TMI Blog2011 (1) TMI 1052X X X X Extracts X X X X X X X X Extracts X X X X ..... may be interpreted as discretionary and that discretion is limited within the meaning of such provisions providing the procedure thereof - assessee's accounts are duly audited under section 44AB of the Act and there is no such default as occurred in respect of international business - Held that: delay in submission of the report under section 92E of the Act within the prescribed time by the assessee was due to a reasonable cause and, therefore, penalty is not sustainable on this ground - Decided in favor of the assessee - ITA NO. 315 (KOL.) OF 2010 - - - Dated:- 7-1-2011 - SHRI B.R. MITTAL, AND SHRI C.D RAO, JJ. Represented By: Shri R. Salarpuria for the Appellant. Shri Piyush Kolhe for the Respondent. C.D. Rao, Accounta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed a statutory report in Form 3CEB as required under s. 92E of the Act on or before the specified date. He, therefore, issued a show-cause notice and in response the assessee explained that as it was not fully aware of the provisions of s. 92E of the Act, an unintended and bona fide technical mistake had occurred in not getting the accounts relating to international transactions audited under s. 92E of the Act and submit the audit report on or before the due date of filing the return, which was duly filed in prescribed form during assessment proceedings on 13th Dec., 2007. The AO was not impressed upon by the explanation of the assessee as, according to him, lapse on the part of the assessee was not in the nature of technical default. He, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oking after the day-to-day affairs of the appellant was not keeping good health and ultimately left the organization. This kind of explanation not substantiated with any kind of evidence backing the explanation cannot be considered as genuine and reasonable cause. The case law relied on by the appellant is mostly on the ratio of 'reasonable cause' As mentioned in the present case I do not see any reasonable cause that made the appellant to obtain the statutory report very belatedly. As such the levy of penalty under section 271BA is justified in this case and accordingly the action of the AO is upheld." Hence this appeal by the assessee. 4. At the time of hearing before us, the learned counsel for the assessee submitted that the year un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t report under section 44AB of the Act. Therefore, there had been no intention to suppress anything before the Department. He, therefore, submitted that there being reasonable cause for such alleged delay, the penalty so imposed by the AO under section 271BA of the Act and confirmed by the learned CIT(A) should be cancelled. 5. The learned Departmental Representative, on the other hand, relied on the orders of the authorities below and submitted that the learned CIT (A) after discussing several case law and also interpreting section 92E r/w section 271BA of the Act has rightly upheld the penalty imposed by the AO and the same should be upheld. He also relied on the decision in the case of CIT v. Sunil Kumar Goel [2005] 274 ITR 53 (P H). ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the various Courts that the word "may" employed in penal provisions of the Act may be interpreted as discretionary and that discretion is limited within the meaning of such provisions providing the procedure thereof. The provisions give discretion to the taxing authority not to impose penalty having regard to the facts and circumstances of the case. The AO has been conferred upon with the inherent discretion in the matter of imposing penalty. In our considered opinion, tax authority is to see what information and documents are relevant for determining the ALP before issuing notice under section 92E of the Act. In this connection, we may refer to section 92D which speaks of maintenance and keeping of information and document by persons e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lt as occurred in respect of international business. Considering the totality of the facts and circumstances of the case and submissions of the parties, we are of the opinion that the delay in submission of the report under section 92E of the Act within the prescribed time by the assessee was due to a reasonable cause and, therefore, penalty is not sustainable on this ground. Moreover, the penalty has been imposed on mere technical ground. In view of settled law, no penalty is imposable for technical or venial default. 6.1 At the time of hearing, the learned Departmental Representative filed a copy of judgment in the case of Sunil Kumar Goel (supra), wherein it has been held that the Tribunal is duty-bound to record tangible and cogent re ..... X X X X Extracts X X X X X X X X Extracts X X X X
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