VJAY FOOD PRODUCTS, Ajmer V. ITO, Ajmer

ITA 707/JPR/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 9666 (ITAT-JAIPUR)
• Duration Of Justice: 8 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-03-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 29-03-2017
• Assessment Year: 2013-2014
• Appeal Filed On: 11-07-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: R A VERMA ADD CIT DHK
• Assessee Lawyers: SUBHASH PORWAL
• Keywords: Bonafide belief
• Section: 139

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHE S, JAIPUR JH DQY HKKJR] U;KF;D LNL; ,OA JH FOE FLAG ;KNO] YS [KK LNL; DS LE{K BEFORE: SHRI KUL BHARAT, JM & SHRI VIKRAM SINGH YAD AV, AM VK;DJ VIHY LA-@ ITA NO.707/JP/16 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14 M/S VIJAY FOOD PRODUCTS, HMT INDUSTRIAL AREA, BEAWAR ROAD, AJMER CUKE VS. THE ITO, WARD 1(3), AJMER LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN NO. AAAFV 8690 H VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY : SHRI SUBHASH PORWAL (CA) JKTLO DH VKSJ LS@ REVENUE BY : SHRI R.A.VERMA (ADD. CIT ) LQUOKBZ DH RKJH[K@ DATE OF HEARING : 29 .03.2017 ?KKS'K .KK DH RKJH[K @ DATE OF PRONOUNCEMENT: 31/03/2017. VKNS'K@ ORDER PER SHRI VIKRAM SINGH YADAV, A.M. THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF LD.CIT(A), AJMER DATED 09.06.2016 WHEREIN THE ASSES SEE HAS CHALLENGED THE LEVY OF PENALTY OF RS.77,170/- U/S 271B READ W ITH SECTION 274(1) OF THE ACT. 2. BRIEFLY THE FACTS OF THE CASE ARE THAT THE AO OBSER VED THAT THE ASSESSEE HAS E-FILED ITS RETURN OF INCOME ON 18.09.2013 FOR THE SUBJECT ASSESSMENT YEAR BUT THE AUDIT REPORT IN FORM NO. 3CA/3CB,3CD AND 3C EB HAS NOT BEEN SUBMITTED IN ELECTRONIC FORM AS PER NOTIFICATION NO . 34 DATED 01.05.2013 ISSUED BY THE CBDT AND A SHOW CAUSE NOTICE FOR LEVY OF PENALTY U/S 271B OF THE ACT WAS ISSUED TO THE ASSESSEE. IN RESPONSE TO TH E SHOW-CAUSE NOTICE, THE ITA NO. 707/JP/16 M/S VIJAY FOOD PRODUCTS, AJMER VS. ITO, WARD 1(3), AJMER 2 ASSESSEE HAS SUBMITTED THAT IT HAS OBTAINED THE T AX AUDIT REPORT ON 04.09.2013 FROM ITS AUDITOR M/S SUNIL PORWAL & CO. AND THE PARTICULARS ABOUT THE TAX AUDIT REPORT WERE ALSO FURNISHED IN THE INC OME TAX RETURN WHICH WAS E- FILED ON 18.09.2013. IT WAS FURTHER SUBMITTED THA T DUE TO SOME TECHNICAL SNAG IN THE E-FILING SYSTEM OF TAX DEPARTMENT, THE AUDIT REPORT FILED SEEMS NOT BEEN REFLECTED IN THE SYSTEM. HOWEVER, THE SAID SUBMI SSION OF THE ASSESSEE DID NOT FIND FAVOUR WITH THE AO AND HE HELD THAT THE ASSESS EE HAS FAILED TO FURNISH REPORT OF AUDITOR BEFORE DUE DATE AS PRESCRIBED U/S 139 AND IMPOSED A PENALTY OF RS. 77,170/- UNDER SECTION 271B OF THE ACT. 2.1 BEING AGGRIEVED, THE ASSESSEE CARRIED THE MAT TER IN APPEAL BEFORE THE LD.CIT(A), THE LD. AR REITERATED ITS SUBMISSION MA DE BEFORE THE AO AND SUBMITTED THAT THE E-RETURN FILED ON 18.09.2013 IS BASED ON THE AUDIT REPORT AND THE AUDITED FINANCIAL STATEMENTS, AND THE NECES SARY PARTICULARS ABOUT THE AUDIT REPORT HAVE BEEN DISCLOSED AS PART OF THE E-R ETURN FILED ELECTRONICALLY. IT WAS FURTHER SUBMITTED THAT DUE TO TECHNICAL SNAG I N THE E-FILING SYSTEM OF TAX DEPARTMENT, THE INCOME TAX RETURN ALONGWITH AUDIT R EPORT WAS UPLOADED AND