal for Assessment Year 2004-05 is directed against the Commissioner of Income Tax(Appeals)-1, Kolhapur’s order dated 01.11.2017 passed in appeal no. SLI/093/10- 11, in proceedings u/s.271B of the Income Tax Act, 1961 [in short “the Act”]. 2. Case called twice. None appears at assessee’s behest. It is accordingly proceeded exparte. 3. Coming to the assesseee’s sole substantive grievance that both the lower authorities have erred in law and on facts in imposing the impugned section 271B penalty Rs.1,00,000/- we have noted that the CIT(A) lower appellate discussion to this effect reads as under: ITA No.477/PUN/2018 for A.Y. 2004-05 (A) Unique Automobiles Vs. ACIT, Circle-2, Sangli. 2 “5.0 The appeal is contesting only issue of penalty of Rs. 1,00,000/- levied u/s 27IB of the Act for AY 2004-05. 6.0 Decision:- Before proceeding to decide the issue, I would like to reproduce section 271B and 273B of the Act and they read as under:- “271B. If any person fails 70 [***] to get his accounts audited in respect of any previous year or years relevant to an assessment year or 71 [furnish a report of such audit as required under section 44AB1, the 72[Assessing] Officer may direct that such person shall pay, by way of penalty, a sum equal to one-half per cent of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in profession, in such previous year or years or a sum of one hundred thousand rupees, whichever is less.]” “273B. Notwithstanding anything contained in the provisions of 24[clause (b) of sub-section (1) of| 25 f section 271. Section 271A, 26 [section 271AA,] section 271B 26a[, section 271 BA], 27 [section 27IBB.]section 271C , section 27ID, section 271E , 28 [ section 271F. 29 1 section 271 FA ,] 30[ section 271FB, ] 3.1 [ section 271G.1] clause (c) or clause (d) of sub-section (1) or sub-section (2) of section 272A. sub- section (1) of section 272AA1 or 32 [ section 272B or] 33 [sub- section (1) of section 272BB or] 34 [subsection (1) of section 272BBB or] clause (b) of sub-section (1) or clause (b) or clause (c) of sub-section (2) of section 273, no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provisions if he proves that there was reasonable cause 35 for the said failure.]” On perusal of assessment orders, penalty orders and details submitted by the appellant for AY 2000-01 to 2004-05, facts revealed as under:- Particulars AY 2000-01 AY 2001-02 AY 2002-03 AY 2003-04 A.Y. 2004-05 TAR due on 31/10/2000 31/10/2001 31/10/2002 30/11/2003 31/10/2004 TAR filed on 21/09/2005 21/09/2005 07/02/2006 07/02/2006 Not filed Sales in Rs. 17,79,68,519 22,01,27,598 14,38,74,734 10,52,35,099 3,32,10,595 27IB levied (Rs.) 1,00,000 1,00,000 1,00,000 1,00,000 1,00,000 Date of penalty order 25/07,/2006 08/08/2006 28/06/2007 28/06/2007 28/06/2007 ITA No.477/PUN/2018 for A.Y. 2004-05 (A) Unique Automobiles Vs. ACIT, Circle-2, Sangli. 3 Date of first appeal decision 30/01/2009 30/01/2009 30/01/2009 30/01/2009 30/01/2009 FA status Dismissed vide consolidated order dt. 30/01/2009 Date of 2 nd appeal decision by ITAT 26/03/2010 26/03/2010 26/03/2010 26/03/2010 26/03/2010 2 nd appeal status Order dated 30/01/2009 of CIT(A) was set aside by the ITAT vide order dated 26/03/2010. On perusal of above data relevant to AYs 2000-01 to 2003-04, it is evident that though the appellant’s turnover/sales for all the four AYs was far above the prescribed limit for Tax Audit u/s 44AB of the Act, the appellant has filed his ROIs and Tax audit Report belatedly and that too after issue of notices u/s 148 of the Act. In the year under consideration, the firm has neither filed ROI for AY 2004-05 or filed tax audit report despite the fact that its turnover was above Rs. 3 Crores and the firm was having taxable income for AY 2004- 05. In respect of penalty levied u/s 27IB of the Act for AY 2004-05 no submission has been filed at all which is against directions of Hon. ITAT Pune which reads as ‘the assessee and the Id. Council of the assessee are also directed to suo-moto approach or appear before the CIT(A) within a month from the receipt of this order with necessary documents and evidences which would facilitate the disposal of the appeals before the CIT(A). As stated by the assessee’s council, the assessee shall not seek adjournments with out the permission of the CIT(A) and co-operate fully with the revenue authorities till the set aside proceedings are complete in all respect.’ On perusal of record available with this office, it is noticed that the appellant was habitual defaulter in compliance of taxation matters and have scant regard towards legal obligations. If the department would not have issued notices u/s 148 of the Act, the appellant would would not have filed its ROI and TAR for the year under appeal. The appellant’s turnover for AY 2004-05 was Rs. 3,32,10,595/- and as per provisions of section 44AB of the Act, tax audit for year under consideration and its timely submission with the department within stipulated time is mandatory. However, the appellant failed to comply with this statutory provisions. In respect of AY 2004-05, without filing of appeal and raising ground nothing has been complied. Several notices served either remained unattended or returned un-served by postal authorities. Even the AR of the appellant orally asked to keep the proceeding pending for some time in the ITA No.477/PUN/2018 for A.Y. 2004-05 (A) Unique Automobiles Vs. ACIT, Circle-2, Sangli. 4 month of August, 2017. However, till date nothing has been filed or contended. The AO in para-3 of the penalty order dated 28/06/2007 has mentioned as ‘On perusal of assessee’s past records and subsequent records even upto this date, it is seen that the assessee is a habitual defaulter. Its tax matters in most of the assessment years, were regularized by issue of notices u/s 148 and its assessment for AY 2004-05 has been completed ex-parte u/s 144 rws 147. Penalties u/s 27IB were levied for AY 1998-99 and 1999-00 also, besides initiating the said penalty proceedings for AY 2002-03 to 2004-05. Not to comply with any provisions of the Act appears to be beneficial to the assessee. There is always conscious disregard to the statutory notices issued by the department in this case and the assessee does not deserve any lineency or clemency. Moreover, except requesting to keep the panlty proceedings pending, the assessee has not submitted anything as to the circumstances that prevented it from getting its accounts audited and furnished the same within stipulated time. During the course of assessment proceedings, the assessee simply stated that its accounts are audited and requested for accepting the book results.’ Besides this Hon. ITAT Pune in its order dated 26/03/2010 in para-6 of the order has observed that ‘Under normal circumstances, the appeals are to be dismissed. However, Ld. Council for the assessee made a statement at bar in the open court in the presence of colleague representatives that assessee would co-operate and file the relevant details which are required to adjudicate the issue afresh.’ However, in respect of AY 2001-05 nothing has been brought on record by the appellant to show the factual matrix which had prevented it from getting its accounts audited. On this ground itself the penalty levied u/s 271B of the Act for AY 2004-05 Reserves to be confirmed. The appellant has no plausible reason which can come in his support. All the explanations and changed stands taken before the AO do not favour its case. Before the undersigned, without filing of appeal, nothing has been submitted. The appellant has failed to avail opportuinity to prove that their was a reasonable cause as envisaged u/s 273B of the Act for this failure. My above view even gets support from Hon. ITAT Pune’s, decision in the case of R.R. Builders vs ACIT(ITAT no. 1399/PN/2011) dated 28/02/22013 which is squarely applicable. The relevant portion of the same is reproduced below:- 9.1 It is the case of the assessee that there was a reasonable cause in obtaining the audit report and furnishing of the same before the specified date due to the following reasons : a. There was a change in the auditor and there was delay in getting NOC by the new auditor from the old auditor. b. The director was busy in a land dispute between the assessee company and Karia Developers and Builders which continued upto December 2007. c. There was confusion regarding the year of taxability of the profit. ITA No.477/PUN/2018 for A.Y. 2004-05 (A) Unique Automobiles Vs. ACIT, Circle-2, Sangli. 