NAV BHARAT POWERLOOM COOPERATIVE SOCIETY LIMITED, Burhanpur V. The INCOME TAX OFFICER, Burhanpur

ITA 617/IND/2012

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 2880 (ITAT-INDORE)
• Duration Of Justice: 3 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2007-2008
• Appeal Filed On: 31-12-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA
• Assessee Lawyers: G J SHAH CAS
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL , INDORE BENCH, INDORE BEFORE SHRI JOGINDER SINGH, J.M. AND SHRI R.C.SHARM A, A.M. PAN NO. : AHMPS8568A I.T.A.NO. 617/IND/2012 A.Y. : 2007 - 08 NAVBHARAT POWERLOOM COOPERATIVE SOCIETY LIMITED, ITO, BURHANPUR BURH ANPUR VS APPELLANT RESPONDENT APPELLANT BY : SHRI PANKAJ SHAH AND SHRI G.J. SHAH, C.A.S. RESPONDENT BY : SHRI R. A. VERMA, SR. DR DATE OF HEARING : 21 . 0 3 .201 3 DATE OF PRONOUNCEMENT : 10 . 0 4 .201 3 O R D E R PER R. C. SHARMA, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF CIT(A) DATED 1.11.2012, FOR THE ASSESSMENT YEAR 2007-08, IN THE MATTER OF IMPOSITION OF PENALTY U/S 271B OF THE INCOME-TAX ACT, 1961. 2. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORDS PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS A CO-OPERATIVE -: 2: - 2 SOCIETY, ENGAGED IN MANUFACTURE OF POWERLOOM CLOTH. THE ASSESSMENT WAS FRAMED U/S 143(3) ON 14.12.2009 AT I NCOME OF RS. 1,39,820/- AS AGAINST RS. 23,528/- DECLARED. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFF ICER NOTICED THAT DUE DATE OF FILING RETURN FOR THE ASSE SSEE SOCIETY WAS 31.10.2007, WHICH WAS EXTENDED UP TO 02.11.2007 . THE TURNOVER OF THE ASSESSEE EXCEEDED RS. 40 LAKHS AND THEREFORE, THE ASSESSEE WAS UNDER OBLIGATION TO GET ITS ACCOUN T AUDITED. BEING AUDITED CASE, THE ASSESSEE WAS ALSO REQUIRED EITHER TO FILE ITS RETURN OF INCOME WITHIN THE DUE DATE I.E. 02.11.2007 OR FILE COPY OF AUDIT REPORT BEFORE ASSESSING OFFICER. THE ASSESSING OFFICER FOUND THAT THE ASSESSEE HAS NOT FILED AUDIT REPORT ALONGWITH ITS RETURN WHICH WAS ELECTRONICALLY FILED ON 13.12.2007, ACCORDINGLY, HE LEVIED PENALTY U/S 271B AND THE SAME WAS CONFIRMED BY THE LD.CIT(A). 3. AGAINST THE ABOVE ORDER OF CIT(A), THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND HAVE GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AN D ALSO DELIBERATED ON THE CASE LAWS CITED BY THE LD. AUTHO RIZED -: 3: - 3 REPRESENTATIVE IN THE CONTEXT OF FACTUAL MATRIX OF THE CASE AS WELL AS DECISIONS CITED BEFORE THE LOWER AUTHORITIE S. FROM THE RECORD, WE FOUND THAT THE ASSESSEE IS A COOPERATIVE SOCIETY. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE G OT ITS BOOKS OF ACCOUNT AUDITED ON 10.10.2007, WHICH WAS M UCH BEFORE THE DUE DATE OF FILING THE RETURN, WHICH WAS 2.11.2007. RETURN OF INCOME WAS FILED ELECTRONICALLY ON 14.11. 