GOVIND GARG, KEKRI V. ITO, Ajmer

ITA 781/JPR/2016

• Counselvise Citation: [2017] 130 COUNSELVISE.COM (IT) 5613 (ITAT-JAIPUR)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2013-2014
• Appeal Filed On: 30-08-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: POONAM RAI DCIT DR DHK
• Keywords: Reasonable cause
• Section: 6

Judgement Text

VK;DJ VIHYH; VF/KDJ.K] T;IQJ U;K;IHB] T;IQJ IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES (SMC), JAIPUR JH HKKXPUN] YS[KK LNL; DS LE{K BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER VK;DJ VIHY LA-@ ITA NO. 781/JP/2016 FU/KZKJ.K O'K Z@ ASSESSMENT YEAR : 2013-14 SHRI GOVIND GARG PROP.: M/S. GARG ENTERPRISES NEAR CLOCK TOWER, JUNIA GALI ROAD KEKRI CUKE VS. THE ITO WARD- 2(3) AJMER LFKK;H YS[KK LA-@THVKBZVKJ LA-@ PAN/GIR NO .: AAVPG 2167 K VIHYKFKHZ@ APPELLANT IZR;FKHZ@ RESPONDENT FU/KZKFJRH DH VKSJ LS@ ASSESSEE BY: WRITTEN SUBMISSION JKTLO DH VKSJ LS@ REVENUE BY: SMT. POONAM RAI, DCIT- DR LQUOKBZ DH RKJH[K@ DATE OF HEARING : 25/01/2017 ?KKS'K .KK DH RKJH[K@ DATE OF PRONOUNCEMENT : 31 /01/2017 VKNS'K@ ORDER PER BHAGCHAND, AM THE ASSESSEE HAS FILED AN APPEAL AGAINST THE ORDE R OF THE LD. CIT(A) , AJMER DATED 13-06-2016 FOR THE ASSESSMENT YEAR 2013-14 REGARDING CONFIRMING THE PENALTY OF RS. 83,574/- U/S 271B R.W .S. 274 BY THE LD. CIT(A). 2.1 APROPOS SOLITARY GROUND OF THE ASSESSEE, THE FA CTS AS EMERGES FROM THE ORDER OF THE LD. CIT(A) IS AS UNDER:- ITA NO.781/JP/2016 SHRI GOVIND GARG VS. ITO, WARD- 2 (3), AJMER 2 4.3 I HAVE GONE THROUGH THE PENALTY ORDER, STATEM ENT OF FACTS, GROUNDS OF APPEAL AND WRITTEN SUBMISSION CAREFULLY. IT IS SEEN THAT THE APPELLANT HAS NOT BEEN ABLE TO SHOW THAT IT HAD FILED THE AUDIT REPORT OBTAINED U/S 44AB FOR TH E A.Y. 2013-14. THE CONTENTION OF THE APPELLANT THAT THE A UDIT REPORT COULD NOT BE UPLOADED DUE TO SOME TECHNICAL PROBLEM IS ALSO NOT SUPPORTED WITH ANY DOCUMENTARY EVIDENCE. THEREF ORE, THIS CONTENTION OF APPELLANT IS ALSO NOT FOUND ACCE PTABLE. NO OTHER REASONABLE CAUSE FOR NON-SUBMISSION OF THE AU DIT REPORT HAS BEEN GIVEN BY THE APPELLANT. IN VIEW OF THESE F ACTS, I AM OF THE CONSIDERED VIEW THAT THE AO HAS RIGHTLY LEVI ED THE PENALTY U/S 271B FOR NON-FILING OF AUDIT REPORT AS REQUIRED U/S 44AB. ACCORDINGLY, THE PENALTY LEVIED BY THE AO IS CONFIRMED. 