FILED, HOWEVER, THE AUDIT REPORT COULD NOT BE VIEW ED BY THE AO DUE TO SOME SYSTEM TECHNICAL ERRORWHICH IS BEYOND THE CONTROL O F THE ASSESSEE. THE CONTENTIONS OF THE LD. AR DID NOT FIND FAVOUR WITH THE LD. CIT(A) AND HE HAS HELD THAT THE APPELLANT HAS NOT BEEN ABLE TO SHOW THAT IT HAD FILED AUDIT REPORT OBTAINED U/S 44AB FOR THE YEAR UNDER CONSIDERATION. FURTHER, IN SUPPORT OF THE CONTENTIONS OF THE APPELLANTTHAT AUDIT REPORT COULD NOT BE UPLOADED DUE TO SOME TECHNICAL SNAG, NO DOCUMENTARY EVIDENCE HAS BE EN SUBMITTED. IN VIEW OF THE SAME, THE LEVY OF PENALTY U/S 271B FOR NON-F ILING OF AUDIT REPORT WAS CONFIRMED. ITA NO. 707/JP/16 M/S VIJAY FOOD PRODUCTS, AJMER VS. ITO, WARD 1(3), AJMER 3 2.2 AGAINST THE SAID ORDER OF THE LD. CIT(A), THE A SSESSEE HAS NOW COME IN APPEAL BEFORE THIS BENCH. THE LD. AR REITERATED THE SUBMISSION MADE BEFORE THE LOWER AUTHORITIES AND DRAWN OUR ATTENTION TO T HE RETURN OF INCOME E-FILED ON 18.09.2013 WHEREINPARTICULARS RELATING TO AUDIT INFORMATIONHAS BEEN DISCLOSED WHICH READ AS UNDER: WHETHER LIABLE TO MAINTAIN ACCOUNTS AS PER SECTIO N 44AA Y WHETHER LIABLE FOR AUDIT U/S 44AB Y IF (B) IS YES, WHETHER THE ACCOUNTS HAVE BEEN AUDITED BY AN ACCOUNTANT? IF YES FURNISH THE FOLLOWING INFORMATION. A. DATE OF FURNISHING OF THE AUDIT REPORT (DD/MM/YYYY) 2013-09-18 B. NAME OF THE AUDITOR SIGNING THE TAX AUDIT REPO RT SUNIL PORWAL C. MEMBERSHIP NO. OF THE AUDITOR 071805 D. NAME OF THE AUDITOR (PROPRIETORSHIP/ FIRM) M/S S UNIL PORWAL & CO. E. PERMANENT ACCOUNT NUMBER (PAN) OF THE PROPRIETORSHIP/FIRM ACEPP3552C F. DATE OF AUDIT REPORT 2013-09-04 2.3 FURTHER, THE LD. AR HAS DRAWN OUR REFERENCE TO THE DECISION OF HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. VS. STATE OF ORISSA (83 ITR 26) WHEREIN IT WAS HELD THAT THE PENALTY WILL NOT O RDINARILY BE IMPOSED UNLESS THE PARTY OBLIGED EITHER ACTED DELIBERATELY IN DEFI ANCE OF LAW OR WAS GUILTY OF CONDUCT CONTUMACIOUS OR DISHONEST, OR ACTED IN CO NSCIOUS DISREGARD TO ITS OBLIGATION. PENALTY WILL NOT BE IMPOSED MERELY BE CAUSE IT IS LAWFUL TO DO SO. WHETHER PENALTY SHOULD BE IMPOSED FOR FAILURE TO PERFORM A STATUTORY OBLIGATION IS A MATTER OF DISCRETION OF THE AUTHO RITY TO BE EXERCISED JUDICIALLY AND ON A CONSIDERATION OF ALL THE RELEVANT CIRCUMS TANCES. EVEN IF A MINIMUM ITA NO. 707/JP/16 M/S VIJAY FOOD PRODUCTS, AJMER VS. ITO, WARD 1(3), AJMER 4 PENALTY IS PRESCRIBED THE AUTHORITY COMPETENT TO IMPOSE THE PENALTY WILL BE JUSTIFIED IN REFUSING TO IMPOSE PENALTY WHEN THER E IS A TECHNICAL OR VENIAL BREACH OF THE PROVISIONS OF THE ACT OR WHERE THE BREACH FLOWS FROM A BONAFIDE BELIEF THAT THE OFFENDER IS NOT LIABLE TO ACT IN THE MANNER PRESCRIBED BY THE STATUTE. 2.4 IT WAS FURTHER SUBMITTED BY THE LD AR THAT AS SOON AS THE ASSESSEE BECAME AWARE ABOUT THE TECHNICAL SNAG REGARDING TAX AUDIT REPORT IN E-FILING SYSTEM OF TAX DEPARTMENT, THE TAX AUDIT REPORT HAS BEEN FRESHLY UPLOADED IN THE INCOME TAX SYSTEM AND A HARD COPY THEREOF FILED WITH THE AO. IT WAS ACCORDINGLY SUBMITTED THAT THE RETURN OF INCOME HAS BEEN FILED BASED ON THE TAX AUDIT REPORT AND THE TAX AUDIT REPORT BOTH ELEC TRONICALLY AND HARD COPY HAS BEEN DULY SUBMITTED WITH THE AO. 2.5 THE LD. DR IS HEARD WHO HAS RELIED ON THE ORDE R OF THE LOWER AUTHORITIES. 