2007. HOWEVER, THERE IS NO DISPUTE THAT AUDIT REPORT WAS OBTAINED ON 10.10.2007, WHICH BEARS THE DATE AS 10.10.2007 DULY SIGNED BY THE CHAIRMAN OF THE ASSESSEE SOCIETY. EVEN IN TH E E-RETURN FILED, THE DATE OF TAX REPORT WAS MENTIONED AS 10.1 0.2007. BEFORE THE LOWER AUTHORITIES, AN AFFIDAVIT WAS ALSO FILED STATING THE FACT THAT AUDIT REPORT WAS OBTAINED FROM THE AU DITOR ON 10.10.2007. 5. IT WAS ARGUED BY THE LD. AUTHORIZED REPRESENTATIVE THAT PENALTY CANNOT BE LEVIED FOR REASONS DIFFERENT FROM THE REASONS ON WHICH IT WAS INITIATED AND FOR THIS PURP OSE RELIANCE WAS PLACED ON THE DECISION OF GUJARAT HIGH COURT IN THE CASE OF E.M. SHAH & CO., 238 ITR 415. OUR ATTENTION WAS DRAWN TO THE ORDER OF THE ASSESSING OFFICERS PAGE NO.2 WHER EIN REASON -: 4: - 4 FOR IMPOSITION OF PENALTY WAS GIVEN TO THE EFFECT T HAT AUDIT REPORT WAS NOT FILED ALONGWITH THE RETURN OF INCOME , WHEREAS THE ASSESSING OFFICER HAS IMPOSED THE PENALTY BY GI VING REASON THAT THE ASSESSEE HAS NOT FILED ITS RETURN OF INCOM E WITHIN THE DUE DATE AND AS SUCH HAS NOT COMPLIED WITH THE PROV ISIONS OF SECTION 44AB. THE LD. AUTHORIZED REPRESENTATIVE FU RTHER CONTENDED THAT CBDTS CIRCULAR NO. 5/2007 DATED 26 .7.2007, HAS EXPRESSLY PROHIBITED TO FILE THE TAX AUDIT REPO RT EITHER BEFORE OR AFTER DUE DATE, HOWEVER, THE ASSESSING OF FICER LEVIED PENALTY U/S 271B FOR NEW REASON BY ASSUMING IT IS DEEMED THAT ACCOUNTS HAVE BEEN AUDITED BY THE DUE DATE. 6. WE FOUND THAT ASSESSEES CASE IS SQUARELY COVERED B Y THE DECISION OF MUMBAI BENCH IN THE CASE OF B.D. LE ASING AND FINANCE LIMITED, (2013) 49(II) ITCL 148, WHEREIN IT WAS HELD THAT PENALTY U/S 271B FOR NON-FILING OF TAX AUDIT R EPORT CANNOT BE LEVIED IN VIEW OF THE CBDT CIRCULAR NO.9/2006 DA TED 10.10.2006, WHICH PROVIDED THAT IN CASE OF ELECTRON IC FILING OF RETURN, TAX AUDIT REPORT NEED NOT TO BE FILED ALONG WITH RETURN. 7. IN VIEW OF THE ABOVE DISCUSSION, WE DO NOT FIND ANY MERIT IN THE ORDER PASSED BY THE LOWER AUTHORITIES IMPOSING -: 5: - 5 PENALTY U/S 271B, WHEN TAX AUDIT REPORT WAS OBTAINE D ON 10.10.2007 I.E. BEFORE THE DUE DATE OF FILING RETUR N WHICH WAS ON 2.11.2007 AND IN VIEW OF CBDT CIRCULAR NO. 5/200 7 DATED 26.7.2007, THE ASSESSEE WAS UNDER BONA FIDE BELIEF THAT IN CASE OF E FILING OF RETURN, THE TAX AUDIT REPORT NEED NOT BE FILED ALONGWITH RETURN. THE ISSUE IS ALSO COVERED BY THE DECISION OF B. D. LEASING AND FINANCE LIMITED (SUPRA), WHERE RE TURN OF INCOME IS FILED ELECTRONICALLY, THE TAX AUDIT REPOR T NEED NOT BE FILED ALONG WITH THE RETURN. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. THIS ORDER HAS BEEN PRONOUNCED IN THE OPEN COURT ON 10 TH APRIL, 2013. SD/- SD/- (JOGINDER SINGH) (R. C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 10 TH APRIL, 2013. CPU* 8.4