MADAPATTU MUHAMMED,PALAKKAD V. ITO, WARD 1 & TPS, PALAKKAD

ITA 263/COCH/2024

AI Insights

The case involves Madapattu Muhammed, an individual engaged in the business of dealing in hardware, paints, and glass, who appealed against the penalty imposed by the Income Tax Officer, Ward 1, Palakkad, under section 271B of the Income Tax Act, 1961, for the Assessment Year 2018-19. The penalty was initially levied due to the late and defective submission of the tax audit report. The National Faceless Appeal Centre (CIT(A)) upheld the penalty, leading to the current appeal before the Income Tax Appellate Tribunal. The Tribunal, after considering the submissions and the circumstances of the case, decided in favor of the assessee, highlighting that the department suffered no prejudice from the late submission and that the assessee was not responsible for the auditor's errors.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 471716 (ITAT-COCHIN)
• Duration Of Justice: 7 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-11-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2018-2019
• Appeal Filed On: 01-04-2024
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL
• Keywords: Application of stay
• Section: 44AB; 271B

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM AND SHRI PRAKASH CHAND YADAV, JM ITA No. 263/Coch/2024 &SA No. 39/Coch/2024 Assessment Year: 2018-19 Madapattu Muhammed Madappat Pattikkaravalappil Mezhathur, Thrithala Palakkad 679534 [PAN: APGPM8094P] .......... Appellant Vs. The Income Tax Officer Ward -1 & TPS, Palakkad .......... Respondent Appellant by: ------- None ------- Respondent by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 20.11.2024 Date of Pronouncement: 29.11.2024 O R D E R Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 31.01.2024 for Assessment Year (AY) 2018-19. 2 ITA No. 263/Coch/2024 & SA No. 39/Coch/2024 Madapattu Muhammed 2. Brief facts of the case are that the assessee is an individual engaged in the business of dealing in hardware, paints and glass. The return of income for AY 2018-19 was filed on 05.01.2019 disclosing income of Rs. 4,28,250/-. Against the said return of income assessment was completed by the Income Tax Officer, Ward 1, Palakkad (hereinafter “the AO”) and it was found during the course of assessment proceedings that the turnover for the relevant assessment year was Rs. 2,81,73,410/- and, therefore, the provisions of section 44AB of the Income Tax Act, 1961 (the Act) are applicable. The AO found that the prescribed audit report in Form 3CD was not filed within the stipulated period provided in the Act but was filed on 01.01.2019. The AO also found certain discrepancies in the audit report filed and accordingly the audit report was treated as defective and incomplete, initiated penalty proceedings u/s. 271B of the Act vide show cause notice dated 31.03.2021. In response to the show cause notice no explanation was filed by the assessee and accordingly a penalty of Rs. 1,50,000/- was levied vide order dated 29.12.2021 passed u/s. 271B of the Act. 3. Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO. 4. Being aggrieved, the assessee in appeal before us in the present appeal. 5. When the appeal was called none appeared on behalf of the assessee nor there any application for adjournment. Therefore, we proceed to dispose the appeal after hearing the ld. Sr. DR. 6. After hearing the learned Sr. DR and pursuing the written submission filed by the assessee, we are of the considered opinion that it is not a fit case for 3 ITA No. 263/Coch/2024 & SA No. 39/Coch/2024 Madapattu Muhammed levy of penalty, inasmuch as, no prejudice is caused to the department on account of belated submission of the tax audit report, as returned income was accepted by department. Further, we note that the assessee cannot be held liable for the mistakes and lapses committed by the tax auditor. Therefore, we direct the AO to delete the penalty of Rs. 1,50,000/- levied u/s. 271B of the Act. 7. Since the quantum appeal of the assessee is disposed of, the stay application becomes infructuous, hence dismissed. 8. In the result, the appeal filed by the assessee is allowed and the stay application is dismissed. Order pronounced in the open court on 29th November, 2024 Sd/- Sd/- (PRAKASH CHAND YADAV) JUDICIAL MEMBER (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 29th November, 2024 n.p. Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File Assistant Registrar ITAT, Cochin "