M/s B. W. M International, Kolkata V. ITO, Ward - 44(4), KOLKATA, Kolkata

MA 95/KOL/2018

• Counselvise Citation: [2018] 124 COUNSELVISE.COM (IT) 7079 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 29-08-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2005-2006
• Appeal Filed On: 29-05-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: T VARKEY J M
• Assessee Lawyers: T K CHAKRABORTY SHRI A
• Keywords: Reasonable cause
• Section: 273B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D, BENCH KOLKATA BEFORE SHRI ABY. T. VARKEY, JM & DR. A.L.SAINI, AM M.A NO.95/KOL/2018 (ARISING OUT OF I.T.A NO.1006/KOL/2015) ( / ASSESSMENT YEAR: 2005-06) M/S. B.W.M INTERNATIONAL 4, MEER BOHARGHAT STREET, KOLKATA 700 007. VS. ITO, WARD 44(4), KOLKATA ./ ./PAN/GIR NO. :AADFB 3904 B (APPELLANT) .. (RESPONDENT) APPELLANT BY : SHRI T.K. CHAKRABORTY, ADVOCATE RESPONDENT BY : SHRI A. BHATTACHARYA, ADDL. CIT,SR. DR / DATE OF HEARING : 03/08/2018 /DATE OF PRONOUNCEMENT :29/08/2018 / O R D E R PER DR. ARJUN LAL SAINI, AM: BY WAY OF CAPTIONED APPLICATION, THE ASSESSEE HAS SOUGHT TO POINT OUT THAT A MISTAKE APPARENT FROM RECORD WITHIN THE MEANING OF SECTION 254(2) OF THE INCOME TAX ACT, 1961(IN SHORT THE ACT) HAS CREPT IN THE ORDER OF THE TRIBUNAL DATED 29.11.2017. 2. IN THIS MISCELLANEOUS APPLICATION, THE ASSESSEE HAS POINTED OUT THE FOLLOWING MISTAKES APPARENT FROM RECORD AND PRAYED THE BENCH TO RECTIFY THEM. (I) THE FIRST GRIEVANCE OF THE ASSESSEE WAS THAT IN PARA NO. 7 OF THE ORDER OF THE TRIBUNAL DATED 29.11.2017, THE DUE DATE/EXTENDED DUE DATE OF FURNISHING THE AUDIT REPORT WAS MENTIONED WRONGLY STATING IN THIS CASE, THE TAX AUDIT SHOULD HAVE BEEN COMPLETED UP TO 30.09.2005 , FOR ASSESSMENT YEAR 2005-06. ALTHOUGH, SPECIFIED DUE DATE/ EXTENDED DUE FOR FURNISHING AUDIT REPORT WAS, 31 ST OCTOBER, 2005 FOR THE A.Y. 2005-06. M/S B.W.M. INTERNATIONAL M.A NO.95/KOL/2018 PAGE | 2 AFTER HEARING THE LD DR FOR THE REVENUE, WE RECTIFY THE MISTAKE ( THAT IS, THE RELEVANT DATE SHOULD BE READ) AS FOLLOWS: IN THIS CASE, THE TAX AUDIT SHOULD HAVE BEEN COMPLETED UP TO 31.10.2005 (II). THESECOND GRIEVANCE OF THE ASSESSEE IS THAT IN PARA NO 7 OF THE ORDER OF THE TRIBUNAL IT WAS MENTIONED WRONGLY, STATING AS FOLLOWS: ..SECTION 271B OF THE ACT BEGINS WITH THE PHRASE, `IF ANY PERSON FAILS WITHOUT REASONABLE CAUSE TO GET HIS ACCOUNTS AUDITED.. THE LD COUNSEL PRAYED THE BENCH THAT THE WORDS WITHOUT REASONABLE CAUSE WERE OMITTED WITH EFFECT FROM 10 TH SEPTEMBER, 1986. THEREFORE, IT SHOULD BE RECTIFIED. HAVING HEARD THE LD DR FOR THE REVENUE, WE RECTIFY THE MISTAKE BY DELETING THE WORDS WITHOUT REASONABLE CAUSE, THEREFORE, IT SHOULD BE READ AS FOLLOWS: ..SECTION 271B OF THE ACT BEGINS WITH THE PHRASE, IF ANY PERSON