2.2 NONE APPEARED ON BEHALF OF THE ASSESSEE IN SPIT E OF NOTING THE DATE OF NEXT DATE OF HEARING I.E. 25-01-2017 ON 22-12-20 16. CONSEQUENTLY THE BENCH IS LEFT WITH NO ALTERNATIVE BUT TO DECIDE THE APPEAL ON MERITS, EX PARTE QUA THE ASSESSEES WRITTEN SUBMISSION, AFTER HEARING LD. DR AND AFTER PERUSAL OF THE MATERIALS AVAILABLE ON RECORD. THE F ACTS RELATING TO THE ISSUE IN QUESTION IS SUBMITTED BY THE ASSESSEE IN HIS WRI TTEN SUBMISSION IS AS UNDER:- 1 THE ASSESSEE MR. GOVIND GARG HAD GOT HIS ACCOUN TED AUDITED BEFORE DUE DATE OF FILING OF ITR (DUE DATE WAS 30-09- 2013 THAT WAS EXTENDED UPTO 31 ST OCT. BY CBDT FOR ASSESSMENT YEAR 2013-14) AND OBTAINED A PHYSICAL CO PY OF THE AUDIT REPORT ON 24-09-2013. 2. AFTER HE FILED HIS ITR ON LINE ON 1-10-2013 BEFO RE THE EXTENDED DUE DATE OF FILING THE ITR , ALONGWITH THE COPY OF AUDITED FINANCIAL ACCOUNTS DULY SIGNED BY THE AUDIT OR, AS ATTACHMENT TO ON-LINE ITR. ITA NO.781/JP/2016 SHRI GOVIND GARG VS. ITO, WARD- 2 (3), AJMER 3 3. HE ADDED THE NAME OF THE CONCERNED AUDITOR TO TH E INCOME TAX POTAL FOR SUBMISSION OF THE TAX AUDIT RE PORT AND NOW IT WAS THE TURN OF THE AUDITOR TO FILE THE AUDI T REPORT ONLINE UNDER HIS DIGITAL SIGNATURE AND IT WAS NOT I N THE CONTROL OF THE ASSESSEE TO DO ANYTHING FURTHER IN T HIS REGARD. HOWEVER, THE AUDITOR FAILED TO FILE THE AUDIT REPO RT ONLINE WHEN THE FACT OF NON-FILING OF AUDITORS REPORT CAME TO ASSESSEE'S NOTICE, IT WAS EXPLAINED BY THE AUDITORS TO HIM THAT IT WAS FIRST TIME WHEN THE AUDIT REPORT U/S 44AB WA S TO BE FILED ON LINE UNDER HIS DSC AND THE SOFTWARE UTILIT Y WAS BEING UPDATE VERY FREQUENTLY BY THE IT DEPARTMENT A ND THERE HAD BEEN OCCURRING SOME TECHNICAL PROBLEMS IN FLING THE E- AUDIT REPORT ONLINE AND IT WAS UNDERSTOOD BY THE AU DITORS THAT THE REPORT WAS SUBMITTED ONLINE BUT ACTUALLY THE SA ME WAS UNFURNISHED TO THE SYSTEM AND THERE WAS NO CONSCIOU S BREACH OF LAW ON HIS PART. 4. THE ASSESSEE HAS ALSO NOT BREACHED THE LAW CONSCIOUSLY AND IN VIEW OF THE RATIO LAID DOWN BY T HE HON'BLE APEX COURT IN THE CASE OF HINDUSTAN STEEL L TD. VS. STATE OF ORISSA ON 4 TH AUG. 1969 CITATIONS 1970 AIR 253, 1970 SCR (1) THAT IN CASE THERE IS NO CONSCIOUS BRE ACH OF LAW, IMPOSING PENALTY IS NOT JUSTIFIED, HENCE THE P ENALTY LEVIED U/S 271B IN THIS CASE IS NOT JUSTIFIED IN LA W. 5. IT IS UNDISPUTED FACT THAT THE ASSESSEE HAS SUBM ITTED THE ITR ON LINE FOR CONCERNED YEAR AND ATTACHED THE COP IES OF AUDITED FINANCIAL STATEMENT ON LINE, THERE HAS BEEN CHANGE IN THE INCOME IN THE ITR SINCE THEN WHICH IS BASED ON THE AUDITED FINANCIAL STATEMENTS, THERE HAS BEEN NO SEC URITY UNDERTAKEN IN THIS BY THE INCOME TAX DEPARTMENT, AS SUCH THE INCOME RETURNED BY THE ASSESSEE HAS BEEN ACCEPTED T HAT PROVES THAT THERE IS NOTHING CONSCIOUS N PART OF TH E ASSESSEE WHICH HELD HIM BACK FROM FILING THE AUDIT REPORT ON LINE. 6. ON CONTINUOUS PURSUANCE BY THE ASSESSEE THE REPO RT HAS ALSO BEEN FILED ONLINE LATER ON BY THE