VADAKKEKARAYIL RAMAKRISHNAN NAIR SURENDRAN NAIR,THODUPUZHA V. INCOME TAX OFFICER, THODUPUZHA

ITA 13/COCH/2025

AI Insights

The case involves an appeal by Vadakkekarayil Ramakrishnan Nair Surendran Nair against the penalty imposed by the Income Tax Officer, Thodupuzha, for not submitting the audit report within the prescribed time. The penalty of Rs.1,50,000 was contested on the grounds that the report was submitted before the assessment was completed and that there was a reasonable cause for the delay due to the illness of the assessee's son. The Commissioner of Income-tax (Appeals) upheld the penalty, leading to the current appeal before the Income Tax Appellate Tribunal, Cochin Bench.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 396422 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2018-2019
• Other Referred Cases: Attinkara Electronics in ITA No.601/Coch/2018
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL
• Assessee Lawyers: SREEJITH R.
• Keywords: Reasonable cause; Period of limitation; Time period of passing order

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Inturi Rama Rao, Accountant Member & Shri Prakash Chand Yadav, Judicial Member ITA No.13/Coch/2025 : Asst.Year 2018-2019 Vadakkekarayil Ramakrishnan Nair Surendran Nair Geethanjali, Vadakkekarayil House, Vengalloor Post Thodupuzha – 685 608. PAN : AEGPV1647A. v. The Income Tax Officer Thodupuzha. (Appellant) (Respondent) Appellant by : Sri.Sreejith R., CA Respondent by : Smt.Leena Lal, Sr.AR Date of Hearing : 22.05.2025. Date of Pronouncement : 26.05.2025 O R D E R Per Prakash Chand Yadav, JM : The present appeal of the assessee is arising from the order of the National Faceless Appeal Centre / learned Commissioner of Income-tax (Appeals) [“CIT(A)” for short] dated 26.11.2024, having DIN & Order No.ITBA/NFAC/S/250/2024- 25/1070655447(1) and relates to the assessment year 2018- 2019. 2. The solitary issue involved in this appeal is levy of penalty u/s.271B of the Act. The department has levied the penalty of Rs.1,50,000 on the ground that the assessee failed to submit the audit report within the time prescribed by the CBDT. The ITA No.13/Coch/2025. Vadakkekarayil Ramakrishnan Nair Surendran Nair. 2 submissions of the learned Counsel for the assessee are (a) there was a reasonable cause for the delay in filing the audit report, (b) the audit report was filed before the completion of assessment on 1st July 2020 and hence no penalty is leviable, and (c) the penalty levied is barred by limitation, if the limitation period would be reckoned from the date of assessment order, i.e., 1st July 2020. The CIT(A) has affirmed the view of the AO discarding the submissions of the assessee. 3. Aggrieved with the order of the CIT(A), the assessee has come up in appeal before us and reiterated the submissions made before the authorities below. 4. The learned DR relied upon the orders of the authorities below. 5. After considering the rival submissions, we are of the view that this is a case where audit report has been submitted before the completion of assessment and hence in our view the penalty cannot be levied in such cases. The second aspect of the matter is that the assessee was not able to file the audit report as he was busy with the illness of his son, which constituted a reasonable cause and hence no penalty is leviable on this count also. It is pertinent to refer here to the decision of this bench on the same set of facts in the case of Attinkara Electronics in ITA No.601/Coch/2018 (order dated 01.03.2019) wherein it has been held that ill health of a partner was a reasonable cause within the meaning of ITA No.13/Coch/2025. Vadakkekarayil Ramakrishnan Nair Surendran Nair. 3 sec.273B of the Act. Therefore, we delete the penalty and allow the appeal of the assessee. 6. In the result, the appeal filed by the assessee is allowed. Order pronounced on this 26th day of May, 2025. Sd/- (Inturi Rama Rao) Sd/- (Prakash Chand Yadav) ACCOUNTANT MEMBER JUDICIAL MEMBER Cochin; Dated : 26th May, 2025. Devadas G* Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT, Cochin. 4. The DR, ITAT, Cochin. 5. Guard File. Asst.Registrar/ITAT, Cochin "