FAILS TO GET HIS ACCOUNTS AUDITED.. (III) THE THIRD GRIEVANCE OF THE ASSESSEE IN THIS MISCELLANEOUS APPLICATION IS THAT THE LEARNED TRIBUNAL HAS CONFIRMED THE PENALTY IMPOSED BY THE ASSESSING OFFICER UNDER SECTION 271B OF THE ACT, NOT CONSIDERING THE FACT THAT THE ASSESSEE HAD SUBMITTED THE RELEVANT PAPERS AND DOCUMENTS TO THE CHARTERED ACCOUNTANT FOR TAX AUDIT ON 31 ST OCTOBER, 2005 AND THE ASSESSEE COULD NOT SUBMIT SOME PAPERS AND DOCUMENTS WHICH WAS NECESSARY TO DO TAX AUDIT AND THEREFORE, THERE WAS DELAY IN FURNISHING THE TAX AUDIT REPORT. IN THIS CASE THE TAX AUDIT REPORT WAS BE FURNISHED BY THE ASSESSEE ON THE DUE DATE/EXTENDED DUE DATE ON 31.10.2005, BUT THE TAX AUDIT REPORT WAS SIGNED BY THE TAX AUDITOR ON 21.12.2005, AS THE ASSESSEE COULD NOT SUBMIT THE PAPERS TO THE TAX AUDITOR ON TIME, HENCE THERE WAS DELAY IN GETTING THE TAX AUDIT DONE AS WELL AS FURNISHING THE TAX AUDIT REPORT BEFORE THE DUE DATE. IN THIS SCENARIO THE LD COUNSEL PRAYED THE BENCH TO RECALL THE ORDER OF THE TRIBUNAL DATED 29.11.2017. M/S B.W.M. INTERNATIONAL M.A NO.95/KOL/2018 PAGE | 3 WE HAVE HEARD BOTH THE PARTIES ON THE CAPTIONED ISSUE. WE NOTE THAT THE DIVISION BENCH OF THIS TRIBUNAL HAS PASSED THE REASONED ORDER, VIDE RATIO DECENDI OF THE ORDER, IN PARA NO.7 OF ITS ORDER, WHICH IS REPRODUCED BELOW FOR READY REFERENCE: 7. HAVING HEARD THE RIVAL SUBMISSIONS, PERUSED THE MATERIAL AVAILABLE ON RECORD, WE NOTE THAT IN THE ASSESSEE`S CASE UNDER CONSIDERATION THE ACCOUNTING YEAR ENDS ON 31.03.2005. THE ASSESSEE PREPARED THE PROFIT AND LOSS ACCOUNT AND BALANCE SHEET AS ON 31.03.2005 AND HE SUPPOSED TO GET THE ACCOUNTS TAX AUDITED U/S 44AB ON OR BEFORE 30.09.2005. THE RESPONSIBILITY TO GET THE ACCOUNTS TAX AUDITED IS ON THE ASSESSEE NOT ON THE CHARTERED ACCOUNTANT. IN THE INSTANT CASE THE BOOKS OF ACCOUNTS OF THE ASSESSEE WAS AUDITED AND SIGNED BY A CHARTERED ACCOUNTANT ON 21.12.2005. THEREFORE, THERE IS A DELAY OF 82 DAYS, IN GETTING THE TAX AUDIT DONE. THE FINANCIAL STATEMENTS, THAT IS, BALANCE SHEET, PROFIT AND LOSS ACCOUNTS ETC AS ON 31.03.2005, WAS TO BE TAX AUDITED BY A CHARTERED ACCOUNTANT, APPOINTED BY THE ASSESSEE, UP TO DUE DATE OF 30.09.2009. THEREFORE, LEGISLATURE HAS GIVEN SIX MONTH`S TIME TO THE ASSESSEE TO GET THE ACCOUNTS AUDITED AND FILE THE RETURN OF INCOME. AS PER THE INTENTION OF THE LEGISLATURE, THE SAID SIX MONTHS TIME IS ENOUGH FOR THE ASSESSEE TO SUBMIT THE BOOKS OF ACCOUNTS AND DOCUMENTS TO THE CHARTERED ACCOUNTANT AND GET THE TAX AUDIT DONE. IF THE ASSESSEE FAILS TO GET HIS ACCOUNTS AUDITED WITHIN THIS TIME LIMIT THEN PENALTY U/S 271B WILL BE IMPOSED. SECTION 271B OF THE ACT BEGINS WITH THE PHRASE 'IF ANY PERSON FAILS WITHOUT REASONABLE CAUSE TO GET HIS ACCOUNTS AUDITED WITHIN THE TIME STIPULATED, THEN THE CONCERNED INCOME-TAX AUTHORITY MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY, THE SUM MENTIONED THEREIN. THAT IS, IF THE ASSESSEE FAILS TO GET THE ACCOUNT AUDITED U/S 44AB THEN PENALTY U/S 271B WILL BE IMPOSED ON THE ASSESSEE, A SUM EQUAL TO % OF THE TOTAL SALES/TURNOVER, AS THE CASE MAY BE, OR A SUM OF RS.1,00,000/- WHICHEVER IS LESS. IN THIS CASE, THE ASSESSEE FAILED TO GET HIS ACCOUNTS AUDITED U/S 44AB, THEREFORE, THE AO IMPOSED PENALTY OF RS.1,00,000/-. BEFORE US, THE COUNSEL FOR THE ASSESSEE SUBMITTED THAT AS PER PROVISIONS OF SECTION 273B OF THE INCOME TAX ACT, NO PENALTY SHALL BE IMPOSED ON THE ASSESSEE FOR ANY FAILURE, IF HE PROVES THAT THERE WAS REASONABLE CAUSE FOR THE SAID FAILURE. IN THE ASSESSEES CASE UNDER CONSIDERATION, THE COUNSEL FOR THE ASSESSEE HAS EXPLAINED US REASONABLE CAUSE STATING THAT THERE WAS A DELAY IN SUBMITTING PAPER TO THE TAX AUDITOR AS THE BOOKS OF ACCOUNTS OF THE FIRM WAS GIVEN TO THE AUDITOR AS ON 31.10.2005. WE FIND THAT, THERE WAS A DELAY ON THE PART OF THE ASSESSEE IN SUBMITTING BOOKS OF ACCOUNTS TO THE TAX AUDITOR (VIDE CERTIFICATE OF TAX AUDITOR). IN THIS CASE, THE TAX AUDIT SHOULD HAVE BEEN COMPLETED UP TO 30.09.2005. THEREFORE, BOOKS OF ACCOUNTS SHOULD HAVE BEEN GIVEN BY THE ASSESSEE TO THE TAX AUDITOR BEFORE 30.09.2005 BUT AS PER THE CERTIFICATE OF THE CA THE BOOKS OF ACCOUNTS WERE GIVEN TO THE CA BEFORE 31.10.2005 THEREFORE IT IS DELAY ON THE PART OF THE ASSESSEE AND THE ASSESSEE DID NOT EXPLAIN THIS DELAY BEFORE US. THE ASSESSEE HAS NOT EXPLAINED US, THAT WHAT WAS THE REASON FOR NOT SUBMITTING BOOK OF ACCOUNTS TO THE TAX AUDITOR, BEFORE 30.09.2005 AND WHY IT WAS SUBMITTED BEFORE 31.10.2005. WHY THE BOOKS OF ACCOUNTS WERE NOT SUBMITTED TO CA BEFORE 30.09.2005,( SO THAT, TAX AUDIT WOULD HAVE BEEN COMPLETED ON TIME), HAS ALSO NOT BEEN EXPLAINED BY ASSESSEE. DURING THE COURSE OF HEARING, THE LD. COUNSEL HAS BEEN EMPHASIZING THAT M/S B.W.M. INTERNATIONAL M.A NO.95/KOL/2018 PAGE | 4 THERE WAS A DELAY ON PART OF THE CHARTERED ACCOUNTANT (CA) TO COMPLETE THE TAX AUDIT REPORT BUT FROM THE CERTIFICATE WHICH WAS SUBMITTED BY THE ASSESSEE BEFORE US CLEARLY SHOWS THAT THERE IS NO DELAY ON THE PART OF THE CA. IT IS THE DELAY ON THE PART OF THE ASSESSEE IN SUBMITTING THE BOOKS OF ACCOUNTS TO THE CA. THE CA CERTIFICATE IS FURNISHED BELOW FOR READY REFERENCE: TO WHOM IT MAY CONCERN THIS IS TO CERTIFY THAT THE BOOKS OF ACCOUNTS OF THE FIRM M/S B.W.M INTERNATIONAL FOR THE FINANCIAL YEAR 2004-05 WAS GIVEN FOR AUDITING TO US BEFORE 31.10.2005. DUE TO WANT OF SOME PAPERS/DOCUMENTS THE TAX AUDIT OF SAID FIRM WAS COMPLETED BY US AS ON 21.12.2005. FOR BAID BORAR & COMPANY CHARTERED ACCOUNTANTS. FROM THE ABOVE CERTIFICATE WE NOTE THAT BOOKS