Arvindbhai S.Panchal, Aravali V. Income Tax Officer, Ward-1, Mehsana

ITA 647/AHD/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 9249 (ITAT-AHMEDABAD)
• Duration Of Justice: 10 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-02-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 01-02-2017
• Assessment Year: 2013-2014
• Appeal Filed On: 11-03-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Reasonable cause
• Section: 32; 147; 131; 68; 246; 69; 145; 27; 148; 54; 37; 6; 56; 263; 63; 132; 12; 28; 144; 10; 90; 154; 2; 11; 15; 271(1)(b); 139; 92; 201; 271B; 44AB; 119

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD I BENCH BEFORE: SHR I S. S. GODARA , JUDICIAL MEMBER AND SHRI AMARJIT SINGH, ACCOUNTANT MEMBER HARISHBHAI BABUBHAI PATEL, PROP. SHREE UMIYA TRADERS, AT & POST GABAT, TALUKA BAYAD ALEPP1692C (APPELLANT) VS THE ITO, WARD - 1, MODASA (RESPONDENT) ARVINDBH AI S. PANCHAL AT & POST PIPRANA, TALUKA - MALPUR, DIST: ARVALLI ANTPP6487E (APPELLANT) VS THE ITO, WARD - 1, MODASA (RESPONDENT) REVENUE BY : S H RI RAJDEEP SINGH , SR. D . R. ASSESSEE BY: S H RI M.K. PATEL , A.R. DATE OF HEARING : 01 - 02 - 2 017 DATE OF PRONOUNCEMENT : 09 - 02 - 2 017 I T A NO . 646 / A HD/20 16 A SS ESSMENT YEAR 2013 - 14 ITA NO . 647 /AHD/20 16 ASSESSMENT YEAR 2013 - 14 I.T.A NO S . 646 & 647 / AHD/2016 A.Y. 2013 - 1 4 PAGE NO HARISHBHAI BABUBHAI PATEL & ARVINDBHAI S. PANCHAL VS. ITO 2 / ORDER P ER : AMARJIT SINGH, ACCOUNTANT MEMBER : - THE S E TWO APPEAL S FILED BY TWO DIFFERENT ASSESSEES FOR A.Y. 2013 - 14 , AR ISE FROM ORDER OF THE CIT(A) - 2, AHMEDABAD DATED 24 - 07 - 2015 IN APPEAL NO S . CIT(A) - 2/304/ITO, WD. 1, MODASA/2014 - 15 & CIT(A) - 2/ 313/ITO, WD. 1, MODASA/2014 - 15 , IN PROCEEDINGS UNDER SECT ION 271B OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT . 2. THE ASSESSEE HAS RAISED FOLLOWING GROUND OF APPEAL: - ITA NO. 646/AHD/2016 : - THAT ON FACTS, AND IN LAW, THE LEARNED CIT (A) HAS GRIEVOUS LY ERRED IN CONFIRMING THE LEVY OF PENALTY OF RS.66,605/ - U/S.271B OF THE ACT . ITA NO. 647 /AHD/2016 : - THAT ON FACTS, AND IN LAW, THE LEARNED CIT (A) HAS GRIEVOUSLY ERRED IN CONFIRM ING THE LEVY OF PENALTY OF RS.1,01,170 / - U/S.271B OF THE ACT . 3. A S THE FACTS IN THESE TWO CASES ARE SIMILAR, WE TAKE ITA 646/AHD/2016 AS THE LEAD CASE AND DECIDE BOTH THE APPEALS ACCORDINGLY. 4. IN THIS CASE , THE ASSESSING OFFICER HAS RECEIVED INFORMATION FROM CCIT( CPC ) , BANGALO R E THAT THE ASSESSEE HAS NOT UPLOADED TH E AUDIT REPORT IN FORM 3CB/ 3CA/3CD & 3 CEB ELECTRONICALLY U/S. 44AB/92E OF THE ACT FOR ASSESSMENT Y EAR 2013 - 14 AS NOTIFIED BY THE I.T.A NO S . 