Sri Sha Dalichand Malaji, Guntur V. The ITO, Ward-2(1), Guntur

ITA 497/VIZ/2010

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 2611 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-12-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 04-11-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J SIRI KUMAR
• Assessee Lawyers: K THIRUMALA RAO
• Keywords: Reasonable cause; Set aside
• Section: 273B

Judgement Text

ITA NO.497 OF 2010 SHA DALICHAND MALAJI GUNTUR PAGE 1 OF 3 IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE: SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI BR BASKARAN, ACCOUNTANT MEMBER ITA NO.497/VIZAG/2010 ASSESSMENT YEAR: 2008-09 SHA DALICHAND MALAJI, GUNTUR VS. ITO WARD-2(1) GUNTUR (APPELLANT) PAN NO: AGZPS 2332 Q (RESPONDENT) APPELLANT BY: SHRI K. THIRUMALA RAO, CA RESPONDENT BY: SHRI J. SIRI KUMAR, DR ORDER PER SHRI B. R. BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 27.08.2010 PASSED BY LEARNED CIT(A), GUNTUR AND IT RELATES TO THE ASSESSMENT YEAR 2008-09. THE ASSESSEE IS CHALLENGI NG THE ORDER OF THE LEARNED CIT (A) IN CONFIRMING THE PENALTY OF RS.20, 720/- LEVIED UNDER SECTION 271B OF THE ACT. 2. THE FACTS RELATING TO THE ISSUE ARE STATED IN BR IEF. THE ASSESSEE HEREIN FILED HIS RETURN OF INCOME FOR THE ASSESSMEN T YEAR UNDER CONSIDERATION ON 31-3-2009. HE HAD OBTAINED THE AUD IT REPORT, WHICH IS REQUIRED TO BE OBTAINED UNDER SECTION 44AB OF THE A CT, ONLY ON 30-3-2009 WHEREAS THE DUE DATE FOR OBTAINING THE SAID REPORT WAS 30-9-2008. IN VIEW OF THE VIOLATION OF THE PROVISIONS OF SEC. 44AB OF THE ACT, THE ASSESSING OFFICER LEVIED A PENALTY OF 20,720/- UNDER SECTION 271B OF THE ACT AND THE SAME WAS CONFIRMED BY THE LEARNED CIT (A). HENCE TH E ASSESSEE IS IN APPEAL BEFORE US. ITA NO.497 OF 2010 SHA DALICHAND MALAJI GUNTUR PAGE 2 OF 3 3. WE HAVE HEARD THE RIVAL CONTENTIONS AND ALSO PER USED THE RECORD. THE ASSESSEE HAS FURNISHED THE FOLLOWING EXPLANATIO N FOR THE DELAY IN FILING THE AUDIT REPORT. A) THE ASSESSEE IS HAVING 3 TYPES OF BUSINESS AND T HE TURNOVER OF EACH OF THE BUSINESS IS LESS THAN RS.40 LAKHS AN D THE AGGREGATE TURNOVER EXCEEDED THE THRESHOLD LIMIT OF RS.40 LAKHS. B) THE ASSESSEE IS DOING BUSINESS FOR THE LAST 20 Y EARS AND THE AGGREGATE TURNOVER WAS LESS THAN RS.40 LAKHS UP TO THE ASSESSMENT YEAR 2007-08, THAT IS THE IMMEDIATELY PR ECEDING YEAR. C) SINCE THIS YEAR IS THE FIRST YEAR FOR GETTING TH E ACCOUNTS AUDITED UNDER SECTION 44AB OF THE ACT, THE ASSESSEE WAS NOT AWARE OF THE PROVISIONS OF THE AUDIT. D) THE REGULAR AUDITOR OF THE ASSESSEE, SHRI P. NAR ASIMHA MURTHY, CHARTERED ACCOUNTANT BECAME ILL AND SUBSEQU ENTLY DIED. IN THIS REGARD THE ASSESSEE HAS FILED A MEDIC AL CERTIFICATE TO SHOW THAT THE AUDITOR WAS UNDERTAKING TREATMENT IN THE MONTH OF JULY, 2008. 4. UNDER SECTION 273B OF THE ACT THE PENALTY UNDER SECTION 271B SHALL NOT BE IMPOSABLE ON THE ASSESSEE IF HE PROVES THAT THERE WAS A REASONABLE CAUSE FOR THE SAID FAILURE. FROM THE EXPLANATIONS O F THE ASSESSEE, WE NOTICE THAT THE YEAR UNDER CONSIDERATION WAS THE FIRST YEA R FOR GETTING HIS ACCOUNT AUDITED UNDER SECTION 44AB OF THE ACT. THE ASSESSEE IS HAVING THREE TYPES OF BUSINESSES AND THE AGGREGATE TURNOVER OF THE THR EE UNITS FOR THE YEAR UNDER CONSIDERATION STOOD AT RS.41.43 LAKHS, WHICH IS JUST ABOVE THE THRESHOLD LIMIT OF RS.40 LAKHS. THE ASSESSEE HAS AL SO SUBSTANTIATED HIS EXPLANATION THAT HIS AUDITOR WAS SERIOUSLY ILL DURI NG THAT PERIOD AND HENCE COULD NOT HAVE ATTENDED TO THE ASSESSEE. ON CONSIDE RING THE VARIOUS EXPLANATIONS OF THE ASSESSEE, WE ARE OF THE VIEW TH AT THE ASSESSEE HAD A REASONABLE CAUSE FOR THE DELAY IN GETTING THE ACCOU NTS AUDITED AND ALSO FOR THE DELAY IN OBTAINING THE AUDIT REPORT. IN VIEW OF THE ABOVE, WE SET ASIDE ITA NO.497 OF 2010 SHA DALICHAND MALAJI GUNTUR PAGE 3 OF 3 THE ORDER OF THE LEARNED CIT (A) AND DIRECT THE ASS ESSING OFFICER TO DELETE THE PENALTY OF RS.20,720/- LEVIED UNDER SECTION 271 B OF THE ACT. 5. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLO WED. PRONOUNCED IN THE OPEN COURT ON 7 TH DECEMBER, 2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, DATE: 7-12-2010 COPY TO 1 SHRI SHA DALICHAND MALAJI, C/O K. TIRUMALA RAO, C HARTERED ACCOUNTANT D.NO.5-25-107, 3/1 BRODIEPET, GUNTUR 522002 2 THE ITO WARD-2(1) GUNTUR 3 4. THE CIT GUNTUR THE CIT(A), GUNTUR 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM