DCIT, CHENNAI V. Best Cast IT Ltd., CHENNAI

ITA 810/CHNY/2017

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 4366 (ITAT-CHENNAI)
• Duration Of Justice: 2 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-06-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2004-2005
• Appeal Filed On: 03-04-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PAVUNA SUNDARI
• Assessee Lawyers: A R AHMED SHERIFF

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , , ' # BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI S. JAYARAMAN, ACCOUNTANT MEMBER ./ ITA NO. 810/MDS/2017 & '& / ASSESSMENT YEAR : 2004-05 THE DEPUTY COMMISSIONER OF INCOME TAX, CORPORATE CIRCLE 1(2), CHENNAI - 600 034. V. M/S BEST CAST IT LTD., NO.6, POONAMALLEE HIGH ROAD, VELLAPPANCHAVADI, CHENNAI - 600 077. PAN : AAACB 1423 H ()*/ APPELLANT) (+,)*/ RESPONDENT) )* - . / APPELLANT BY : SMT. PAVUNA SUNDARI, JCIT +,)* - . / RESPONDENT BY : SHRI A.R. AHMED SHERIFF, FCA / - 0' / DATE OF HEARING : 31.05.2017 12' - 0' / DATE OF PRONOUNCEMENT : 09.06.2017 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE REVENUE IS DIRECTED AGAINST T HE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) -1, CHENNA I, DATED 30.01.2017 AND PERTAINS TO ASSESSMENT YEAR 2004-05 DELETING THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTI ON 271B OF THE INCOME-TAX ACT, 1961 (IN SHORT 'THE ACT'). 2 I.T.A. NO.810/MDS/17 2. SMT. PAVUNA SUNDARI, THE LD. DEPARTMENTAL REPRES ENTATIVE, SUBMITTED THAT THE ASSESSEE FAILED TO FILE THE AUDI T REPORT WITHIN THE DUE DATE. ACCORDING TO THE LD. D.R., THE DUE DATE FOR FILING THE AUDIT REPORT WAS 31.10.2004. HOWEVER, THE AUDIT REPORT W AS FILED ON 25.10.2005. THEREFORE, THE ASSESSING OFFICER LEVIE D PENALTY OF ` 1 LAKH. THE CIT(APPEALS), HOWEVER, DELETED THE PENAL TY LEVIED BY THE ASSESSING OFFICER BY REFERRING TO CIRCULAR ISSUED B Y CBDT. ACCORDING TO THE LD. D.R., THE CIT(APPEALS) FAILED TO CONSIDER THE DELAY IN FILING THE AUDIT REPORT. 3. WE HAVE HEARD SHRI A.R. AHMED SHERIFF, THE LD. REPRESENTATIVE FOR THE ASSESSEE, ALSO. ADMITTEDLY, THE AUDIT REPORT WAS FILED ON 25.10.2005 EVEN THOUGH THE DUE DATE FO R FILING OF AUDIT REPORT WAS 31.10.2004. IT IS WELL SETTLED PRINCIPL E OF LAW THAT THE FILING OF AUDIT REPORT IS MANDATARY BUT, TIME LIMIT FOR THE SAME IS DISCRETIONARY. THE AUDIT REPORT IS ONLY TO ASSIST THE ASSESSING OFFICER TO COMPLETE THE ASSESSMENT DETERMINING THE TAXABLE INCOME. IN THIS CASE, DETERMINATION OF TAXABLE INCOME WAS N OT JEOPARDIZED BY NON-FILING OF AUDIT REPORT WITHIN THE DUE DATE. AS RIGHTLY OBSERVED BY THE CIT(APPEALS), MERELY BECAUSE THE ASSESSEE CO ULD NOT FILE THE AUDIT REPORT ALONG WITH THE RETURN OF INCOME OR WITHIN THE DUE 3 I.T.A. NO.810/MDS/17 DATE, THAT ALONE WOULD NOT ATTRACT PENALTY UNDER SE CTION 271B OF THE ACT. THE CBDT VIDE ITS CIRCULAR NO.3 OF 2009 HAS C LARIFIED THE SAME AND IT WAS RIGHTLY RELIED ON BY THE CIT(APPEALS). THIS TRIBUNAL IS OF THE CONSIDERED OPINION THAT THE CIRCULAR ISSUED BY THE CBDT IS BINDING ON ALL THE AUTHORITIES, THEREFORE, THE CIT( APPEALS) HAS RIGHTLY DELETED THE PENALTY LEVIED BY THE ASSESSING OFFICER UNDER SECTION 271B OF THE ACT. THIS TRIBUNAL DO NOT FIND ANY REA SON TO INTERFERE WITH THE ORDER OF THE LOWER AUTHORITY AND ACCORDING LY THE SAME IS CONFIRMED. 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. ORDER PRONOUNCED ON 9 TH JUNE, 2017 AT CHENNAI. SD/- SD/- ( ) ( . . . ) (S. JAYARAMAN) (N.R.S. GANESAN) ' / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 9 TH JUNE, 2017. KRI. - +056 76'0 /COPY TO: 1. )* /APPELLANT 2. +,)* /RESPONDENT 3. / 80 () /CIT(A)-1, CHENNAI 4. PRINCIPAL CIT, CHENNAI-1, CHENNAI 5. 69 +0 /DR 6. :& ; /GF.