646 & 647 / AHD/2016 A.Y. 2013 - 1 4 PAGE NO HARISHBHAI BABUBHAI PATEL & ARVINDBHAI S. PANCHAL VS. ITO 3 B OARD VIDE NOTIFICATION NO. 34 DATED 1 ST MAY, 2013. THEREFORE, THE ASSESSING OFFICER HAD ISSUED A SHOW CAUSE TO THE ASSESSEE R EGARDING NON - UPLOADING OF AUDIT REPORT ELECTRONICALLY. THE ASSESSING OFFICER ALSO SHOW CAUSED WHY PENALTY U/S. 271B SHOULD NOT BE INITIATED FOR NOT FILING AUDIT REPORT IN FORM 3CB/3CA/3CD & 3CEB THROUGH ELECTRONIC MODE ALONG WITH RETURN OF INCOME FOR ASSESS MENT YEAR 2013 - 14 IN COMPLIANCE WITH CBDT NOTIFICATION . IN RESPONSE TO SHOW CASE, THE ASSESSEE FILED REPLY WHICH IS REPRODUCED AS UNDER: - 5. (II) IN RESPONSE OF SHOW CAUSE THE ASSESSEE FILED HIS REPLY VIDE LETTER DATED 20/1 1/2014, BRIEF PART OF THE REPLY IS REPRODUCED AS UNDER: - THE ASSESSEE IS ENGAGED IN TRADING OF CEMENT IN THE NAME OF SHREE UMIYA TRADERS, GAHAT AND BECAUSE OF INNOVATIVE CHANGES IN E - FILING; HE IS DEPENDENT ON CA/TAX CONSULTANT. THE CBDT NOTIFIED FOLLOWING CIRCULARS : - (I) FIRST CIRCULAR: - SECTION 119 OF THE INCOME TAX ACT 1961 ~ INCOME TAX AUTHORITIES - INSTRUCTIONS TO SUBORDINATE AUTHORITIES - EXTENSION OF DUE DATE FOR FURNISHING OF REPORT OF AUDIT ELECTRONICALLY FOR A. X 2013 - 14. ORDER [F. NO. 225/117/2013/ITA.II] DATED 26/09 /2013. CBDT IN EXERCISE OF POWER UNDER SECTION 119(2)(A) OF THE I T ACT, 1961 READ WITH SECTION 139 AND RULE 12, HAS DECIDED TO RELAX THE REQUIREMENT OF FURNISHING THE REPORT OF AUDIT ELECTRONICALLY AS PRESCRIBED UNDER PROVISO TO SUB RULE (2) OF RULE 12 OF THE I T RULES FOR A. Y. 2013 - 14 (A) THE ASSESSEE, WHO ARE PRESENTLY FINDING IT DIFFICULT TO UPLOAD THE PRESCRIBED REPORTS OF AUDIT IN THE SYSTEM ELECTRONICALLY MAY ALSO FURNISH THE SAME MANUALLY BEFORE THE JURISDICTION ASSESSING OFFICER WITHIN THE PRESCR IBED DUE DATE/ (B) THE SAID REPORT OF AUDIT SHOULD HOWEVER BE FURNISHED ELECTRONICALLY ON OR BEFORE 31/10/2013. (II) SECOND, CIRCULAR: - SECTION 119 OF THE INCOME TAX ACT 1961 - INCOME TAX AUTHOR/TIES ~ INSTRUCTIONS TO SUBORDINATE AUTHORITIES - EXTENSION OF DUE DATE FOR FILING RETURNS OF INCOME FROM 30/09/2013 TO 14/10/2013 IN CASE OF ASSESSEE IN THE STATE OF GUJARAT DUE TO REPORTS OF DISLOCATION OF GENERAL LIFE CAUSED BY HEAVY RAINS AND FLOODS. I.T.A NO S . 646 & 647 / AHD/2016 A.Y. 2013 - 1 4 PAGE NO HARISHBHAI BABUBHAI PATEL & ARVINDBHAI S. PANCHAL VS. ITO 4 ORDER [F. NO. 225/117/2013/ITA.II] BATED 30/09/2013. FURTHER, T HE ASSESSEE STATED THAT THE DUE DATE FOR FILING AUDIT REPORT WAS EXTENDED TILL 30 OCTOBER 2013 DUE TO SYSTEM ISSUE IN VIEW OF FIRST CIRCULAR. THIS CIRCULAR ITSELF ADMITS DIFFICULTY OF ALL ASSESSEE' S AT LARGE. IN VIEW OF SECOND CIRCULAR, DUE DATE FOR FILIN G RETURN - OF INCOME WAS EXTENDED FROM 30/09/2014 TO 14/10/2014 DUE TO HEAVY RAIN AND FLOOD SITUATION IN GUJARAT. FROM ABOVE WE SUBMIT THAT IN SPIRIT OF CIRCULAR WE HAVE FILED TAX AUDIT REPORT WITH YOUR OFFICE AND SUBSEQUENT COMPLIANCE WAS AT MERCY OF CA, H AVING SAID THAT ASSESSEE LIKE ME SHOULD NOT BE PENALIZED FOR SOMEBODY'S FAULT WHICH IS OTHERWISE VERIFIABLE, FROM PHYSICAL FILING. UNDER SEC 271B, ASSESSING OFFICE MAY IMPOSE THE PENALTY IF HE IS NOT SATISFIED THAT ASSESSEE WAS PREVENTED BY BONAFIDE REASON ABLE CIRCUMSTANCES. YOUR HONOUR WILL AGREE THAT THERE IS BIG REASON AT MY END AS STATED ABOVE