TMI Blog2016 (12) TMI 952X X X X Extracts X X X X X X X X Extracts X X X X ..... could not upload on account of site/ server problem of the system As decided in the case of ACIT & Anr vs. Dr. K. Satish Shetty (2009 (2) TMI 207 - KARNATAKA HIGH COURT ) this is first time when assessee was required to e-file the audit report and prior to that no such reports were being furnished. Hence, the penalty should not be levied. - Decided in favour of assessee - ITA No. 837/JP/2016 - - - Dated:- 14-12-2016 - SHRI BHAGCHAND, ACCOUNTANT MEMBER For The Assessee : Shri Mukesh Agarwal For The Revenue : Smt. Poonam Rai, DCIT-. DR ORDER PER BHAGCHAND, AM The assessee has filed an appeal against the order of the ld. CIT(A), Ajmer dated 13-07-2016 for the assessment year 2013-14 raising therein following ground:- That the lower authorities were not justified in law and on facts of the case in imposing penalty of ₹ 1,50,000/- u/s 271B of the Act on the low educated and innocent appellant for failure on part of the auditor or A.R. in uploading the audit report as introduced and required first time. 2.1 Brief facts of the case are that the return of income was filed by the assessee electronically on 21-06-2013 declaring total income of & ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vant audit report in this e-filing portal even though they may not be liable for audit u/s 44AB as per the returns of Income for assessment year 2013-14. The information may kindly be disseminated to concern Assessing Officer of your charge for examination and action u/s 271B of the Act, if deemed fit. The AO thus observed that the name of the assessee was contained in the said CD and the assessee had not uploaded the audit report u/s 44AB of the I.T. Act in form 3CB and 3CD electronically on e-filing portal which was to be uploaded on or before 31-10-2013 as per CBDT Notification No 34 dated 01-05-2013 for which the assessee was show caused by the AO vide his letter dated 19-09-2014 and the same was served upon the assessee through Speed Post AD. The ld. AR of the assessee filed the detailed reply on 23-09-2014 which was not found convincing by the AO. However, in the interest of natural justice, one more opportunity was given to the assessee by the AO vide notice dated 13-02-2015 with direction to appear personally or through his authorized representative or to furnish a written reply on 19-02-2015. In response to said notice, the assessee furnished reply on 19-02-2015 which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ort then why the appellant could not upload the audit report. In view of the facts discussed above, I am of the opinion that there was reasonable cause for not furnishing the audit report u/s 44AB in respect of A.Y. 2013-14. Hence, the penalty of ₹ 1,50,000/- levied by the AO u/s 271B is hereby confirmed. 5.0. In the result, the appeal is dismissed. 2.3 During the course of hearing, the ld. AR of the assessee prayed that the lower authorities have erred in imposing the penalty of ₹ 1.50 lacs u/s 271B of the Act for which the assessee of the assessee filed the following written submission. 1. That the appellant is regular income tax assessee since long who has been getting her accounts audited by Chartered Accountants since when she was liable for the same u/s. 44AB. However she was not required to file the audit report to the ld. AO as there was no system of e-filing the same. 2. That in that order the appellant got her accounts audited by Chartered Accountants u/s. 44AB for the year under appeal on 12/6/2013 and e-filed her return of income digitally signed by her on 21/6/2013 as required by law for e-filing of audited return. (Page 1) 3. That ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctronically was further confounded and aggravated, as on 30.09.2013, the server/site of the Income Tax Department crashed with the result that the returns and reports which were required to be filed electronically could not be filed. The site of the Department was not working which is evident from the fact that despite several attempts at regular intervals the returns could not be uploaded. 10. A writ petition was also been filed in this regard before the Delhi high court. Consequently in exercise of power u/s. 119(2)(a) r.w.s. 139 and Rule 12, CBDT vide order dated 26.09.2013 extended the due date for obtaining and furnishing of Tax Audit Report under section 44AB of the Act for Assessment Year 2013-14 from 30th September, 2013 to 31st October, 2013 subject to certain conditions. 11. In the instant case, Audit report was obtained on 16.09.2013 and was attempted to be furnished along with ITR on 21.6.2013 however the same was not uploaded due to technical reason beyond the control of the assessee. The copy ITR Form, Acknowledgement, and Tax audit Report dated 12.06.2013 were furnished to the ld. AO. Assessee during this phased was under a bona fide belief that the report is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2000) 246 ITR 489 (P H) and CIT vs. Ashoka Dairy (IT Ref. No. 61 of 1995) followed 16. In view of following judgements and decisions of Hon ble High Courts and Tribunals penalty should not be levied for mistake committed by other person like A/R or chartered Accountant- ACIT ANR. vs. DR. K. SATISH SHETTY (2009) 310 ITR 366 (Kar) : ITO vs. GULABDASS STORES (2000) 69 TTJ (Jd) 472 17. As explained in CBDT's circular No 3 of 2009 7. Following clarifications are also issued in respect of certain issues arising from furnishing the returns in the above mentioned forms: (i) An assessee should obtain the report of audit from an accountant under section 44AB of the Act on or before the due date of the furnishing of the return and should fill out the relevant columns of the return forms on the basis of such report. However, the report of audit should not be attached with the return or furnished separately any time before or after the due date. The assessee should retain the report with himself. If called for by any income-tax authority during any proceeding under the Act, it shall be incumbent upon the assessee to furnish/produce the same in original. No pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t stage has arisen-It cannot be said that in all cases where ultimately the assessee s objection as to its obligation to get its accounts audited under s. 44AB or for non-compliance of any provision is overruled, the reason for non-compliance is to be considered to be not bona fide-Fact that the Court while considering the admission of this appeal has found that interpretation of s. 44AB is a substantial question of law prima facie suggests that the interpretation of s. 44AB was not self-evident and it needed an examination of provisions-Further, failure to comply with such procedural provisions under a bona fide belief that the assessee is not required to act in a particular manner under the statute amounts to a venial and technical breach for which penalty is not leviable IMRAN-UR-REHMAN KIDWAI vs. ITO (1997) 58 TTJ (Del) 537 : 62 ITD 33 Penalty under s. 271B-Reasonable cause-Copies of balance sheet and trading and P L a/c contain the seal and signature of auditors with clear remark as per our report of even date - Said audited statements bear the date of 10th April, 1990, as well as the seal of the Chartered Accountant-Copy of auditors' report also shows that aud ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... information-Same is optional for assessees who not liable for audit under section 44AB-Information to be given in Part A-O1 contains details to be furnished in Form No.3CD-Assessee duly furnished all details under Part A-O1 of return of income-Audit under Companies Act and under Section 44AB was conducted by very same auditor and he confirmed fact by filing an affidavit-Assessee could have obtained audit report under Section 44AB before filing return of income and had inadvertently filled relevant column wrongly as NO -Assessee could have obtained tax audit report before due date for filing return of income-No justification for levying penalty u/s 271B- Order of CIT(A) set aside-AO directed to delete penalty levied in hands of assessee under Section 271B- Appeal dismissed. THEREFORE we pray your honour that the ld. lower authorities were not justified in law and on facts of the case in imposing penalty on the low educated and innocent female appellant for failure on part of the auditor or AR in uploading the audit report as introduced and required first time. 2.4 The ld. DR relied on the orders of the authorities below. 2.5 I have heard the rival contentions a ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
