Sh. Raman Gandotra, Pro. M/s Mohan Singh, Jammu V. The Dy. Commissioner of Income-tax, Jammu

ITA 526/ASR/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 95078 (ITAT-AMRITSAR)
• Duration Of Justice: 1 year(s) 3 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 01-12-2015
• Assessment Year: 2009-2010
• Appeal Filed On: 27-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PGP VS DCIT CIRCLE JAMMU
• Assessee Lawyers: P N ARORA ADV SH R K SHARDA
• Keywords: Reasonable cause
• Section: 133A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR (JAMMU CAMP; JAMMU ) BEFORE SH. A.D.JAIN, HONBLE JUDICIAL MEMBER AND SH. T.S.KAPOOR, HONBLE ACCOUNTANT MEMBER I.T.A NO. 526(ASR)/2014 ASSESSMENT YEAR: 2009-10 SH. RAMAN GANDOTRA, PROP.M/S. MOHAN SINGH, 341/5, CHANNI HIMMAT, JAMMU. PAN: ABYPG7347P VS. THE DCIT, CIRCLE-1, JAMMU. (APPELLANT) (RESPONDENT) APPELLANT BY: SH. P.N.ARORA (ADV.) RESPONDENT BY: SH. R.K.SHARDA (DR.) DATE OF HEARING: 01.12.2015 DATE OF PRONOUNCEM ENT: 03.12.2015 ORDER PER T.S.KAPOOR (A.M): THIS IS AN APPEAL FILED BY THE ASSESSEE AGA INST THE ORDER OF LEARNED CIT(A), JAMMU, DATED 22.07.2014 FOR ASST. YEAR. 200 9-10. THE ASSESSEE HAS TAKEN FIVE GROUNDS OF APPEAL, HOWEVER, THE CRUX OF GROUNDS OF APPEAL IS THE ACTION OF LEARNED CIT(A) BY WHICH HE HAD CONFIRMED THE PENALTY IMPOSED BY ASSESSING OFFICER U/S 271B OF THE ACT. 2. ITA NO.52 6 (ASR)/2014 ASST. YEAR 2009-10 2. AT THE OUTSET, THE LEARNED AR SUBMITTED THAT SUR VEY WAS CONDUCTED ON THE PREMISES OF ASSESSEE ON 16.06.2009 AND DOCUMENT S WERE SEIZED AND THEREFORE, THE ASSESSEE WAS NOT ABLE TO GET HIS BOO KS OF ACCOUNT AUDITED BY 30.09.2009. HE FURTHER SUBMITTED THAT THE ASSESSEE VIDE LETTER DATED 12.08.2009, 2.2.2010 AND 1.06.2010 HAD REQUESTED FO R RELEASE OF DOCUMENTS AND IN THIS RESPECT HE INVITED OUR ATTENT ION TO PAPER BOOK PAGE 2,3 AND 4 WHERE COPIES OF LETTERS DATED 12.08.2009, 2.02.2010 AND 1.06.2010 WERE PLACED. THE LEARNED AR SUBMITTED THA T THE FINDING OF LEARNED CIT(A) THAT ASSESSEE HAD NOT APPLIED FOR RE LEASE OF DOCUMENTS BEFORE 01.06.2010 IS NOT CORRECT AS IT IS APPARENT FROM TH E COPIES OF LETTERS WRITTEN TO ASSESSING OFFICER FOR RELEASE OF DOCUMENTS. THE LEARNED AR SUBMITTED THAT THE ACCOUNTS COULD NOT BE GOT AUDITED WITHIN T HE PRESCRIBED PERIOD OF TIME DUE TO REASONS BEYOND THE CONTROL OF ASSESSEE FOR WHICH ASSESSEE CONTINUED TO MAKE EFFORTS BUT COULD NOT GET THE DOC UMENTS WHICH WERE ULTIMATELY PROVIDED ON 14.07.2010. IN VIEW OF THE ABOVE, IT WAS PRAYED THAT THERE WAS A BONAFIDE REASON FOR NOT FILING THE AUDI T REPORT WITHIN THE PRESCRIBED TIME AND THEREFORE PENALTY WAS NOT IMPOS ABLE. RELIANCE IN THIS RESPECT WAS PLACED ON THE FOLLOWING CASE LAWS. (I) ITO VS. BABU LALA JAIN, 251 ITR 656 (P&H) (II) CIT VS. ASHOK DAIRY 279 ITR 32 (P&H) (III) CIT VS. S.S. BANGA ,279 ITR 107 (P&H) (IV) CIT VS. HARYANA AGRO SER ICES, 279 ITR 113( P& H). 