M/s Kutch Highway Transport Co., GANDHIDHAM V. The Income Tax Officer, Ward-1, GANDHIDHAM

ITA 787/RJT/2010

• Counselvise Citation: 78724914 RSA 2010
• Duration Of Justice: 1 year(s) 4 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 08-08-2011
• Assessment Year: 2005-2006
• Appeal Filed On: 15-03-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MK SINGH
• Assessee Lawyers: MJ RANPURA
• Keywords: Reasonable cause
• Section: 142(1); 27; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL RAJKOT BENCH, RAJKOT BEFORE SHRI A.L. GEHLOT (AM) AND SHRI N.R.S. GANESA N (JM) I.T.A. NO.787/RJT/2010 (ASSESSMENT YEAR 2005-06) M/S KUTCH HIGHWAY TRANSPORT COR VS THE ITO, WD.1 PLOT NO.215, WD.12B GANDHIDHAM POLICE STATION ROAD GANDHIDHAM PAN : AAEFK2523J (APPELLANT) (RESPONDENT) DATE OF HEARING 08-08-2011 DATE OF PRONOUNCEMENT 12-08-2011 APPELLANT BY : SHRI MJ RANPURA RESPONDENT BY: SHRI MK SINGH O R D E R PER N.R.S. GANESAN, JM THIS APPEAL OF THE IS ASSESSEE IS DIRECTED AGAINST THE ORDER OF CIT(A)-II, RAJKOT DATED 30-12-2009 PERTAINING TO ASSESSMENT YE AR 2005-06. 2. SHRI MJ RANPURA, THE LD.REPRESENTATIVE FOR THE A SSESSEE SUBMITTED THAT THE ASSESSEE OBTAINED AUDIT REPORT BEFORE THE DUE DATE. ACCORDING TO THE LD.REPRESENTATIVE, THE SPECIFIED DUE DATE WAS 31-10 -2005. HOWEVER, THE AUDIT REPORT WAS OBTAINED ON 21-10-2005. ACCORDING TO TH E LD.REPRESENTATIVE, THE ACCOUNTANT LEFT THE JOB. THEREFORE, THE RETURN ITS ELF WAS NOT FILED WITHIN THE DUE DATE SPECIFIED U/S 139(1) OF THE ACT. AS SOON AS T HE ASSESSEE CAME TO KNOW THAT THE RETURN WAS NOT FILED, THE SAME WAS FILED ALONG WITH THE AUDIT REPORT BEFORE ISSUE OF ANY NOTICE U/S 142(1) OF THE ACT. THEREFO RE, ACCORDING TO THE LD.REPRESENTATIVE, NO PENALTY COULD BE LEVIED U/S 2 71B OF THE ACT. THE LD.REPRESENTATIVE PLACED HIS RELIANCE ON THE JUDGME NT OF THE MADRAS HIGH COURT IN CIT VS APEX LABORATORIES (P) LTD (2010) 320 ITR 498 (MAD). THE ITA NO.787/RJT/2010 2 LD.REPRESENTATIVE HAS ALSO PLACED HIS RELIANCE ON T HE DECISION OF THE DELHI BENCH OF THIS TRIBUNAL IN THE CASE OF DEVENDRA KUMAR ASHO K KUMAR VS ITRO (2004) 3 SOT 3 (DEL) AND SUBMITTED THAT WHEN THE ASSESSEE IN ADVERTENTLY FAILED TO FILE THE AUDIT REPORT THE DELHI BENCH FOUND THAT THERE WAS A REASONABLE CAUSE U/S 273B; THEREFORE, THERE CANNOT BE ANY LEVY OF PENALTY. 3. ON THE CONTRARY, SHRI MK SINGH, THE LD.DR SUBMIT TED THAT HE IS PLACING RELIANCE ON THE OBSERVATION MADE BY THE ASSESSING O FFICER AS WELL AS THE CIT(A). 4. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS ON EITH ER SIDE. WE HAVE ALSO CAREFULLY GONE THROUGH THE ORDERS OF LOWER AUTHORIT IES. IT IS NOT IN DISPUTE THAT THE DUE DATE FOR GETTING THE AUDIT REPORT IS 31-10-2005 . IT IS ALSO AN ADMITTED FACT THAT THE ASSESSEE HAS NOT FILED THE RETURN OF INCOME WIT HIN THE TIME SPECIFIED U/S 139(1) OF THE INCOME-TAX ACT. IT IS ALSO NOT THE C ASE OF THE REVENUE THAT ANY NOTICE U/S 142(1) WAS ISSUED TO THE ASSESSEE CALLIN G UPON THE ASSESSEE TO FILE THE AUDIT REPORT. THE ASSESSEE HAVING REALIZED THA T THE RETURN OF INCOME WAS NOT FILED WITHIN THE SPECIFIED TIME LIMIT FILED THE SAM E VOLUNTARILY ALONG WITH THE AUDIT REPORT. THE QUESTION ARISES FOR CONSIDERATION IS W HETHER, WHEN THE RETURN OF INCOME WAS FILED VOLUNTARILY BEYOND THE TIME LIMIT SPECIFIED U/S 139(1) WITHOUT THERE BEING ISSUED ANY NOTICE U/S 142(1), CAN WE SA Y THAT THE ASSESSEE COMMITTED ANY DEFAULT IN FILING THE AUDIT REPORT SO AS TO ATTRACT PENALTY U/S 271B OF THE ACT. THIS QUESTION WAS EXAMINED BY THE MADRAS HIGH COURT IN CIT VS APEX LABORATORIES (P) LTD (SUPRA). THE MADRAS HIGH COUR T, AFTER EXTRACTING ITS EARLIER ORDER IN THE CASE OF THE VERY SAME ASSESSEE, VIZ. A PEX LABORATORY (P) LTD FOUND THAT SECTION 271B OF THE ACT ENVISAGES LEVY OF PENA LTY FOR FAILURE TO GET HIS ACCOUNTS AUDITED, OBTAIN A REPORT OF SUCH AUDIT AND FURNISH THE SAID REPORT ALONG WITH HIS RETURN OF INCOME FILED U/S 139(1) OR IN RE SPONSE TO NOTICE UNDER SECTION 142(1). WHEN THE RETURN WAS NOT FILED U/S 139(1), NO DEFAULT COULD BE MADE OUT U/S 44AB. ACCORDINGLY THE MADRAS HIGH COURT HELD T HAT THE PENALTY IS LEVIABLE ONLY IF THE ASSESSEE FAILS TO GET HIS ACCOUNTS AUDI TED AND OBTAINED A REPORT. SINCE THE ASSESSEES ACCOUNTS WERE AUDITED AND HAS ALSO OBTAINED THE AUDIT ITA NO.787/RJT/2010 3 REPORT AND HAS FILED THE SAME ALONG WITH THE RETURN OF INCOME BELATEDLY, THERE CANNOT BE ANY LEVY OF PENALTY U/S 271B OF THE ACT. IN VIEW OF THIS JUDGMENT OF THE MADRAS HIGH COURT, IN OUR OPINION, THERE CANNOT BE ANY LEVY OF PENALTY U/S 271B WHEN THE ASSESSEE OBTAINED THE AUDIT REPORT BEFORE THE SPECIFIED DATE AND FILED THE SAME ALONG WITH THE RETURN OF INCOME BEFORE ISS UING NOTICE U/S 142(1) OF THE ACT, BUT AFTER THE PRESCRIBED TIME LIMIT U/S 139(1) OF THE ACT. BY RESPECTFULLY FOLLOWING THE JUDGMENT OF THE MADRAS HIGH COURT IN THE CASE OF APEX LABORATORIES LTD (SUPRA), THE PENALTY LEVIED U/S 27 1B IS DELETED. ACCORDINGLY, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 12-08-2011. SD/- SD/- (A.L. GEHLOT) (N.R.S. GANESAN) ACCOUNTANT MEMBER JUDICIAL MEMBER RAJKOT, DT : 12 TH AUGUST, 2011 PK/- COPY TO: 1. ASSESSEE 2. REVENUE 3. THE CIT(A)-II, RAJKOT 4. THE CIT-I, RAJKOT 5. THE DR, I.T.A.T., RAJKOT (TRUE COPY) BY ORDER ASSTT.REGISTRAR, ITAT, RAJKOT