2.6 WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE RETURN OF INCOME HAS BEEN ELECTRONIC ALLY FILED BY THE ASSESSEE ON 18.09.2013 WHEREIN THE PARTICULARS REGARDING THE AUDIT REPORT HAVE BEEN DULY DISCLOSED BY THE ASSESSEE. IN THE SAID RETURN IT HAS BEEN STATED CLEARLY THAT MR. SUNIL PORWAL, THE AUDITOR OF THE COMPANY HAS SI GNED THE AUDIT REPORT ON 04.09.2013 AND THE SAID AUDIT REPORT HAS BEEN FURNI SHED ON 18.09.2013. THE SAID INCOME TAX RETURN WHICH HAS BEEN FILED ELECTRO NICALLY AND CONTENTS THEREOF INCLUDING THE AUDIT PARTICULARS HAVE NOT BEEN DISPU TED BY THE REVENUE. IT IS THEREFORE NOT IN DISPUTE THAT THE AUDIT REPORT HAS BEEN OBTAINED BEFORE DUE DATE OF FILING OF THE RETURN OF INCOME AND THE PART ICULARS THEREOF HAVE BEEN DULY DISCLOSED IN THE RETURN OF INCOME ELECTRONICAL LY FILED. IT WAS FURTHER SUBMITTED BY THE LD AR THAT THE AUDIT REPORT IN FOR M 3CB/3CD HAS BEEN ITA NO. 707/JP/16 M/S VIJAY FOOD PRODUCTS, AJMER VS. ITO, WARD 1(3), AJMER 5 UPLOADED ON THE SAME DATE IE, 18.9.2013 AS DATE OF FILING OF THE RETURN OF INCOME BUT DUE TO SOME TECHNICAL SNAG IN THE E-FILI NG SYSTEM OF I.T SYSTEM, THE SAME COULD NOT BE VIEWED LATER ON BY THE AO, AT THE SAME TIME, THE LD AR HAS NOT BEEN ABLE TO FURNISH ANY CONFIRMATION THAT THE AUDIT REPORT HAS BEEN UPLOADED ELECTRONICALLY ON 18.09.2013. IT IS ALSO A FACT THAT THE AUDIT REPORT HAS SUBSEQUENTLY BEEN UPLOADED AFRESH AFTER THE ASS ESSEE BECOME AWARE OF THE TECHNICAL SNAG AND ALSO A HARD COPY HAS BEEN FU RNISHED BEFORE THE AO WHICH IS AGAIN NOT DISPUTED BY THE REVENUE. THE INT ENTION BEHIND CARRYING OUT THE AUDIT U/S 44AB AND FURNISHING A COPY OF THE AUD IT REPORT TO THE AO IS TO AID AND ASSIST THE LATTER IN COMPLETING THE ASSESSMENT PROCEEDINGS. IT IS NOT THE CASE OF THE REVENUE THAT ANY PREJUDICE OR HINDRANCE IS CAUSED TO THE REVENUE OR THE AUDIT REPORT HAS BEEN FILED AFTER THE CLOSE OF THE ASSESSMENT PROCEEDINGS. TAKING INTO CONSIDERATION THE INTENTI ON OF THE LEGISLATURE, AND THE FACT THAT THE AUDIT REPORT HAS SUBSEQUENTLY BEEN UP LOADED ELECTRONICALLY AND ALSO HARD COPY HAS BEEN FURNISHED BEFORE THE AO BEF ORE THE COMPLETION OF THE ASSESSMENT PROCEEDINGS, NON FURNISHING OF THE RETUR N ELECTRONICALLY ON 18.09.2013 IS MERELY A TECHNICAL BREACH OF THE PROV ISIONS OF THE ACT AND RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF HINDUSTAN STEEL LTD. VS. STATE OF ORISSA (SUPRA), P ENALTY LEVIED U/S 271B OF THE ACT IS HEREBY DIRECTED TO BE DELETED. IN THE RESULT THE APPEAL FILED BY THE ASSESSEE IS A LLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 31/03/ 2017. SD/- SD/- (KUL BHARAT ) (VIKRAM SINGH YADAV) U;KF;D LNL;@ JUDICIAL MEMBER YS[KK LNL;@ ACCOUNTANT MEMBER ITA NO. 707/JP/16 M/S VIJAY FOOD PRODUCTS, AJMER VS. ITO, WARD 1(3), AJMER 6 JAIPUR DATED:- 31/03/2017 VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- M/S VIJAY FOOD PRODUCTS. AJMER 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD 1(3), AJMER 3. VK;DJ VK;QDR@ CIT AJMER 4. VK;DJ VK;QDRVIHY@ THE CIT(A) AJMER 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO.707/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ@ ASSISTANT. REGISTRAR.