3. ITA NO.52 6 (ASR)/2014 ASST. YEAR 2009-10 3. THE LEARNED DR, HOWEVER, HEAVILY RELIED UPON THE ORDER OF AUTHORITIES BELOW. 4. WE HAVE HEARD THE RIVAL PARTIES AND HAVE GONE TH ROUGH THE MATERIAL PLACED ON RECORD. WE FIND THAT THE LEARNED CIT(A) H AS DISMISSED THE APPEAL OF ASSESSEE BY HOLDING AS UNDER: 4. I HAVE CONSIDERED THE FINDINGS OF THE AO IN THE PENALTY ORDER AND SUBMISSION OF THE APPELLANT BEFORE ME. THE APPELLANTS ARGUMENT IS THAT THE ENTIRE BOOKS O F ACCOUNT ALONGWITH ANCILLARY VOUCHERS WERE IMPOUNDED IN SURVEY OPERATI ON U/S 133A IN THE MONTH OF JUNE 2009 AND THEREFORE, HE FAILED TO GET THE ACCOUNTS AUDITED BEFORE 30/09/2009 UNDER THE PROVISION OF SECTION 44AB. THE APPELLANT ARGUED THAT THE PHOTOCOPIES OF THE IMPOUNDED MATERIAL WERE PROV IDED ONLY ON 14/07/2010 AND THEREFORE, THE ACCOUNTS WERE NOT AUD ITED IN TIME AND DELAY WAS BONAFIDE AND HENCE PENALTY WAS NOT LEVIABLE. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND FIND THAT THE APPELLANT DID NOT APP LY FOR XEROX COPY BEFORE 01/06/2010 AND HENCE CANNOT CLAIM THAT DELAY WAS BO NAFIDE. THE APPELLANT WAS PROVIDED THE XEROX COPY BEFORE 01/06/2010 AND H ENCE CANNOT CLAIM THAT DELAY WAS BONAFIDE. THE APPELLANT WAS PROVIDED THE XEROX COPY ON 14/07/2010 AND AS PER RECORD HE GOT HIS ACCOUNT AUD ITED ON 05.01.2011. THE ONUS TO GET HIS ACCOUNT AUDITED WAS ON THE APPE LLANT AS PER THE STATUTORY PROVISIONS U/S 44AB AND THE APPELLANT SHOULD HAVE T AKEN THE XEROX COPIES WELL IN TIME FROM THE DEPARTMENT WHICH WAS NOT DONE . THE APPELLANT HAD THREE CLEAR MONTHS TO GET PHOTOCOPIES AND ACCOUNTS AUDITED WHICH WAS NOT AVAILABLE. THE APPELLANT IS SILENT ON THE ISSUE AS TO WHY HE DID NOT APPLY FOR XEROX/PHOTOCOPIES IN TIME. IN VIEW OF ABOVE, I FIND THAT THE APPELLANT CANNOT TAKE SHELTER FOR NOT GETTING THE BOOKS OF ACCOUNT A UDITED UNDER THE PRETEXT THAT PHOTOCOPIES WERE SUPPLIED LATE. I FIND THAT THERE I S NO JUSTIFICATION IN THE ARGUMENTS OF THE APPELLANT AND I CONFIRM THE PENALT Y ORDER PASSED BY THE AO. WE FIND THAT THE FINDINGS RECORDED BY THE LEARNED C IT(A) ARE NOT CORRECT AS ASSESSEE HAS BEEN DEMANDING THE RELEASE OF DOCUMENT S FROM 12.08.2009 ONWARDS, WHICH WERE PROVIDED TO THE ASSESSEE ONLY O N 14.07.2010, 4. ITA NO.52 6 (ASR)/2014 ASST. YEAR 2009-10 THEREFORE, THE DELAY IN GETTING ACCOUNTS AUDITED WA S BEYOND THE CONTROL OF ASSESSEE. WE FURTHER FIND