AUDITORS , COPY ENCLOSED AS PAGE NO. 3 TO 11, THE PERUSAL OF THE RE PORT REVEAL THAT THERE IS NO NEGATIVE REMARKS, OBSERVATION OR QUALIFICATION IN THE REPORT THAT ALSO PROVE THE INT EGRITY OF THE ITA NO.781/JP/2016 SHRI GOVIND GARG VS. ITO, WARD- 2 (3), AJMER 4 ASSESSEE AND PROVES THAT NON-FILING OF THE SAME ON TIME WAS NOT DONE CONSCIOUSLY, MOREOVER, IT WAS TO BE FILED BY THE AUDITORS DURING THIS DIGITAL SIGNATURES AND HE HAD NO CONTROL IN THIS PROCESS. 7. THE ABOVE FACTS WERE ALSO EXPLAINED TO THE AO AN D THE LD. CIT(A) WHICH HAVE ELABORATELY BEEN REPRODUCED I N PARA 4.2 OF THE ORDER OF THE LD. CIT(A) AND REMAINED UND ISPUTED BY THE AUTHORITIES BELOW AS WELL AS BY THE ASSESSEE , THE PENALTY WAS IMPOSED BY THE AO IRRESPECTIVE OF THE A BOVE FACTS THAT PROVES THE BONA FIDE OF THE ASSESSEE. TH E PENALTY WAS SUSTAINED BY THE LD. CIT(A) UNDER THE PLEA THAT THE ASSESSEE COULD NOT PRODUCE THE EVIDENCE TO SUPPORT THAT THE REPORT COULD NOT BE UPLOADED FOR TECHNICAL REASONS, THOUGH IT REMAINED UNCONSIDERED THAT IT WAS NOT THE FAULT OR MISCONDUCT BY THE ASSESSEE, IT WAS NOT FILED BY THE AUDITOR FOR WHATSOEVER REASON, FOR THAT THE ASSESSEE COULD NOT BE PENALIZED. 2.3 I HAVE HEARD THE LD. DR AND PERUSED THE MATERIALS A VAILABLE ON RECORD INCLUDING THE WRITTEN SUBMISSION OF THE ASSE SSEE. IT IS NOT IMPERATIVE TO REPEAT THE FACTS OF THE CASE AS THE S AME HAD BEEN EXPLICITLY NARRATED BY THE LOWER AUTHORITIES. IT IS NOTED THAT SIMILAR TYPE OF ISSUE HAS ALREADY BEEN DECIDED BY THIS BENCH IN THE CASE OF SMT. RAJ KUMAR BAFNA VS. ITO (ITA NO. 837/JP/2016 FOR THE ASSESSMENT YEA R 2013-14 VIDE ORDER DATED 14-12-2016) WHEREIN THE BENCH HAD ALLO WED THE APPEAL OF THE ASSESSEE ON THE ISSUE OF IMPOSING PENALTY U/S 2 71B OF THE ACT BY OBSERVING AS UNDER:- ITA NO.781/JP/2016 SHRI GOVIND GARG VS. ITO, WARD- 2 (3), AJMER 5 2.5 I HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE MATERIALS AVAILABLE ON RECORD. IT IS NOTED FROM THE RECORDS THAT THE ASSESSEE HAD NOT UPLOADED THE AUDIT REPORT ON E-FILING PORTAL IN ELECTRONIC MODE FOR WHICH THE AO IMPOSED THE PENALTY OF RS. 1.50 LACS U/S 271B OF THE ACT WHICH HAD ALSO BEEN CONFIRMED BY THE LD. CIT(A). IT IS NOTICED FRO M THE RECORDS THAT THE ASSESSEE HAD FILED THE RETURN OF I NCOME FOR THE ASSESSMENT YEAR 2013-14 ON 21-06-2013 ELECTRONI CALLY AND THE ASSESSEE GOT HER ACCOUNTS AUDITED ON 12-06- 2013. IT IS ALSO NOTICED FROM THE RECORDS THAT COPY OF ITR F ORMS, ACKNOWLEDGEMENT AND TAX AUDIT REPORT DATED 12-06-20 13 WERE FURNISHED TO THE AO. THE CA OF THE ASSESSEE CO ULD NOT UPLOAD THE AUDIT REPORT BECAUSE OF TECHNICAL PROBLE M IN THE SERVER/ SITE