Shri Pradip Sitaram Chinakonda, Valsad V. The Income tax Officer,Ward-3, Valsad

ITA 778/AHD/2010

• Counselvise Citation: 77820514 RSA 2010
• Duration Of Justice: 1 year(s) 10 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 12-01-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 12-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G S SOURYAVANSHI
• Assessee Lawyers: R M UPADHYA

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL AT AHMEDABAD, A BENCH . .. . . .. . , !'# !'# !'# !'#, , , , $ $ $ $ . .. . . .. .%&' %&' %&' %&', , , , %( ) %( ) %( ) %( ) % # % # % # % # BEFORE S/SHRI G.C. GUPTA, VICE-PRESIDENT AND A. L. GEHLOT, ACCOUNTANT MEMBER) ITA NO.778 AND 779 /AHD/2010 [ASSTT.YEAR : 2003-2004 AND 2004-2005] SHRI PRADIP SITARAM CHINAKONDA 5/B-1, BALAJI PARK, TITHAL ROAD VALSAD 396001. /VS. ITO, WARD-3 VALSAD. ( (( (+, +, +, +, / APPELLANT) ( (( (-.+, -.+, -.+, -.+, / RESPONDENT) /' 0 1 %/ ASSESSEE BY : SHRI R.M. UPADHYA ) 0 1 %/ REVENUE BY : SHRI G.S.SOURYAVANSHI 3 0 '4(/ DATE OF HEARING : 12 TH JANUARY, 2012 5&6 0 '4(/ DATE OF PRONOUNCEMENT : 03-02-2012 %7 / O R D E R PER G.C. GUPTA, VICE-PRESIDENT: THESE APPEALS OF THE ASSESSEE FOR A.Y.2003-2004 AND 2004-2005 ARE DIRECTED AGAINS T THE ORDERS OF THE COMMISSIONER OF INCOME-TAX (APPEALS), VALSAD. THES E ARE BEING DISPOSED OF WITH THIS CONSOLIDATED ORDER. ITA NO.778/AHD/2010 : A.Y.2003-2004 2. THE ONLY GROUND RAISED IN THIS APPEAL READS AS U NDER: 1. LD.ITO HAS ERRED IN LAW AND ON FACTS TO LEVY PE NALTY AS PER ORDER UNDER SECTION 271B. CIT(A) HAS ALSO ERRED TO CONFIRM THE PENALTY ORDER. 3. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT RS.34,125/- WAS IMPOSED AS PENALTY UNDER SECTION 271B OF THE AC T FOR LATE SUBMISSIONS OF THE AUDIT REPORT BY ABOUT FIVE MONTH S. HE SUBMITTED THAT COMPUTER HARD DISK WAS AFFECTED BY VIRUS AND ALL DA TA ENTERED IN THE COMPUTER WAS LOST AND THEREAFTER THE ACCOUNTANT HAS STARTED THE JOB AGAIN ITA NO.778 AND 779 /AHD/2010 -2- TO MAKE ALL DATA ENTRIES FROM VERY BEGINNING AND TH EREFORE THE COMPLETION OF THE JOB AND SUBSEQUENT JOB OF AUDITORS TOOK FIVE MONTHS. THE RETURN OF INCOME ALONG WITH AUDIT REPORT WAS FILED ON 31.03.2 003 I.E. ON VERY SAME DAY ON GETTING AUDITORS REPORT. THE LEARNED DR HA S SUBMITTED THAT THE ASSESSEE IS IN A HABIT OF FILING ITS AUDIT REPORT L ATE AND THEREFORE HE WAS RIGHTLY PENALISED AS THE PENALTY HAS BEEN IMPOSED I N TWO CONSECUTIVE YEARS I.E. A.Y.2003-2004 AND 2004-2005 IN THE CASE OF THE ASSESSEE. HE RELIED ON THE ORDERS OF THE AO AND THE CIT(A). 4. WE HAVE CONSIDERED RIVAL SUBMISSIONS. WE FIND T HAT MERELY BECAUSE THERE WAS DELAY OF ABOUT FOUR TO FIVE MONTH S IN FILING OF THE AUDIT REPORTS FOR THE RELEVANT ASSESSMENT YEAR, IT CANNOT BE SAID THAT THE ASSESSEE IS HABITUAL DEFAULTER IN NON-COMPLIANCE OF PROVISIO NS OF SECTION 44AB OF THE ACT. THERE IS NO ADVERSE REMARK BY THE REVENUE AUTHORITIES THAT THE ASSESSEE HAS DELAYED IN FILING OF THE AUDIT REPORT IN OTHER ASSESSMENT YEARS OTHER THAN THE ASSESSMENT OF YEARS IN APPEAL BEFORE US. THE ASSESSEE HAS FILED A DETAILED EXPLANATION EXPLAINING REASON FOR DELAY AND HAS SUBMITTED THAT THE COMPUTER HARD DISK WAS AFFECTED BY VIRUS A ND ALL DATA ENTERED INTO THE COMPUTER WAS LOST AND HAD TO START THE JOB AGAI N TO MAKE ALL DATA ENTRIES FROM THE VERY BEGINNING. THESE SUBMISSIONS OF THE ASSESSEE MADE BEFORE THE AO HAS NOT BEEN CONTRADICTED BY THE AO O R THE CIT(A). IN THESE FACTS OF THE CASE, WE ARE OF THE CONSIDERED V IEW THAT THE DELAY IN FILING THE AUDIT REPORT BY FIVE MONTHS WAS DUE TO S UFFICIENT CAUSE ON THE PART OF THE ASSESSEE AND ACCORDINGLY PENALTY LEVIED UNDER SECTION 271B OF THE ACT IS CANCELLED AND THE GROUND OF THE ASSESSEE S APPEAL IS ALLOWED. 