THAT THE PENALTY FOR VIOL ATION OF SECTION 44AB IS NOT MANDATORY. THE HONBLE PUNJAB & HARYANA HIGH CO URT IN THE CASE OF CIT VS. S. S. BANGA 279 ITS 107 (P&H) HAS OBSERVED AS UNDER: IN IT REF. NO.61 OF 1995, CIT VS. ASHOKA DAIRY, DE CIDED ON 7 TH JAN.2005 [REPORTED AT (2006) 200 CTR (P&H) 211-ED.], A DIVIS ION BENCH OF THIS COURT, OF WHICH ONE OF US (G.S. SINGHVI, J.) WAS A MEMBER, IN TERPRETED SS. 44AB AND 2711B OF THE ACT AND OBSERVED: A READING OF S. 44A REPRODUCED ABOVE SHOWS THAT IT IMPOSES A DUTY ON EVERY PERSON CARRYING ON BUSINESS AND/OR PROFESSION TO GE T HIS ACCOUNTS AUDITED BY AN ACCOUNTANT BEFORE THE SPECIFIED DATE AND FURNISH THE REPORT OF SUCH AUDIT IN THE PRESCRIBED FORM. SE.271B EMPOWERS THE AO TO IMP OSE PENALTY IN CASE THE CONCERNED PERSON FAILS TO GET HIS ACCOUNTS AUDITED IN RESPECT OF ANY PREVIOUS YEAR OR YEARS RELEVANT TO AN ASSESSMENT YEAR OR TO FURNISH THE AUDIT REPORT AS PER THE REQUIREMENT OF S. 44AB. HOWEVER, THERE IS N OTHING IN THE LANGUAGE OF THAT SECTION FROM WHICH IT CAN BE INFERRED THAT LEV Y OF PENALTY IS MANDATORY IN ALL CASES OF NON-COMPLIANCE WITH S. 44AB AND THAT I N NO CASE, THE AO CAN ACCEPT THE CAUSE SHOWN BY THE ASSESSEE. RATHER, THE USE OF THE EXPRESSION REASONABLE CAUSE [THIS EXPRESSION WAS OMITTED BY THE TAXATION LAWS (AMENDMENT AND MISCELLANEOUS PROVISIONS) ACT, 1986] AND THE WORK MAY SHOWS THAT IT IS ONLY AN ENABLING PROVISIONS AND TH E AO IS NOT UNDER AN OBLIGATION TO IMPOSE PENALTY IN EACH AND EVERY CASE IGNORING THE EXPLANATION GIVEN BY THE ASSESSEE OR CAUSE SHOWN BY IT FOR DELA YED FILING OF THE RETURN AND/OR AUDIT REPORT. TO PUT IT DIFFERENTLY, THE AO HAS THE DISCRETION IN THE MATTER OF IMPOSING OF PENALTY AND HE MAY NOT IMPOSE PENALTY IF HE IS SATISFIED WITH THE EXPLANATION GIVEN BY THE ASSESSEE FOR NOT GETTING ITS ACCOUNTS OF THE PREVIOUS YEAR AUDITED BY AN ACCOUNTANT BEFORE THE S PECIFIED DATE AND/OR FILING THEREOF ALONG WITH THE RETURN. IN THE PRESENT CASE, WE FIND THAT THE REASON FOR LA TE FILING OF AUDIT REPORT WAS BEYOND THE CONTROL OF ASSESSEE, AND THEREFORE, THER E IS A REASONABLE CAUSE AND THEREFORE, PENALTY WAS NOT IMPOSABLE. 5. ITA NO.52 6 (ASR)/2014 ASST. YEAR 2009-10 5. IN VIEW OF THE ABOVE, THE APPEAL FILED BY THE AS SESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 3 RD DECEMBER, 2015. SD/- SD/- (A.D.JAIN) (T.S.KAPOOR) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 03.12.2015 PK/PS COPY OF THE ORDER FORWARDED TO: 1. THE ASSESSEE: 2. THE 3. THE CIT(A) 4. THE CIT 5. THE SR DR, ITAT, AMRITSAR. TRUE COPY BY ORDER (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, AMRITSAR BENCH: AMRITSAR.