5 9.2 From the records available we find the assessee has not given any details regarding the name of the previous auditor, the date of resolution appointing the new auditor and copy of any correspondence between the assessee company and the old auditor or the assessee company with the new auditor or correspondence between the new auditor and the old auditor. In absence of any evidence either before the AO or before the CIT(A) or even before the Tribunal the submission of the learned counsel for the assessee that delay in obtaining the auditor report was due to change of the auditor and delay in getting NOC from the previous auditor remains unsubstantiated. Therefore, this plea of the assessee having no evidentiary 7 value is rejected. 9.3 So far as the second submission of the learned counsel for the assessee that the director, who is looking after the accounts, was tied up with court litigation we find the court order disposing of the suit upon withdrawal of the suit by KDB is dated 14-12-2007 whereas the accounts were audited on 01-08-2008. The above details are as per the event chart filed by the assessee in the Paper Book Page 1. On a pointed query by the Bench the learned counsel for the assessee could not substantiate the delay between 14-12-2007 till 01-08-2008. Therefore, even if the submission of the learned counsel for the assessee that the delay was due to court litigation is accepted, even then also the assessee failed to substantiate the reason for delay between December 2007 till 01- 08-2008. Therefore, the submission of the learned counsel for the assessee for obtaining the audit report late on this ground is also liable to be rejected. 9.4 The third excuse given by the learned counsel for the assessee is that due to some confusion regarding the year of taxability it took lot of time in getting the accounts audited and obtain the audit report before the specified date. This in our opinion cannot be a valid excuse for not getting the accounts audited even after a period of over two years. It certainly cannot take such a long time to decide the issue of taxability of an item in a particular year. 9.5 As per the provisions of section 273B no penalty U/S.271B shall be imposable on the assessee for any failure referred to in the said provisions if the assessee proves that there was reasonable cause for the said failure. In the instant case the assessee could not explain any reasonable cause for not getting the accounts audited before the specified date and furnish the same by that date. Therefore, under the facts and circumstances of the case the penalty levied by the Assessing Officer U/S.271B and sustained by the CIT(A) in our opinion is justified. We accordingly uphold the order of the CIT(A). The ground raised by the assessee is accordingly dismissed. Facts of instant case for the year under appeal are identical to the case of R.R.Builders(supra) and therefore, respectfully following decision of ITA No.477/PUN/2018 for A.Y. 2004-05 (A) Unique Automobiles Vs. ACIT, Circle-2, Sangli. 6 jurisdictional ITAT, I hold that without reasonable cause the appellant failed to file tax audit report for AY 2004-05 and thus, the AO has rightly levied penalty u/s 27IB of the Act. Hence, I confirm penalty of Rs.1,00,000/- each levied for AY 2004-05. 7.0 In the result, the appeal stands dismissed.” 4. It is clear from the perusal of the CIT(A)’S foregoing detailed discussion that the assessee had not been able to explain and prove any justifiable reason for having not complied with the impugned compulsory audit provision under section 44AB of the Act. Faced with the situation, we confirm the impugned penalty imposed by the learned lower authorities. 5. This assessee’s appeal is dismissed. Order pronounced in the open Court on 5 th August, 2022. Sd/- Sd/- (DR. DIPAK P. RIPOTE (S.S.GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER पुणे / Pune; ᳰदनांक / Dated : 5 th Aug, 2022/ SGR* आदेशकᳱᮧितिलिपअᮕेिषत / Copy of the Order forwarded to : 1. अपीलाथᱮ / The Appellant. 2. ᮧ᭜यथᱮ / The Respondent. 3. The CIT(A), concerned. 4. The Pr. CIT, concerned. 5. िवभागीयᮧितिनिध, आयकर अपीलीय अिधकरण, “बी” बᱶच, पुणे / DR, ITAT, “B” Bench, Pune. 6. गाडᭅफ़ाइल / Guard File. आदेशानुसार / BY ORDER, // TRUE COPY // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे/ITAT, Pune.