TMI Blog2016 (8) TMI 772X X X X Extracts X X X X X X X X Extracts X X X X ..... delay in submission of audit report where section 44AB is attracted, the AO has not given any adverse finding that it affected the proper computation of income in terms of provisions of the Act or any claim to any deduction by the assessee under any provisions of the Act. In such event, the breach remains a technical breach of the procedural requirement as the intent behind the introduction of section 44AB have been fulfilled which is basically to help support the AO to compute true income in the hands of the assessee. Thus we are of the view that penalty u/s 271B cannot be levied in the instant case hence this same is deleted - Decided in favour of assessee - ITA No. 785/JP/13 - - - Dated:- 19-7-2016 - SHRI KUL BHARAT, JM and SHRI VIKRAM SINGH YADAV, AM For The Assessee : Shri S.L. Poddar, Adv. For The Revenue : Shri R.A. Varma(Addl.CIT) ORDER PER SHRI VIKRAM SINGH YADAV, A.M. This appeal has been filed by the assessee against the order of Ld. CIT(A)-II, Jaipur dated 06.08.2013 wherein the assessee has taken following grounds of appeal: Under the facts and circumstances of the case the ld. CIT(A) has erred in confirming the penalty of ₹ 53 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the same is confirmed. 2.2 During the course of hearing, the ld. AR submitted that the return was filed on 30.03.2006 declaring total income at Rs. NIL as the assessee was under a bonafide belief that being an educational institute, its income was exempt under the various provisions of the Act such as 12A/11 and 10(23)(C) of the Act. The assessee was also under a bonafide belief that the imparting of education was not a business activity and the provisions of section 44AB were not applicable. However the assessee didn t the benefit of an expert advice and as such it failed to apply in time for getting the aforesaid exemption u/s 12AA/10(23)()C). However, the accounts of the assessee were audited as the assessee happened to be a society and a copy of the audit report was enclosed alongwith the return of income filed on 30.03.2006. 2.3 The ld AR further submitted that the crux of the matter is that in the opinion of the ld. AO, the assessee was carrying on business and as such should have filed audit report u/s 44AB in due time as the turnover exceeded the prescribed limit. Since the return was filed late by few months and it should have been filed by 31.10.2005 whereas th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r technical breach otherwise in substance the assessee was not required to file even return of income. Filing of audit report was only a technical requirement. The ld. CIT(A) has disregarded the submissions of the assesssee in a mechanical manner and has confirmed the levy of penalty. The ratio of these case laws is that bona fide belief is adequate ground and the same deserves to be considered favourably. Sunil Chandra Vohra vs. ACIT 127 TTJ (Mum) (U.O.) 100 R. Wadiwala Co. Vs. ACIT (2001) 72 TTJ (Ahd) 34 2.6 The ld AR further submitted that in view of the aforesaid facts it is submitted that the ld. AO at first erred in initiating penalty u/s 271B on a wrong ground that no audit report was submitted and secondly the ld. AO further erred in imposing penalty on the ground that no audit report was submitted as per provisions of section 44AB. The grounds on which penalty has been imposed are without any foundation in as much as the assessee had submitted audit report alongwith the return of income as discussed above. In view of this it is prayed that the penalty imposed may kindly be deleted. The facts that in subsequent year the assessee was granted registration u/s 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m No. 3CD) is also required to be furnished by 31.10.2005, the assessee has filed the return of income on 30.03.2006 alongwith Form No. 10B. Given that all the three conditions need to be satisfied cumulatively and the assessee has failed to furnish the audit report within the stipulated time frame, the penalty has rightly been initiated by the AO. 2.10 The only limited issue that remains is whether there is a reasonable cause for the delay on the part of the appellant to submit the audit report before the due date of filing the return of income. The ld. AR submitted that the assessee was under the bonafide belief that running of educational institutes and imparting of the education was not a business activity and the provisions of section 44AB were not applicable and even though it could not apply for the aforesaid exemption u/s 12A during the year under consideration, the subsequent registration u/s 12A granted by the Ld. Commissioner of Income Tax vide its order dated 5.08.2008 effective from 11.01.08 establishes that the activity of the assessee of imparting of education was held charitable in nature which was eligible for tax exemption. Further, the assessee has submitted t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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