AND SUCH I HAVE SUBMITTED TAX AUDIT REPORT PHYSICALLY IN YOUR OFFICE 30/09/2013 AND THIS FACT HAS BEEN ADMITTED IN FIRST PARA OF SHOW CAUSE NOTICE. IN VIEW OF ABO VE KINDLY TAKE SYMPATHETIC VIEW AND DROP THE PENAL ACTION U/S 271B FOR WHICH ACTION WE SHALL BE THANKFUL TO YOU. THE ASSESSEE S EXPLANATION FOR NON UPLOADING OF AUDIT REPORT BECAUSE OF PROBL EM FACED IN THE SYSTEM AND THE CONTENTION THAT SEC OND CIRCULAR ISSUED BY THE CBDT EXTENDING THE DUE DATE OF FILING OF RETURN OF INCOME FROM 30 TH SEP, 2013 TO 14 TH OCT, 2013 IMPLICIT THE DIFFICULTY IN UPLOADING THE AUDIT REPORT WAS NOT ACCEPTED BY THE ASSESSING OFFICER . THEREFORE, HE IMPOSED A MINIMUM PENALTY OF RS. 66,605/ - FOR FAILURE TO UPLOADING ITS AUDIT REPORT ELECTRONICALLY. AGGRIEVED AGAINST THE ORDER OF THE ASSESSING OFFICER, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) HAS CONFIRMED THE PENALTY LEVIED BY THE ASSESSING OFFICER STAT ING AS UNDER: - 2. 3. DECISION: I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, THE PENALTY ORDER AND THE WRITTEN SUBMISSION OF THE APPELLANT. THE AO HAS LEVIED THE PENALTY FOR NOT FURNISHING OF THE AUDIT REPORT IN FORM NO. 3CB /'3CA I.T.A NO S . 646 & 647 / AHD/2016 A.Y. 2013 - 1 4 PAGE NO HARISHBHAI BABUBHAI PATEL & ARVINDBHAI S. PANCHAL VS. ITO 5 / 3CD & 3CEB ELE CTRONICALLY U/S. 44AB OF THE I. T. ACT FOR THE YEAR UNDER CONSIDERATION AS NOTIFIED BY THE CBDT VIDE NOTIFICATION NO. 34/2013/F.NO. 142/5/2013 - TPL DATED 01/05/2013. IT IS WORTH HERE TO MENTION THAT AS PER THE AFORESAID NOTIFICATION, W.E.F. 01/04/2013, WHER E THE ASSESSEE WAS REQUIRED TO FURNISH THE REPORT OF AUDIT U/S. 44AB, HE SHOULD HAVE FURNISHED THE SAME ELECTRONICALLY. THEREAFTER, DUE TO CBDT'S ANOTHER NOTIFICATION ORDER VIDE F.NO. 225/117/2013/ITA - LL DATED 26/09/2013, THE DUE DATE FOR FILING THE AUDIT REPORT ELECTRONICALLY WAS EXTENDED UP TO 31/10/2013. THE RELEVANT EXTRACTS OF BOTH THE NOTIFICATIONS HAVE BEEN REPRODUCED BY THE AO IN THE PENALTY ORDER. IN THE PENALTY PROCEEDINGS BEFORE THE AO, THE APPELLANT SUBMITTED THAT IT HAS SUBMITTED THE AUDIT REPO RT MANUALLY ON 30/09/2013 AND NOT UPLOADED ELECTRONICALLY U/S. 44AB OF THE ACT, AS DESIRED VIDE NOTIFICATIONS ISSUED BY THE CBDT. THERE WAS NO REASONABLE CAUSE WITH THE APPELLANT TOR NON FILING OF THE AUDIT REPORT ELECTRONICALLY. THE APPELLANT SIMPLY CONTE NDED THAT DUE TO THE DIFFICULTY IN MANAGING THE AFFAIRS AT THE MERCY OF TAX CONSULTANT AND CAS WHOSE WORKING WERE SOMETIMES NOT ACCESSIBLE TO THE APPELLANT, HE COULD NOT UPLOAD THE AUDIT REPORT. EXCEPT TO TAKE THE SYMPATHETIC VIEW, HE HAS NOT GIVEN ANY CON VINCING REASONS THROUGH WHICH HE WAS PREVENTED IN UPLOA DING THE AUDIT REPORT. WHEN THE APPELLANT COULD SUBMIT HIS RETURN OF INCOME ELECTRONICALLY, THEN THERE WAS NO REASON NOT TO SUBMIT THE AUDIT REPORT ELECTRONICALLY. MERELY DUE TO FAULT ON THE PART OF CA AND AR OF THE APPELLANT, IT COULD NOT BE SAID THAT THERE WAS THE REASONABLE CAUSE LEFT WITH APPELLANT FOR NOT