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2016 (8) TMI 595 - ITAT PUNE

2016 (8) TMI 595 - ITAT PUNE - TMI - Penalty u/s.271B - Failure to get accounts audited - Held that:- In the instant case, no doubt the assessee has not furnished the audit report during the course of assessment proceedings but such failure has been explained by the Ld. Counsel for the assessee as due to non-appearance by the Authorised Representative of the assessee due to the marriage of his son and the illness of his younger brother. Considering the totality of the facts of the case and consi .....

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ground that assessee could not file documentary evidence to prove the reasonable cause for non-compliances of notices - Held that:- Submission of the Ld. Counsel for the assessee that the advocate was busy in marriage function of his son till 30-11-2011 and thereafter from 05-12-2011 onwards he was busy with the treatment of his younger brother who was detected with brain cancer and subsequently he died in our opinion is a reasonable cause for non compliance to the statutory notices. No doubt th .....

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the operation, we are of the opinion that there was a reasonable cause on the part of the assessee for non compliance to such statutory notices. We accordingly set aside the order of the CIT(A) and direct the AO to cancel the penalty of ₹ 10,000/- levied u/s.271(1)(b) of the I.T. Act. - Decided in favour of assessee - ITA Nos.2167 & 2168/PN/2014 - Dated:- 17-6-2016 - SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM For The Assessee : Shri Harshit S. Kabra For The Revenue : Shri Hitendra Nin .....

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Act. 3. Facts of the case, in brief, are that the assessee is an individual and is engaged in the business of trading of Iron, Steel, MS Scrap etc. He filed his return of income on 02-09-2009 declaring total income of ₹ 4,88,380/-. The AO noted that the assessee has not filed the tax audit report even upto the date of assessment, i.e. 15-12-2011 and has not attended before him for which he had to complete the assessment exparte. The AO asked the assessee to explain as to why penalty u/s.27 .....

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71B of the I.T. Act. 4. However, the AO did not accept the above contention of the assessee. He observed that the assessee has never filed the particulars of the tax audit report as prescribed. From the verification of the uploaded return, he noted that in his answer to Question - Are you liable for audit u/s.44AB? the assessee has categorically marked in the box provided as (X), i.e. NO. The assessee has not given the name of the auditor signing the tax audit report, his Membership Number, name .....

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Act. 5. Before CIT(A) the assessee more or less reiterated the same submissions. However, the CIT(A) was also not satisfied with the explanation given by the assessee and upheld the penalty levied u/s.271B of the I.T. Act by observing as under : 9. I have carefully considered facts of the case and rival contentions. On perusal of the same, it has been noticed that the appellant has asked the appellant to file tax audit report on various occasions, however, the AO has not filed the same wither af .....

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of furnishing the return and should fill out the relevant columns of the return forms on the basis of such report, however, the same should not be attached with the return. From the facts of the case of the appellant, pointed out by the AO in the penalty order, it is undisputed fact that the assessee has not filled the relevant columns of return of income requiring information about the Tax Auditor and tax audit. It has also been noticed that the AO. has asked the appellant to file the tax audi .....

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of return u/s 139(1) is done away with. In this regard, a Circular No.3 of 2009 dated 21/05/2009 has been issued as a measure of precaution providing that the particulars about Tax Auditor and Tax Audit are to be furnished in the return of income to be filed by the assessees. The appellant has failed to furnish the said information in the return of income. Therefore, I am of the considered view that the AO. is justified in levying penalty of ₹ 1,00,000/- u/s 271B of the Act. I am also of .....

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the assessee submitted that the assessee has got the audit report on 28-05-2009 and paid the self assessment tax on 26-08-2009 and uploaded the return on 02-09-2009. All these things clearly show that the contention of the assessee that it has obtained the audit report before the specified date is bonafide. It is not the case of the assessee that the tax was paid on the last day of the month and the return was filed thereafter for which a doubt can be raised in the mind of anybody that the asse .....

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efore the AO during the course of penalty proceedings. He again reiterated that the assessee has obtained the audit report before the specified date and therefore no penalty u/s.271B is called for. 8. The Ld. Departmental Representative on the other hand heavily relied on the order of the CIT(A). He submitted that the CIT(A) has given justifiable reasons while upholding the penalty of ₹ 1 lakh levied by the AO u/s.271B of the I.T. Act. 9. We have considered the rival arguments made by both .....

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o one-half per cent of the total sales, turnover or gross receipts, as the case may be, in business, or of the gross receipts in profession, in such previous year or years or a sum of [one hundred fifty thousand rupees], whichever is less.] 10. From the above, it can be clear that the levy of penalty for failure to get the accounts audited or furnishing of report of such audit report as per the provisions of section 44AB is discretionary. The Assessee in the instant case has filed the audit repo .....

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e the specified date which in the instant case is 30-09-2009. In our opinion, had the accounts not been audited, the assessee could not have determined the self assessment tax and paid the same on 26-08-2009 and could not have uploaded the return on 02-09-2009 especially when there is no finding by the AO that the figures of the audited accounts do not tally with the figures of the uploaded balance sheet and profit and loss account. There may be certain errors in not filling up certain columns i .....

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the said failure. In the instant case, no doubt the assessee has not furnished the audit report during the course of assessment proceedings but such failure has been explained by the Ld. Counsel for the assessee as due to non-appearance by the Authorised Representative of the assessee due to the marriage of his son and the illness of his younger brother. Considering the totality of the facts of the case and considering the fact that assessee has filed the audit report before the AO during the co .....

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ged the order of the CIT(A) in confirming the penalty of ₹ 10,000/- levied u/s.271(1)(b) of the I.T. Act. 13. As stated earlier, the assessee is an individual and filed his return of income on 02-09-2009 declaring total income of ₹ 4,88,380/-. The case of the assessee was selected for scrutiny and the AO issued notice u/s.143(2) dated 26-08-2010 requiring the compliance on 15-09-2010. Since there was no compliance by the assessee the AO issued notice u/s.142(1) dated 03-05- 2011 fixi .....

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T. Act for failure of the assessee to comply with notices issued without reasonable cause u/s.273B of the I.T. Act. 14. Before CIT(A) it was submitted that although there was no compliance on 15-09-2010, however, the assessee attended the office of the AO on 18-05-2011 at 10.30 am but the AO did not reach the office from Aurangabad. Similarly, on 05-12-2011 the advocate to whom the notice was sent was busy in marriage function of his son till 30-11-2011 and on 05-12-2011 his younger brother was .....

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refore, he held that the assessee has not proved the reasonable cause for non compliance of notice as envisaged by provisions of section 273B of the I.T. Act. He accordingly confirmed the penalty levied u/s.271(1)(b) of the I.T. Act. 16. Aggrieved with such order of the CIT(A) the assessee is in appeal before us. 17. We have considered the rival arguments made by both the sides and perused the material on record. It is an admitted fact that the assessee did not comply to the statutory notices fo .....

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