Sri Kothuri Siva Sankara Rao, Narasaraopeta V. The ITO, Ward-1, Narasaraopeta

ITA 501/VIZ/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 6995 (ITAT-VISAKHAPATNAM)
• Duration Of Justice: 4 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-03-2010
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 24-03-2010
• Assessment Year: 2006-2007
• Appeal Filed On: 06-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S S GOPINATH
• Keywords: Reasonable cause

Judgement Text

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.501/VIZAG/2009 ASSESSMENT YEAR: 2006-07 KOTHURI SIVA SANKARA RAO, NARASARAOPET VS. ITO WARD-1, NARASARAOPET (APPELLANT) (RESPONDENT) PAN NO. AGOPK 6835 F APPELLANT BY: SHRI GVN HARI, CA RESPONDENT BY: SHRI G.S.S. GOPINATH, DR ORDER PER SHRI B R BASKARAN, ACCOUNTANT MEMBER: THE APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 26.8.2009 PASSED BY THE LD CIT(A), GUNTUR CONFIRMIN G THE PENALTY OF RS.43,780/- LEVIED U/S 271 B OF THE ACT FOR THE ASS ESSMENT YEAR 2006-07. 2. THE FACTS RELATING TO THE ISSUE IS STATED IN BRI EF. THE ASSESSEE IS CARRYING ON THE RETAIL BUSINESS IN CEMENT AND STEEL . FOR THE ASSESSMENT YEAR 2006-07, HE REPORTED A SALES TURN OVER OF RS.87.55 LAKHS. HENCE THE ASSESSEE WAS REQUIRED TO GET HIS BOOKS OF ACCOUNT AUDITED AN D FILE THE AUDIT REPORT WITH THE ASSESSING OFFICER BEFORE THE SPECIFIED DAT E, I.E. ON OR BEFORE 31.10.2006. THOUGH THE AUDIT REPORT OBTAINED BY THE ASSESSEE WAS DATED 31.10.2006, HE FILED THE SAME ONLY ON 15.11.2006. HENCE THE ASSESSING PAGE 2 OF 3 OFFICER INITIATED PENALTY PROCEEDING U/S 271 B OF T HE ACT AND LEVIED A PENALTY OF RS.43,780/- FOR THE DELAY IN FILING THE TAX AUDI T REPORT. THE LD CIT(A) CONFIRMED THE LEVY OF PENALTY. AGGRIEVED, THE ASSES SEE IS BEFORE US IN APPEAL. 3. WE HAVE HEARD THE PARTIES AND CAREFULLY PERUSED THE RECORD. THE EXPLANATION OF THE ASSESSEE FOR THE DELAY IN FILING THE AUDIT REPORT WAS THAT HE WAS ADVISED TO TAKE REST FOR 20 DAYS FROM 25.10.200 6 ON ACCOUNT OF HIS ILLNESS DUE TO DIABETIC AND CHRONIC BRONCHITIS AND HENCE HE COULD NOT FILE THE AUDIT REPORT BEFORE THE SPECIFIED DATE. IN SUPPORT OF HIS EXPLANATION THE ASSESSEE HAS FILED A CERTIFICATE FROM THE DOCTOR. T HE EXPLANATION OF THE ASSESSEE WAS NOT ACCEPTED BY THE AO AS HE WAS OF TH E VIEW THAT THE ASSESSEE COULD HAVE GOT HIS ACCOUNTS AUDITED PRIOR TO HIS ILLNESS. 3.1 THE UNDISPUTED FACT IS THE ASSESSEE GOT THE AUDIT REPORT ON 31.10.2006, I.E. BEFORE THE SPECIFIED DATE. THE AO S ALLEGATION THAT THE AUDIT REPORT WAS BACK DATED DOES NOT HAVE ANY BASIS. AC CORDING TO THE LD AR, THE ASSESSEE WAS LIABLE FOR TAX AUDIT FOR THE FIRST TIM E DURING THE INSTANT YEAR. ACCORDING TO THE ASSESSEE, HE WAS ADVISED TO TAKE R EST FROM 20.10.2006 BY HIS DOCTOR AND IN SUPPORT OF HIS EXPLANATION; HE HA S FILED A CERTIFICATE FROM THE DOCTOR. THIS EXPLANATION OF THE ASSESSEE HAS NOT B EEN FOUND TO BE FALSE BY THE AO ON THE BASIS OF ANY MATERIAL. ALL THESE FAC TS SHOW THAT THE ASSESSEE HAD REASONABLE CAUSE FOR THE DELAY IN FILING TAX AU DIT REPORT. ACCORDING TO SECTION 273 B OF THE ACT, PENALTY U/S 271 B SHALL N OT BE IMPOSED IF THE ASSESSEE PROVED THAT THERE WAS REASONABLE CAUSE FOR THE FAILURE. IN OUR OPINION THE ASSESSEE HAS SUFFICIENTLY EXPLAINED THE DELAY, WHICH IN OUR PAGE 3 OF 3 OPINION, IS REASONABLE. IN VIEW OF THE ABOVE WE SE T ASIDE THE ORDER OF THE TAX AUTHORITIES AND CANCEL THE PENALTY OF RS.43,780/- L EVIED U/S 271 B OF THE ACT. 4. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. PRONOUNCED IN THE OPEN COURT ON 30-03-2010. SD/- SD/- (SUNIL KUMAR YADAV) (B R BASKARAN) JUDICIAL MEMBER ACCOUNTANT MEMBER PVV/SPS VISAKHAPATNAM, DATE: 30 TH MARCH, 2010. COPY TO: 1 SHRI KOTHURI SIVA SANKARA RAO, PROP. BHAVANI STEE LS, D.NO.16-1-259, CH.PET ROAD, NARASARAOPET 2 THE ITO WARD-I, NARASARAOPET 3 THE CIT, GUNTUR 4 THE CIT(A), GUNTUR 5 THE DR, ITAT, VISAKHAPATNAM. 6 GUARD FILE. BY ORDER SENIOR PRIVATE SECRETARY INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM