LANCO RITHWIK JOINT VENTURE,HYDERABAD V. INCOME TAX OFFICER, WARD-14(1), HYDERABAD

ITA 897/HYD/2024

AI Insights

The case involves Lanco Rithwik Joint Venture appealing against a penalty imposed under section 271B of the I.T. Act, 1961, for failing to file the tax audit report in Form 3CD along with the return of income for the assessment year 2018-19. The penalty of Rs. 1,50,000 was levied due to the delay in filing the audit report, which was submitted on 12/01/2021, well after the due date. The assessee argued that the delay was caused by ongoing proceedings at the NCLT involving one of its partners, Lanco, which affected their ability to file the report on time. The ITAT found that the matter required re-evaluation at the level of the Assessing Officer, considering the circumstances that led to the delay and the procedural requirements under section 273B of the I.T. Act, 1961.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 26929 (ITAT-HYDERABAD)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Assessment Year: 2018-2019
• Other Referred Cases: Suryavathi Gandiboina vs. ACIT, Virudhunagar District Cooperative Consumers vs. Income Tax Officer
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: P. MURALI MOHAN RAO
• Keywords: Condonation of delay; Set aside; Period of limitation
• Section: 142(1); 44AB; 273B; 271B

Judgement Text

" ITA No 897 of 2024 LANCO RITHWIK JOINT VENTURE Page 1 of 8 आयकर अपीलȣय अͬधकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ A ‘ Bench, Hyderabad Before Shri Vijay Pal Rao, Vice-President A N D Shri Manjunatha, G. Accountant Member आ.अपी.सं /ITA No.897/Hyd/2024 (िनधाŊरण वषŊ/Assessment Year: 2018-19) Lanco Rithwik Joint Venture, Hyderabad PAN:AABAL3655J Vs. Income Tax Officer Ward 14(1) Hyderabad (Appellant) (Respondent) िनधाŊįरती Ȫारा/Assessee by: Shri, P. Murali Mohan Rao, CA राज̾ व Ȫारा/Revenue by:: Shri Srinath Sadanala, DR सुनवाई की तारीख/Date of hearing: 07/01/2025 घोषणा की तारीख/Pronouncement: 08/01/2025 आदेश/ORDER Per Vijay Pal Rao, Vice President This appeal by the assessee is directed against the order dated, 07/05/2024 of the learned CIT (A)-NFAC Delhi, arising from penalty order passed u/s 271B of the I.T. Act, 1961 for the A.Y.2018-19. 2. The registry has reported a delay of 68 days in filing the present appeal. The assessee has filed a petition for condonation of delay which is supported by an affidavit of the authorized person of the assessee joint venture. ITA No 897 of 2024 LANCO RITHWIK JOINT VENTURE Page 2 of 8 3. The learned AR of the assessee has submitted that the appeal was filed within the period of limitation on 29/06/2024. However, due to some technical glitches in the Portal of the ITAT, it could not have been registered and appeal number was not generated. Therefore, the assessee informed the concerned authority through email and also generated an acknowledgement of filing of the appeal electronically. Thereafter, the assessee was asked to file fresh appeal which was filed on 12/09/2024 resulting the delay of 68 days. The learned AR has produced a copy of the acknowledgement of the filing of the appeal dated 29/06/2024. 4. On the other hand, the learned DR has not raised any objection, if the delay of 68 days in filing the present appeal due to technical glitches in the portal of the ITAT is condoned. 5. Having considered the submissions of the parties and going through the reasons explained in the petition for condonation of delay as well as the contents of the affidavit, we find that originally, the assessee has filed appeal on 29/06/2024 vide acknowledgement filed by the assessee before us and therefore, the said appeal filed by the assessee was within the period of limitation. However, due to some technical glitches in the portal of the ITAT, the registration number/appeal number was not generated in response to the filing of appeal dated 29/06/2024 and consequently, the assessee was required to file a fresh appeal which was filed on 12/09/2024 after a delay of 68 days. Thus, the assessee has explained the cause of delay which is nothing but due to the technical glitches in the portal of the ITA No 897 of 2024 LANCO RITHWIK JOINT VENTURE Page 3 of 8 ITAT. Accordingly, the delay of 68 days in filing of the appeal is hereby condoned and the appeal is admitted for adjudication. 6. The assessee has raised the following grounds: ITA No 897 of 2024 LANCO RITHWIK JOINT VENTURE Page 4 of 8 7. Brief facts of the case are that the Assessing Officer has levied penalty u/s 271B of the I.T. Act, 1961 for Rs.1,50,000/- due to delay on the part of the assessee to file the tax audit report in Form 3CD along with return of income. The learned AR of the assessee has submitted that though the assessee could not file the tax audit report on or before the due date of filing the return of income, however, the same was filed on 12/01/2021 much before the completion of the assessment order on 11/08/2018. Thus,, he has submitted that when the audit report was filed before framing of the assessment order by the Assessing Officer, then the levy of penalty u/s 271B is not justified. He has further submitted that the assessee is a joint venture between LANCO and Rithwik and, one of the partner i.e. Lanco was undergoing the proceedings before the NCLT, therefore, the audit report could not be filed along with the return of income within the period of limitation. Therefore, it was due to the said reason of the proceedings initiated before the NCLT in the case of Lanco, there was a delay in filing the audit report. He has further ITA No 897 of 2024 LANCO RITHWIK JOINT VENTURE Page 5 of 8 contended that when the filing of the audit report is only a procedural requirement and once the assessee has filed the same before the completion of the assessment, then no penalty action ought to have been taken against the assessee. He has also relied upon the following decisions: i) ITAT Hyderabad Benches in the case of Suryavathi Gandiboina vs. ACIT in ITA No.31/Hyd/2023. ii) ITAT Chennai Benches in the case of Virudhunagar District Cooperative Consumers vs. Income Tax Officer in ITA No.1065/Chny/2019. 