OF ACCOUNTS WERE SUBMITTED TO CA BEFORE 31.10.2005, AND WHY THE BOOKS OF ACCOUNTS WERE NOT GIVEN TO CA BEFORE 30.09.2005 HAS NOT BEEN EXPLAINED. IN THE ASSESSEE`S CASE UNDER CONSIDERATION THE DUE DATE OF FURNISHING THE TAX AUDIT REPORT IS 30.09.2005 AND THE ASSESSEE FAILED TO EXPLAIN THAT WHY BOOKS OF ACCOUNTS WERE NOT SUBMITTED TO CA PRIOR TO 30.09.2005. THEREFORE, FROM THE ABOVE CERTIFICATE IT APPEARS TO US THAT THERE IS NO DELAY ON PART OF CA, BUT IT IS DELAY ON THE PART OF THE ASSESSEE. THEREFORE, ASSESSEE HAS NOT EXPLAINED BEFORE US THE REASONABLE CAUSE FOR DELAY IN GETTING THE TAX AUDITED DONE. THE LD. COUNSEL ONLY STATED THAT THE TAX AUDIT REPORT WAS SIGNED ON 21.12.2005 AND THE RETURN WAS FILED ON 28.12.2005 AND EXPLAINED US THAT TAX AUDITOR DELAYED THE ACCOUNTS, IS NOT ACCEPTABLE IN VIEW OF THE TAX AUDITOR CERTIFICATE MENTIONED ABOVE. THE ASSESSEE HAS EXPLAINED THE DELAY BETWEEN 21.12.2005 TO 28.12.2005 WHICH IS NOT RELEVANT HERE, BECAUSE THIS IS THE FURTHER DELAY AFTER GETTING THE DELAYED TAX AUDIT REPORT. THE COUNSEL FOR THE ASSESSEE HAS FAILED TO EXPLAIN THE DELAY BETWEEN 30.09.2005 TO 21.12.2005 THEREFORE, WE ARE OF THE VIEW THAT IT IS FAILURE ON THE PART OF THE ASSESSEE. UNLESS IT IS PROVED THAT THERE WAS REASONABLE CAUSE FOR THE FAILURE, THERE IS NO ESCAPE FROM THE IMPOSITION OF PENALTY. SECTION 271B DOES NOT LEAVE ANY DISCRETION AT THE HANDS OF THE AUTHORITY EXCEPT AS PROVIDED IN SECTION 273B. IT IS ONLY WHEN REASONABLE CAUSE FOR FAILURE IS PROVED, THE PENALTY CAN BE AVOIDED. IN THIS CASE UNDER CONSIDERATION, THE LD. COUNSEL FOR THE ASSESSEE HAS FAILED TO PROVE THE REASONABLE CAUSE. THE ASSESSEE CANNOT SIMPLY SHIRK HIS RESPONSIBILITY BY SAYING THAT THERE WAS DELAY ON THE PART OF THE CA WHEREAS WE NOTICED THAT THERE WAS DELAY ON THE PART OF THE ASSESSEE. IT IS THE DUTY OF THE ASSESSEE TO ENSURE THAT THE CA IS DOING HIS JOB PROPERLY. THE ASSESSEE SHOULD HAVE ENQUIRED PERIODICALLY OR AT LEAST WITHIN A REASONABLE TIME AS TO WHETHER THE TAX AUDIT REPORT SIGNED/FILED OR NOT WITH THE REVENUE AUTHORITIES. IN THIS CASE, THE ASSESSEE HAS NOT ESTABLISHED ANY CORRESPONDENCE BETWEEN HIMSELF AND THE CA. AS PER THE CERTIFICATE OF THE CA, IT IS ALSO CLEAR THAT HE COULD NOT COMPLETE THE TAX AUDIT BECAUSE ASSESSEE DID NOT SUBMIT SOME PAPERS/DOCUMENTS TO HIM, (RELEVANT PORTION OF CA CERTIFICATE IS REPRODUCED BELOW: M/S B.W.M. INTERNATIONAL M.A NO.95/KOL/2018 PAGE | 5 DUE TO WANT OF SOME PAPERS/DOCUMENTS THE TAX AUDIT OF SAID FIRM WAS COMPLETED BY US AS ON 21.12.2005. THEREFORE, IT IS ABUNDANTLY CLEAR THAT THE ASSESSEE HAS FAILED TO SUBMIT THE RELEVANT PAPERS/DOCUMENTS TO THE CA TO GET THE ACCOUNTS AUDITED. THE ASSESSEE HAS FAILED TO EXPLAIN THE DELAY IN SUBMITTING THE BOOKS OF ACCOUNTS TO HIS CA. THE LD. COUNSEL FOR THE ASSESSEE HAS CITED A LOT OF JUDGMENTS OF HIGH COURTS/TRIBUNALS BUT THESE ARE NOT APPLICABLE TO THE FACT OF THE CASE AS DISCUSSED ABOVE. THEREFORE, CONSIDERING THE FACTUAL POSITION WE CONFIRM THE PENALTY U/S 271B OF THE ACT. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. HAVING GONE THROUGH THE ABOVE FACTUAL FINDINGS OF THE DIVISION BENCH, WE ARE OF THE VIEW THAT THERE IS NO ANY APPARENT MISTAKE ON RECORD, HENCE THE ORDER SHOULD NOT BE RECALLED. 3. WE NOTE THAT THE TRIBUNAL MAY RECTIFY ANY MISTAKE APPARENT FROM THE RECORD AS MENTIONED IN SECTION 254(2) OF THE ACT, WHICH READS AS FOLLOWS: 254(2) THE APPELLATE TRIBUNAL MAY, AT ANY TIME WITHIN 6 MONTHS FROM THE END OF THE MONTH IN WHICH THE ORDER WAS PASSED, WITH A VIEW TO RECTIFYING ANY MISTAKE APPARENT FROM THE RECORD, AMOUNT ANY ORDER PASSED BY IT UNDER SUB-SECTION 1, AND SHALL MAKE SUCH AMENDMENT, IF THE MISTAKE IS BROUGHT TO ITS NOTICE BY THE ASSESSEE OR THE ASSESSING OFFICER. THEREFORE, AS PER SECTION 254(2) ONLY THE MISTAKE APPARENT FROM THE RECORD MAY BE RECTIFIED. WE NOTE THAT A MISTAKE APPARENT FROM THE RECORD MUST BE OBVIOUS AND PATENT MISTAKE AND NOT SOMETHING WHICH CAN BE ESTABLISHED BY A LONG DRAWN PROCESS AND REASONING ON POINT ON WHICH THERE MAY BE CONCEIVABLE TWO OPINIONS. IF THERE ARE TWO VIEWS AND THE MISTAKE IS REQUIRED TO BE SUBSTANTIATED BY LENGTHY ARGUMENTS AND BY PLACING RELIANCE ON DECISIONS, IT WILL NOT BE AN ERROR OR MISTAKE THAT CAN BE SAID TO BE EITHER APPARENT ON THE FACE OF THE RECORD OR APPARENT FROM THE RECORD. THEREFORE, IN THE LIGHT OF THE PROVISION OF SECTION 254(2) OF THE ACT ONLY THE MISTAKE APPARENT FROM RECORD CAN BE RECTIFIED. M/S B.W.M. INTERNATIONAL M.A NO.95/KOL/2018 PAGE | 6 WE NOTE THAT TWO MISTAKES APPARENT FROM RECORD(VIDE PARA 2 (I) AND PARA 2(II) OF THIS ORDER) HAVE BEEN RECTIFIED BY US BECAUSE THESE MISTAKES ARE APPARENT FROM THE RECORD.AS, THERE IS NO ANY APPARENT MISTAKE IN THE REASONING OR CONCLUSION GIVEN BY THE TRIBUNAL IN ITS ORDER, AS NOTED ABOVE, HENCE, THE REQUEST OF THE LEARNED COUNSEL FOR THE ASSESSEE, TO RECALL THE ORDER IS HEREBY REJECTED. 4. IN THE RESULT, MISCELLANEOUS APPLICATION FILED BY THE ASSESSEE IS ALLOWED PARTLY AS PER THE DISCUSSION MADE (SUPRA). ORDER PRONOUNCED IN THE OPEN COURT ON THIS 29 /08/2018. SD/- (A. T. VARKEY) SD/- (DR. A.L.SAINI) / JUDICIAL MEMBER / ACCOUNTANT MEMBER /KOLKATA; DATED 29/08/2018 RS, SR.PS / COPY OF THE ORDER FORWARDED TO : //TRUE COPY// BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/D.D.O, I.T.A.T, KOLKATA BENCHES, KOLKATA . 1. / THE APPELLANT M/S. B.W.M. INTERNATIONAL 2. / THE RESPONDENT-ITO, WARD 44(4), KOLKATA. 3. ( ) / THE CIT(A), :KOLKATA. 4. / CIT 5. , , / DR, ITAT, KOLKATA 6. / GUARD FILE.