OF THE DEPARTMENT. THE ASSESSEE WAS UN DER BONA FIDE BELIEF THAT THE REPORT IS ALREADY UPLOADED. HO WEVER, THE ASSESSEE HAD FILED THE TAX AUDIT REPORT DATED 12-06 -2013 BEFORE THE AO. IT IS ALSO NOTICED THAT THE ASSESSEE BEING LOW EDUCATED AND SHE WAS NOT AWARE OF THE E-FILING SYST EM PARTICULARLY UPLOADING OF AUDIT REPORT ON INTERNET AS IT WAS FIRST TIME INTRODUCED BY THE DEPARTMENT TO UPLOAD T HE SAME. IT APPEARS THAT IT IS A TECHNICAL BREACH ON THE PAR T OF THE ASSESSEE AS THE AUDIT REPORT COULD NOT UPLOAD ON AC COUNT OF SITE/ SERVER PROBLEM OF THE SYSTEM. THE LD. AR OF T HE ASSESSEE RELIED ON VARIOUS CASE LAWS WHICH HAVE BEE N TAKEN INTO CONSIDERATION. THE LD. AR OF THE ASSESSEE TAKI NG THE SUPPORT OF THE HON'BLE KERALA HIGH COURT IN THE CA SE OF ACIT & ANR VS. DR. K. SATISH SHETTY (2009) 310 ITR 366 SUBMITTED THAT THAT THIS IS FIRST TIME WHEN ASSESSE E WAS REQUIRED TO E-FILE THE AUDIT REPORT AND PRIOR TO TH AT NO SUCH REPORTS WERE BEING FURNISHED. HENCE, THE PENALTY SH OULD NOT BE LEVIED. IN VIEW OF THE ABOVE FACTS AND CIRCUMSTA NCES OF THE CASE, I AM OF THE CONSIDERED VIEW THAT THE PENA LTY IMPOSED BY THE LOWER AUTHORITIES U/S 271B OF THE AC T ON THE ASSESSEE IS NOT JUSTIFIABLE AS THE AUDIT REPORT WAS TO BE UPLOADED BY THE CHARTERED ACCOUNTANTS WHO AUDITED H ER BOOKS OF ACCOUNT AND THE ASSESSEE WAS LOW EDUCATED AND SHE HAD UNDER BONA FIDE BELIEF THAT THE SAME HAD BEEN U PLOADED IN THE SYSTEM DEVELOPED BY THE DEPARTMENT. IN SUCH A SITUATION, I DIRECT TO DELETE THE PENALTY OF RS. 1. 50 LACS LEVIED ITA NO.781/JP/2016 SHRI GOVIND GARG VS. ITO, WARD- 2 (3), AJMER 6 U/S 271B OF THE ACT. THUS THE APPEAL OF THE ASSESSE E IS ALLOWED. SINCE THE FACTS OF THE ISSUE IN QUESTION OF THE ASS ESSEE ARE SAME WHEREIN THE PENALTY OF RS. 83,574/- WAS CONFIRMED U/S 271B OF THE ACT BY THE LD. CIT(A), THEREFORE, RESPECTFULLY FOLLOWING THE ORDER OF THIS BENCH ON SIMILAR FACTS AND CIRCUMSTANCES OF THE ASSESSEE'S C ASE U/S 271B OF THE ACT, THE APPEAL OF THE ASSESSEE IS ALLOWED. 3.0 IN THE RESULT, THE APPEAL OF THE ASSESSEE IS AL LOWED ORDER PRONOUNCED IN THE OPEN COURT ON 31 /01 /2017. SD/- HKKXPUN ( BHAGCHAND) YS[KK LNL;@ ACCOUNTANT MEMBER TK;IQJ@ JAIPUR FNUKAD@ DATED:- 31 /01/ 2017 *MISHRA VKNS'K DH IZFRFYFI VXZSF'KR@ COPY OF THE ORDER FORWARDED TO: 1. VIHYKFKHZ@ THE APPELLANT- SHRI GOVIND GARG, KEKRI 2. IZR;FKHZ@ THE RESPONDENT- THE ITO, WARD- 2(3), AJMER 3. VK;DJ VK;QDRVIHY@ CIT(A). 4. VK;DJ VK;QDR@ CIT, 5. FOHKKXH; IZFRFUF/K] VK;DJ VIHYH; VF/KDJ.K] T;IQJ@ DR, ITAT, JAIPUR 6. XKMZ QKBZY@ GUARD FILE (ITA NO. 781/JP/2016) VKNS'KKUQLKJ@ BY ORDER, LGK;D IATHDKJ @ ASSISTANT. REGISTRAR