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2016 (8) TMI 732 - ITAT DELHI

2016 (8) TMI 732 - ITAT DELHI - TMI - Penalty under section 271B - delay in filing of tax audit report - Held that:- In the present case, it appears that statutory audit of the assessee got completed on 27.11.2009 and on the same date tax audit report was signed. The assessee filed the return of income on 28.01.2010 and the delay in getting the tax audit report was due to the delay in completing the statutory audit. - The assessee was prevented by sufficient cause for non-compliance with the .....

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, Accountant Member For The Assessee : Sh. Shailesh Gupta, Adv. For The Revenue : Sh. A. Sreenivasa Rao, Sr. DR ORDER This is an appeal by the assessee against the order dated 29.08.2014 of ld. CIT(A)-VI, New Delhi. 2. Following grounds have been raised in this appeal: 1. That the learned Commissioner of Income Tax (Appeals) has grossly erred both in law and on facts in sustaining penalty under section 271B of the Act amounting to ₹ 1,00,000/-. 1.2 That in doing so, the learned Commissione .....

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case of the appellant company and further, placing her judgment on wholly extraneous and irrelevant considerations. 3. Facts of the case in brief are that the assessee is a 100% subsidiary of BSI Standards Institutions UK (BSI Group) and was engaged in assessment, reassessment of management systems training and ISO certification. The assessee filed its return of income on 28.01.2010 declaring gross total income of ₹ 1,02,89,523/- before set off of brought forward losses. The AO issued the .....

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he ld. CIT(A) who sustained the penalty levied by the AO by observing in paras 5.1 to 5.5 of the impugned order as under: 5.1. I have carefully considered the submission of the appellant vis-a-vis the penalty order passed in this case, as under challenge. Section 271B provides for imposition of penalty for assessee "If any person fails to get his accounts audited in respect of any previous year or years relevant to an assessment year [furnish a report of such audit as required under section .....

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case, the AO observed that appellant company has got its accounts audited u/s 44AB on 27.11.2009 whereas for the assessment year under consideration i.e. A.Y. 2009-10 the specified date, in IT. Act, 1961, by which the appellant company has to get its accounts audited was 30.09.2009. Accordingly, penalty u/s 271B of the I.T. Act, 1961 amounting to ₹ 1,00,000/- was levied by the AO. 5.3. Before initiating the penalty proceedings, the AO issued a show cause notice dated 30.03.2013 to the app .....

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This is to inform you that our management/finance people are travelling on official work and will be available in coming week only therefore we request you to kindly be adjourned the case to some other date after 15th April, 2013." 5.4. In this regard, it is ample clear that appellant was given an opportunity to file its reply. It is the appellant who could not avail the opportunity as given by the AO before initiating the penalty proceedings u/s 271B of I.T. Act, 1961 and did not bother t .....

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d in favour of the assessee vide order of the ITAT Mumbai Bench in the case of APL India Pvt. Ltd. Vs JCIT (OSD) reported at (2014) 41 Taxman 85 (copy of the said order was furnished which is placed on record). It was submitted that delay in getting the tax audit u/s 44AB of the Act was due to the reasons that the statutory audit got delayed and was not completed which was beyond the control of the assessee. The ld. Counsel for the assessee reiterated the reasons and circumstances as stated befo .....

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module for book keeping on financial year basis, it was still under stabilization. (iv) That the company outsourced the services of KPMG, for internal control from Sept 2008 to May 2009. (v) That Mr. Mukesh Arora, joined the company as Director Finance on 7.4.2009. (vi) That Mr. Singla, internal auditor and tax consultant of the company expired on 27.4.2009, and as a consequence, the briefs of the appellant company could not be procured for a long time to hand over the same to another internal a .....

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me. (viii) That during the intervening period the company did not have competent and trained accounts staff who could work on SAP system (Mr. Jagjit Dewan and Mr. Arun left the company as stated above) and since the finalization of accounts was getting late, the company again engaged the services of Mr. Arun, ex-assistant manager finance, who was trained and conversant with ERP (SAP) on contract basis w.e.f. 20.10.2009. (ix) That due to the aforesaid reasons, the statutory audit got completed on .....

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rated the observations made by the ld. CIT(A) in para 5.5 of the impugned order which we have already reproduced in the former part of this order. 7. I have considered the submissions of both the parties and carefully gone through the material available on the record. In the present case, it appears that statutory audit of the assessee got completed on 27.11.2009 and on the same date tax audit report was signed. The assessee filed the return of income on 28.01.2010 and the delay in getting the t .....

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shall be imposable on the person or the assessee, as the case may be for any failure which inter alia include the defaults mentioned in section 271B, if he proves that there was reasonable cause for the said failure. A plain reading of section 273B makes it clear that the same is a procedural law with regard to the question of imposition of penalty under different sections which include section 271B. Section 271B maintains imposition of penalty on the failure but, by reason of rule of evidence .....

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efault then penalty cannot be imposed. But the statute has used the expression 'may' employed in section 271B which cannot be treated to be mandatory. It has left a discretion that the taxing authority in given facts and circumstances may not impose penalty if they are satisfied that there was sufficient ground for not imposing penalty. But it depends on the facts of each case and having regard to the materials placed before it or where the finding is such that it can conceive of two alt .....

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