TO SUBMIT THE AUDIT REPORT ELECTRONICALLY. IN VIEW OF THE AFORESAID DISCUSSION, THE LEVY OF PENALTY BY THE AO IS CORRECT AND JUSTIFIED FOR THE RE ASON THAT THE APPELLANT HAS NOT COMPLIED WITH THE REQUIREMENT OF THE NOTIFICATIONS THROUGH WHICH INITIALLY THE AUDIT REPORT WAS TO BE UPLOADED UP TO 30/09/2013, AND EVEN THROUGH THE ANOTHER NOTIFICATION DATE OF UPLOADING EXTENDED UP TO 31/10/2013. EVEN, TH ERE IS NO JUSTIFIABLE REASON WITH THE APPELLANT IN MAKING SUCH A LEGAL DEFAULT. THUS, THE LEVY OF PENALTY BY THE AO IS CONFIRMED. THE GROUND OF APPEAL IS ACCORDINGLY DISMISSED. 5. DURING THE COURSE OF APPELLATE PROCEEDINGS BEFORE US, LEARNED COUNSEL HAS CONTENDED THAT ASSESSEE COULD NOT UPHOLD THE AUDIT REPORT ELECTRONICALLY BECAUSE OF DIFFICULTIES FACED AT THE INITIAL PERIOD OF INTRODUCTION OF NEW SYSTEM OF UPLOADING THE AUDIT REPORT I.T.A NO S . 646 & 647 / AHD/2016 A.Y. 2013 - 1 4 PAGE NO HARISHBHAI BABUBHAI PATEL & ARVINDBHAI S. PANCHAL VS. ITO 6 ELECTRONICALLY. ON THE OTHER HAND, LD. DEPARTMENTAL REPRESENTATIVE RE LIED ON THE ORDER OF CIT(A). 6. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT ASSESSEE HAS FILED RETURN OF INCOME BY WAY OF E - FILING ON 7 TH FEB, 2014 FOR THE ASSESSMENT YEAR 2 013 - 14. THE CBDT ISSUED NOTIFICATION NO. 34 ON 1 ST MAY, 2013 EFFECTIVE FROM 01 - 04 - 2013 AS PER WHICH ASSESSEE WAS REQUIRED TO UPLOAD A REPORT OF AUDIT ELECTRONICALLY. THE LD. CIT(A) STATED THAT THERE W A S NO REASONABLE CAUSE WITH THE A SSESSEE FOR NON - FILING OF THE AUDIT REPORT ELECTRONICALLY. IN TH IS CONNECTION, WE OB SERVED THAT THE ON LINE FILI N G OF AUDIT REPORT U/S. 44AB WAS NEWLY INTRODUCED DURING THE YEAR UN D ER CONSIDERATION BECAUSE OF WHICH THE ASSESSEE HAD FACED DIFFICULTY IN UPLOADING THE AUDIT REPORT ELECTRONICALLY IN THE SYSTEM. THE ISSUING OF THE TWO CIRCULAR S BY THE CBDT IMPLICIT CONSTRAINT AND ELUCIDATE THE HICCUP IN UPLOADING THE PRESCRIBED REPORTS OF AUDIT IN THE SYSTEM ELECTRONICALLY . WE ALSO NOTICED THAT THE ASSESSEE HAD SUBMITTED THE AUDIT REPORT ON 30/09/2013 MANUALLY WITHIN T HE DU E DATE WHICH COULD NOT BE UPLOADED ELECTRONICALLY BECAUSE OF THE REASONS STATED SUPRA IN THIS ORDER. THE ABOVE STATED FACTS AND FINDINGS INDEED INDICATE THAT THERE WAS A BONAFIDE REASONABLE CAUSE FOR NOT UPLOADING THE AUDIT REPORT ELECTRONICALLY BY THE A SSESSEE, THEREFORE, AS PER OUR CONSIDERED OPINION THE LD. CIT(A) IS NOT JUSTIFIED IN SUSTAINING THE PENALTY LEVIED BY THE ASSESSING OFFICER . I.T.A NO S . 646 & 647 / AHD/2016 A.Y. 2013 - 1 4 PAGE NO HARISHBHAI BABUBHAI PATEL & ARVINDBHAI S. PANCHAL VS. ITO 7 7. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASSESSEES ARE ALLOWED. ORDER PR ONOUNCED IN TH E OPEN C OURT ON 09 - 02 - 201 7 SD/ - SD/ - ( S.S. GODARA ) ( AMARJIT SINGH ) JUDICIAL MEMBER ACCOUNTANT MEMBER AHMEDABAD : DATED 09 /02 /2017 / COPY OF ORDER FORWARDED TO: - 1. ASSESSEE 2. REVENUE 3. CONCERNED CIT 4. CIT (A) 5. DR, ITAT, AHMEDABAD 6. GUARD FILE. BY ORDER/ , / ,