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2016 (5) TMI 214 - ITAT CHENNAI

2016 (5) TMI 214 - ITAT CHENNAI - TMI - Penalty u/s.271BA - failure of furnish a report from Accountant as required by Sec.92E at ₹ 1 lakh for each assessment years - Held that:- In the present case, there is no affidavit from the Director or by Chartered Accountant to show that report in Form No.3CEB was obtained before the due date of filing of the return or the said Audit report was made available to the AO either before processing the return u/s.143(1) or completion of assessment order .....

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Shri Chandra Poojari , Accountant Member For the Appellant : Mr.N.S.Raghunathan Advocate For the Respondent : Mr.P.Radhakrishnan,JCIT, D.R ORDER Per Chandra Poojari, Accountant Member All these four appeals by the assessee are directed against the common order of the CIT(A)-8, Chennai, dated 02.11.2015 for assessment years 2007-08 to 2010-11. Since common issues arise in all these appeals, these were heard together and are being disposed of by this common order for the sake of convenience. 2. Th .....

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the case of the assessee for belated filing of Form No.3CEB for all these assessment years. In response, the assessee submitted to the AO that the Form No.3CEB was obtained within the prescribed due date but did not furnish the same to the ITO under a bona fide belief that the electronic filing of the relevant information in the tax teturn is sufficient. The AO rejected the assessee s explanation as not acceptable and passed orders u/s.271BA levying penalty of 1,00,000/- each for all these asse .....

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ty u/s.271BA of the Act. Against this, the assessee is in appeal before us. 4. The ld.A.R submitted that levy of penalty u/s.271BA is not an automatic and it should be governed by the provisions of the section 273 of the Act. Accordingly, ld.A.R submitted that Form No.3CEB was obtained within the prescribed due date, but did not furnish the same to the Income Tax Department under a bona fide belief that the electronic filing of relevant information in the tax return is sufficient. He further sub .....

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of the TPO in the present case passed u/s 92 of the Act dated 20.09.2009 clearly shows that no adjustments have been made. A perusal of the show cause notices levied u/s 271AA and 271G shows that there is no specific indication as to the documents which were not furnished. In fact, the order of the TPO shows that the details were called for and the assessee had submitted the details. Further perusal of the order of the TPO shows that the assessee had been asked to provide the details in 30 days .....

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d and familiar to the functions originally done by the earlier employee would take time. This would be a reasonable cause. It is noticed that the Id. CIT(A) has also accepted this as reasonable cause. The claim of the assessee has also not been found to be false. In these circumstances, we are of the view that the Id. CIT(A) was right in deleting both the penalties u/s 271AA and 271G of the Act. Our view is also supported by the decision of the co-ordinate Bench of the Tribunal in the case of SS .....

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ng a previous year shall obtain a report from an accountant and furnish such report on or before the specified date in the prescribed form duly signed and verified in the prescribed manner by such accountant and setting forth such particulars as may be prescribed. 271BA If any person fails to furnish a report from an accountant as required by section 92E, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of one hundred thousand rupees. 7. From the above it is .....

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ind that assessee has claimed that the said audit report was obtained much earlier than the due date for filing the return. The same could not be filed along with the return as the return was filed electronically and the assessee was under the belief that any annexures etc. were not to be filed along with the return. Affidavit from Director and Chartered Accountant is also on record that the report in Form No. 3CEB was obtained on 1.9.2006 i.e. before the due date for filing the return. The asse .....

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ts of the present case in as much as in this case we have found that there was reasonable cause for the failure of the assessee to comply with the provision of the Act. 9. In this regard we place reliance from the Apex Court decision rendered by a larger Bench comprising of three of their Lordships in the case of Hindustan Steel vs. State of Orissa in 83 ITR 26 wherein it was held that: An order imposing penalty for failure to carry out a statutory obligation is the result of a quasi-criminal pr .....

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ces. Even if a minimum penalty is prescribed, the authority competent to impose the penalty will be justified in refusing to impose penalty, when there is a technical or venial breach of the provisions of the Act, or where the breach flows from a bonafide belief that the offender is not liable to act in the manner prescribed by the statute. 10. In the background of the aforesaid discussion and precedent, we set aside the orders of the authorities below and delete the levy of penalty of ₹ 1 .....

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09.2009 26.06.2012 2010-11 30.09.2010 26.06.2012 As per Sec.271BA reads as follows: 271BA If any person fails to furnish a report from an accountant as required by section 92E, the Assessing Officer may direct that such person shall pay, by way of penalty, a sum of one hundred thousand rupees. As per Cec.92E reads as follows:- 92E. Every person who has entered into an international transaction during a previous year shall obtain a report from an accountant and furnish such report on or before th .....

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belief that electronic filing of the relevant information in the tax return is sufficient compliance of section 92E of the Act. As such, the assessee had not filed the Form No.3CEB, though it was obtained within the specified date. However, the assessee is not able to substantiate before us what is the reason for such kind of belief to come to the conclusion that electronic filing of the relevant information in the tax return is sufficient compliance of section 92E of the Act. When the assessee .....

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tion 92E. The reason given by the assessee herein is too general in nature and the failure to furnish the audit report as per the provisions of section 92E is totally attributable to the gross negligence of the assessee and there is no good and sufficient reason in not filing the audit report within the stipulated time. The assessee herein could not show any reasonable cause in not filing of the audit report in time. 6.3 The reason explained by the assessee herein above could not be considered a .....

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