M/S. R.R.Kapoor, Ahmednagar V. Income-Tax Officer, Ward 2, Ahmednagar

ITA 592/PUN/2020

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 0401 (ITAT-PUNE)
• Duration Of Justice: 1 year(s) 7 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-06-2022
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2015-2016
• Appeal Filed On: 02-11-2020
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Reasonable cause
• Section: 273B; 271B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH, ‘B’ PUNE BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER आयकर अपील सं. / ITA No.592/PUN/2020 नधा रण वष / Assessment Year : 2015-16 M/s. R.R. Kapoor, 11, Prerana Arcade, Near Tarakpur Bus Stand, Ahmednagar – 414 001 Maharashtra PAN : AAEFR9509B Vs. ITO, Ward-2, Ahmednagar Appellant Respondent आदेश / ORDER PER R.S. SYAL, VP : This appeal by the assessee is directed against the order passed by the CIT(A)-2, Pune on 30-07-2020 confirming the penalty of Rs.1,50,000/- imposed by the Assessing Officer (AO) u/s.271B of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the assessment year 2015-16. 2. This appeal is time barred by 06 days. The ld. AR has attributed the reason of delay due to Covid-19 pandemic. Therefore, the said delay is condoned and the instant appeal is Assessee by Shri Pramod Shingte Revenue by Shri M.G. Jasnani Date of hearing 15-06-2022 Date of pronouncement 15-06-2022 ITA No.592/PUN/2020 M/s. R.R. Kapoor 2 admitted for disposal on merits by virtue of judgment of the Hon’ble Supreme Court in Cognizance for Extension of Limitation, In re 438 ITR 296 (SC) read with judgment in Cognizance for Extension of Limitation, In re 432 ITR 206 (SC) dated 08-03-2021 and 421 ITR 314. 3. Briefly stated, the facts of the case are that the assessee furnished his return on 30-03-2016 declaring total income of Rs.8,56,050/-. Such return was accompanied by the tax audit report. The AO observed that the audit u/s.44AB was not carried out before the “specified date”, namely, 31-10-2015 and hence, the assessee was liable to be visited with penalty u/s.271B of the Act. On being called upon to explain the reasons for the delay, the assessee submitted that audit of the books of account for the immediately preceding year was carried out by M/s. S.M.R. For the year under consideration, the new auditor was appointed for conducting the audit on 22-08-2015. The new auditor called for objections, if any, to its appointment from the earlier auditor, who raised certain issues. Eventually, the issues were resolved and immediately thereafter the incumbent auditor undertook the audit work and completed the same, followed by the filing of the return ITA No.592/PUN/2020 M/s. R.R. Kapoor 3 along with the tax audit report. Not convinced, the AO imposed penalty of Rs.1,50,000/- u/s.271B of the Act. The ld. CIT(A) echoed the penalty, against which the assessee has come up in appeal before the Tribunal. 4. After considering the rival submissions and going through the relevant material on record, it is observed that the assessee admittedly got the accounts audited beyond the due date u/s 139(1) of the Act, which was the reason for late filing of the audit report with the Department. Section 271B in such circumstances calls for imposition of the penalty. However, it is pertinent to note that section 271B is subject to section 273B, and the latter section emphasizes that if a “reasonable cause” is established for non-compliance of the requirements which led to imposition of penalty under certain sections, including 271B, then no penalty should be imposed. We are confronted with a situation in which there was a change of the auditor from the preceding year. The new auditor, as per the established procedure, sought a no objection from the earlier auditor, who raised certain objections. Those issues were resolved later on, which led to the delay in the audit of the accounts of the assessee. As and when the issues got ITA No.592/PUN/2020 M/s. R.R. Kapoor 4 resolved, the audit work was taken up and completed followed by the filing of tax audit report and the income-tax return. In our considered opinion, such reasons for the delay constitute a reasonable cause for the late auditing of the accounts and of furnishing the audit report belatedly. In the hue of section 273B r.w.s.271B, we hold that the ld. CIT(A) ought not to have confirmed the penalty. We, therefore, set aside the impugned order and direct to delete the penalty. 5. In the result, the appeal is allowed. Order pronounced in the Open Court on 15 th June, 2022. Sd/- Sd/- ( PARTHA SARATHI CHAUDHURY) (R.S.SYAL) JUDICIAL MEMBER VICE PRESIDENT पुणे Pune; िदनांक Dated : 15 th June, 2022 सतीश आदेश की ितिलिप अ ेिषत/Copy of the Order is forwarded to: 1. अपीलाथ / The Appellant; 2. 3. थ / The Respondent The CIT(A)-2, Pune 4. The Pr.CIT-2, Pune 5. 6. DR, ITAT, ‘B’ Bench, Pune गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण ,पुणे / ITAT, Pune ITA No.592/PUN/2020 M/s. R.R. Kapoor 5 Date 1. Draft dictated on 15-06-2022 Sr.PS 2. Draft placed before author 15-06-2022 Sr.PS 3. Draft proposed & placed before the second member JM 4. Draft discussed/approved by Second Member. JM 5. Approved Draft comes to the Sr.PS/PS Sr.PS 6. Kept for pronouncement on Sr.PS 7. Date of uploading order Sr.PS 8. File sent to the Bench Clerk Sr.PS 9. Date on which file goes to the Head Clerk 10. Date on which file goes to the A.R. 11. Date of dispatch of Order. *