8. On the other hand, the learned DR has submitted that the assessee has not explained any reason before the Assessing Officer as well as before the learned CIT (A) for delay in filing the audit report. Now first time the assessee has explained the reasons for delay as one of the partners of the assessee joint venture LANCO went to the NCLT and therefore, was not having the access to DIN which was never brought to the notice of the Assessing Officer as well as the CIT (A). This is a case of non- cooperation and non-participation by the assessee even during the penalty proceedings. He has relied upon the orders of the authorities below. 9. We have considered the rival submissions as well as the material available on record. There is no dispute about the fact that the assessee did not file the audit report in Form 3CD along with the return of income but the same was filed on ITA No 897 of 2024 LANCO RITHWIK JOINT VENTURE Page 6 of 8 21/01/2021 as this fact is recorded by the Assessing Officer in Para 4 and 4.1 of the assessment order as under: “4. It is further observed that the assessee has not got its accounts audited as per the provisions of section 44AB of the Income Tax Act, 1961 or did not file the such Audit Report on or before the due date, despite the turnover of the business of the assessee exceeds the maximum limit for which getting the books of accounts audited is compulsory under the provisions of section 44AB of the Income Tax Act, 1961. On verification of e-filing portal of the department, it is found that the assessee has filed copy of Audit Report on 21/01/2021. This indicates that the assessee has filed its audit report in Form 3CB, only after. it was pointed by the Assessing Officer through notice u/s 142(1) of the Income Tax Act, 1961 issued to the assessee during the assessment proceedings for the assessment year under consideration. 4.1. In view of the facts and the circumstances mentioned above, the penalty proceedings under section 271B of, the Income Tax Act, 1961, are also initiated for not getting the books of accounts audited as required under section 44AB of the Income Tax Act, 1961 or non-furnishing the audit report on or before the due date of filing of such report.” 10. It is manifest from the record that the audit report in Form 3CD was filed by the assessee only after it was pointed out by the Assessing Officer through notice issued u/s 142(1) of the I.T. Act, 1961. Therefore, the delay in filing the audit report is undisputed and consequently, the Assessing Officer initiated proceedings u/s 271B of the I.T. Act, 1961. The Assessing Officer has stated in the order passed u/s 271B that the assessee has not responded to the show-cause notice u/s 271B of the Act and therefore, the penalty order was passed by the Assessing Officer in the absence of any reason explained by the assessee for delay in filing the audit report. The learned AR has pointed out that due to non-receipt of the notice, the assessee could not participate in the penalty proceedings before the Assessing Officer. Now the learned AR has pointed out that due to the reason of proceedings ITA No 897 of 2024 LANCO RITHWIK JOINT VENTURE Page 7 of 8 before the NCLT in case of Lanco Infratech Ltd, there was a delay in filing the audit report. However, this explanations were not produced or placed before the Assessing Officer as well as before the learned CIT (A) resulting the levy of penalty u/s 271B of the I.T. Act, 1961. Having considered the explanations of the delay in filing the audit report as well as in the interest of justice, we are of the considered opinion that the matter is required to be re- considered at the level of the Assessing Officer in the light of section 273B of the I.T. Act, 1961. Accordingly, the impugned order of the learned CIT (A) is set aside and the matter is remanded to the record of the Assessing Officer for fresh adjudication after giving an opportunity of hearing to the assessee to explain the reasons for delay in filing the audit report sand to consider the explanations of the assessee in the light of provisions of section 273B of the Act. 11. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the Open Court on 8th January, 2025. Sd/- Sd/- (MANJUNATHA, G) ACCOUNTANT MEMBER (VIJAY PAL RAO) VICE-PRESIDENT Hyderabad, dated 8th January, 2025 Vinodan/sps ITA No 897 of 2024 LANCO RITHWIK JOINT VENTURE Page 8 of 8 Copy to: S.No Addresses 1 Lanco Rithwik Joint Venture c/o P Murali & Co. CAs, 6-3-655/2/3 Somajiguda, Hyderabad 500082 2 Income Tax Officer Ward 14(1) Hyderabad 3 Pr. CIT – Hyderabad 4 DR, ITAT Hyderabad Benches 5 Guard File By Order "