5. ITA NO.779/AHD/2010 : A.Y.2004-2005 6. THE ONLY GROUND IN THIS APPEAL READS AS UNDER: ITA NO.778 AND 779 /AHD/2010 -3- 1. THE LD.ITO HAS ERRED IN LAW AND ON FACTS TO LEV Y PENALTY AS PER ORDER U/S.271B. THE LD.CIT(A) HAS ALSO ERRED T O CONFIRM THE PENALTY ORDER. 7. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT PENALTY OF RS.31,312/- WAS LEVIED UNDER SECTION 271B OF THE AC T FOR DELAY IN FILING OF THE AUDIT REPORT UNDER SECTION 44AB OF THE ACT B Y FOUR MONTHS . HE SUBMITTED THAT THE ACCOUNTANT SHRI SUNDRI AIYER HAS LEFT THE JOB ON 18.06.2004 AND IN HIS PLACE SHRI P. HIMANI WAS APPO INTED AND HE ALSO LEFT THE JOB ON 27-8-2004 AND BOTH THESE ACCOUNTANTS HAV E NOT COMPLETED THE ACCOUNTING WORK FOR THE RELEVANT ASSESSMENT YEAR A. Y.2004-2005. THE ASSESSEE SUBMITTED THAT THE ASSESSEE HIMSELF STARTE D TO COMPLETE REMAINING WORK OF ACCOUNTING AND ALSO AUDITING AND THE AUDITORS GIVEN THEIR REPORT ON 23-2-2005 AND WITHIN 2 DAYS I.E. ON 25-2-2005, THE ASSESSEE FILED RETURN OF INCOME WITH AUDIT REPORT. THE LEARNED DR SUBMITTED THAT THE ASSESSEE IS IN A HABIT OF FILING AUDIT REPORT LATE AND IS IN FACT A HABITUAL DEFAULTER. HE RELIED ON THE ORDERS OF THE AO AND THE CIT(A). 8. WE HAVE CONSIDERED RIVALS SUBMISSIONS AND PERUSE D THE ORDERS OF THE AO AND THE CIT(A). WE FIND THAT MERELY BECAUSE THE ASSESSEE HAS FILED ITS REPORT LATE BY FOUR TO FIVE MONTHS FOR TH E TWO ASSESSMENT YEARS IN APPEAL BEFORE US, IT CANNOT BE SAID THAT THE ASSESS EE IS A HABITUAL DEFAULTER. THE REVENUE AUTHORITIES HAVE NOT STATED ANY OTHER A SSESSMENT YEAR IN WHICH THE ASSESSEE HAS MADE A SIMILAR DEFAULT OF FI LING THE AUDIT REPORT LATE UNDER SECTION 44AB OF THE ACT. THE ASSESSEE H AS FILED A DETAILED EXPLANATION FOR DELAY AND HAS SUBMITTED THAT THE AC COUNTANT OF THE FIRM HAS LEFT THE JOB ON 18-6-2004 AND THE PERSON APPOIN TED IN HIS PLACE HAS ALSO LEFT THE JOB ON 27-8-2004 AND BOTH THESE ACCOU NTANTS HAVE NOT COMPLETED THE ACCOUNTING WORK FOR THE RELEVANT ASSE SSMENT YEAR AND THE ITA NO.778 AND 779 /AHD/2010 -4- ASSESSEE HIMSELF STARTED TO COMPLETE REMAINING WORK OF ACCOUNTING AND AUDIT WORK ON 23.02.2005 AND THE AUDIT REPORT WAS F ILED ON 25-2-2005 WITHIN 2 DAYS. IN THESE FACTS, WE ARE OF THE CONSI DERED VIEW THAT THERE WAS A SUFFICIENT CAUSE WITH THE ASSESSEE FOR THE DE LAY IN FILING OF THE AUDIT REPORT OF THE AUDITORS FOR THE RELEVANT ASSESSMENT YEAR AND ACCORDINGLY PENALTY IMPOSED UNDER SECTION 271B OF THE ACT IS CA NCELLED. THIS GROUND OF THE ASSESSEES APPEAL IS ALLOWED. 9. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THE DATE MENTIONE D HEREINABOVE. SD/- SD/- ( . .. . . .. .%&' %&' %&' %&' /A.L. GEHLOT) %( ) /ACCOUNTANT MEMBER ( . .. . . .. . /G.C. GUPTA) !'# !'# !'# !'# /VICE-PRESIDENT C OPY OF THE ORDER FORWARDED TO: 1) : APPELLANT 2) : RESPONDENT 3) : CIT(A) 4) : CIT CONCERNED 5) : DR, ITAT. BY ORDER DR/AR, ITAT, AHMEDABAD